The 19th edition of the Nigerian Economic Summit Group ends in Abuja after drawing national attention to the potentials in the country’s agricultural sector
| By Vincent Nzemeke | Sep. 23, 2013 @ 01:00 GMT
THE 19th edition of the Nigerian Economic Summit organised by the Nigerian Economic Summit Group and the National Planning Commission has and gone, but its lessons and impact on the Nigerian economy will echo for a long time. The summit which held at the Transcorp Hilton Hotels in Abuja from the September 3 to 5, lived up to its billing as the single largest policy platform for dialogue between the public and private sectors. It attracted participants from government, the private sector, foreign investors and top players from virtually every sector of the Nigerian economy.
Under the theme: “Growing Agriculture as a Business to Diversify Nigeria’s Economy’, the three-day summit practically unlocked the potentials of Nigeria’s agricultural sector which has been relegated to a less important role since the discovery of crude oil in 1956. The summit focused on how to make Nigeria less dependent on oil and, as well, build the economy through agriculture. There were various plenary sessions where stakeholders x-rayed the untapped potentials of the agricultural sector and how to revolutionise it for maximum results.
Olusegun Aganga, minister of trade and investment, said that in order to achieve a breakthrough in the current effort to revolutionise agriculture in Nigeria, issues like investment, specific issues of long term finance, risk capital, and proven capacity must be properly addressed. Other critical success factors highlighted by Aganga included agro production, and this, according to him, has to do with other issues such as land, crop and livestock production. Also discussed was the issue of industrialisation, which threw up other issues like technology, midstream and downstream processing capacity, storage and logistics infrastructure as well as marketing.
Aganga drove home his point with figures which showed the realities in the Nigerian agricultural sector. He said there is a strong potential for agro value-chain in Nigeria, as, according to him, out of the 923 million square kilometers of land in Nigeria, over 90 percent is arable, 40 percent is not cultivated at all, and only 10 percent is properly cultivated. He noted that value-added activities are low in the country. The minister declared that Nigeria’s Agricultural Transformation Agenda, ATA, is primed to increase the nation’s agricultural output, and targets the production of, at least, 20 million metric tonnes of food by 2015.
Also speaking at the summit, President Goodluck Jonathan said the event was taking place at the most appropriate time when the country is determined to unlock its greatest potentials in agriculture to ensure food security, job creation and wealth generation. Jonathan explained that the government, through the federal ministry of finance, was working closely with the private sector on how farmers could access loans at low interest rates.
“We are only using agriculture as a fulcrum to discuss other issues of national development. All of them are interwoven and must work together for good result. You cannot talk of agriculture without land, education, finance, market which is trade and others.”
Jonathan also explained that a new a process was being initiated by the federal ministry of agriculture whereby farmers’ biometrics are captured for enhanced identification. He assured that when completed, the biometric identification would boost lending to farmers.
The president noted that power plays a critical role in transforming agriculture and the economy at large. For this reason, Jonathan said the ongoing reforms in the power sector would replicate the success story in the telecommunication sector.
During a plenary session which featured Donald Kaberuka, president of the African Development Bank, AfDB, Jacques Diof, former director general of Food and Agriculture Organisation and Komla Dumor of the British Broadcasting Corporation, BBC, Jonathan said his administration was committed to building institutions rather than individuals to allow for sustainability of policies. He said agriculture remained critical to the country’s industrialisation, food security and job creation, stressing that the country’s population was too large to depend on imported food.
On his part, Akinwunmi Adesina, minister of agriculture, noted that even though the sector has maintained a steady growth in the last two years, there was still a lot more to be done to revolutionise it. Akinwunmi, who hinged the sector’s growth on the transformational policies put in place by the Jonathan administration, said banks and other financial institutions in the country were now interested in agriculture. He also disclosed that the total bank lending to the nation’s agricultural sector rose from N3.5 billion in 2012 to N25 billion in 2013.
Adesina also said that in the last 18 months, the Nigerian agricultural sector had attracted private investors who have invested more than $4 billion in the sector. He added the impact of agricultural transformation agenda had been significant. He said nine million metric tonnes of food was added in 2012/ 2013 to the nation’s domestic food supply, which is 80 percent higher than the annual target of five million metric tonnes that had been set.
Similarly, agric exports also expanded by 822,000 metric tonnes in 2012, as the sector’s contribution to non-oil exports expanded by N759 billion. Adesina said the transformation agenda had witnessed great success with the registration of 10 million farmers this year alone, which gives government a fair knowledge of the number of genuine farmers in the country.
At a plenary session which focused on agriculture financing, Philips Oduoza, group managing director/chief executive officer of United Bank for Africa, UBA, said the agricultural sector is profitable and that his organisation was seeking for ways to increase its total lending portfolio to agriculture to about 15 percent from the current seven percent.
But Bisi Onasanya, group managing director/chief executive of First Bank, who was also one of the panellists at the plenary session, said investing in agriculture was not as sweet as envisaged by many. He added that banks would need to be given incentives in terms of risking sharing because the business comes with lots of risk. “There is an urgent need to clearly identify the parties that would be most ideal in managing the risks in the credit cycle, especially as it pertains to value chain financing.”
Speakers at the economic summit also deliberated on how to guarantee food security in the country. Frank Nweke, director general of the Nigerian Economic Summit Group, said the group’s choice of agriculture as the theme for the summit was in pursuit of the food security of the country, adding that going by estimates, the country spends about $5-$10 billion on importation of food annually.
Nweke said Nigeria’s agricultural sector was undergoing massive restructuring and transformation. “The goal is to turn Nigeria into a global agricultural power house.” He added that it had become expedient for the federal government to include a representative of the body on the country’s economic management team considering the group’s involvement in economic policy formulation in the past 19 years, as well as its ability to sustain partnerships in fostering dialogue on the country’s economic development.
Shamsudeen Usman, former national planning minister, said at the summit that Nigerians must see the many gains of investing in agriculture. He said government and individuals must tap into the benefits of agriculture through investments. Usman also called on farmers in the country to support the federal government in the implementation of the transformation agenda and learn from Brazil, which has now become a giant in agriculture after many years of implementing its agricultural policies.
Aside, Jonathan’s assurance to cheap loans for farmers, another highlight at the summit was the agreement between the federal government and the African Exchange Holdings to provide warehouses for farmers in various parts of the country. According to the federal ministry of agriculture, the system will enable Nigerian farmers and cooperatives to store their produce at accredited warehouses while the produce in the warehouses can be used as collateral to get loans.
Speaking at the signing of a Memorandum of Understanding, MoU, Adesina said the federal government would establish 800 warehouses across the country, which is at least one warehouse in every local government area in Nigeria.