The involvement of the private sector in the agriculture business has yielded billion of naira to the economy, increased the nation’s GDP as well as stemming rural-urban migration
| By Anayo Ezugwu | Mar. 23, 2015 @ 01:00 GMT |
NIGERIA is increasingly reaping the gains of transforming the agriculture sector from a development to a business oriented programme involving the private sector. Since 2011, when the agriculture transformation agenda started, the sector has added more than N777 billion in incomes to the economy. The total agricultural GDP in just three years (2011-2013) was N46.6 trillion, surpassing the total cumulative GDP for the eight-year period of 2000-2008 of N42 trillion.
More than 3.5 million farm jobs have been created across the agricultural value chain, spurring a revival of rural economies, especially for millions of youths and reducing rural-to-urban migration. Also, it has renewed hope for millions all across Nigeria’s rural areas.
Akinwumi Adesina, minister of agriculture and rural development, said recently during the inauguration of the African Development Bank-assisted Agricultural Transformation Agenda Support Programme Phase I, held at the International Institute for Tropical Agriculture in Abuja, that “The agricultural GDP of Nigeria rose from N14 trillion in 2011 to N15.8 trillion in 2012 and N16.8 trillion in 2013. Adesina said the driving force for the success being witnessed was the focus on the private sector. “
“We moved away from agriculture as a development programme to agriculture as a business. Private sector investments in the agriculture sector expanded by $5.6 billion within the last three years, with 80 per cent of the new investments from domestic investors who are rapidly shifting away from oil and gas industries to the agriculture sector,” he said.
The shift in focus in agriculture has enhanced food security in the country. Figures from the National Bureau of Statistics, NBS, indicated that food import to Nigeria had declined from N3.3 trillion in 2011 to N634 billion in 2014. Despite the depreciation of the naira and steep decline in the price of crude oil, food prices had been largely stable. “We have revolutionised private financial markets for agriculture. Banks are lending to the agriculture sector more than ever before. Total bank lending to the agriculture sector as a share of total lending expanded from 0.7 percent in 2011 to five percent by 2014, and we expect this to reach close to 10 percent by next year. We developed a risk sharing facility with the Central Bank of Nigeria, which has expanded lending for seed and fertiliser companies from N13bn in 2011 to N40bn by 2014,” Adesina said.
According to him, it is critical for Africa to unlock all its capacities to produce sufficient food to feed itself as well as feed the world. According to him, the agriculture potential of Africa is immense, with 65 percent of arable land to feed the nine billion people in the world by 2050. “Yet, Africa spends $35 billion per year importing food. As this happens, Africa exports jobs, spends scarce foreign exchange importing what it can produce, leaving a vastly expanding trail of poor people in its rural areas. Poverty must not become a natural comparative advantage of Africa. We must unlock Africa’s agricultural potential and build a more climate resilient agricultural system. To achieve this, we must turn Africa’s absolute advantage into competitive advantage by adding value to all farm produce. Africa must feed the world,” he said.
The effort of the government in the agriculture sector is being complimented by Nigeria’s development partners who have committed about $2 billion into Nigeria’s agricultural transformation agenda. Global financial institutions have endorsed the establishment of staple crop processing zones in the country, which, according to Adesina would attract private sector investment in the industry. The development partners include the World Bank which contributed $1 billion, the African Development Bank, AfDB, $500 million, USAID, $100 million, the International Fund for Agricultural Development, IFAD, $100 million. There are other undisclosed funds DfID, United Nations Development programme, UNDP, and the Bill and Melinda Gates Foundation.