Nigeria’s inclusive growth challenge in agriculture

The oil boom of mid to late 1970s changed that political economic equation, causing agriculture to lose its pride of place. Although agriculture still contributes 41.8% to the GDP and employs up to 70% of Nigeria’s population, its growth and development are hindered by so many factors some of which include inconsistency in agricultural policies, […]

The oil boom of mid to late 1970s changed that political economic equation, causing agriculture to lose its pride of place. Although agriculture still contributes 41.8% to the GDP and employs up to 70% of Nigeria’s population, its growth and development are hindered by so many factors some of which include inconsistency in agricultural policies, smallholder farmers’ lack of access to agricultural finance as well as poorly organized markets which results in poor product pricing. Other factors include poor and inadequate extension services – currently at 1 extension staff to 3,000 farmers, low adoption of best agronomic practices and declining soil fertility resulting in low agricultural productivity. High fragmentation of farms and absence of viable farmer-based organizations (FBO) make sustainable agricultural finance a mirage. The smallholder farmers that work so hard to produce approximately 70% of the staple crops consumed in the country do so often using rudimentary farm implements and have not been able to break away from the vicious cycle of poverty. The smallholder farmers make up a large proportion of the 57% Nigerians living in poverty today.
Since the smallholder farmers produce majority of the staple food crops, the sector still contributes up to 42% of the GDP and employing about 70% of the population directly and indirectly, it should naturally help reduce poverty in Nigeria. Unfortunately, that is not the case.   This is the ‘Inclusive growth challenge’.  Inclusive growth by definition means pro-poor growth that decreases the rate of poverty and increases the participation of people in the growth process of the country. It also implies equitable distribution of scarce resources that benefits every stratum of the society.
Available statistics show that Nigerian economy has been experiencing sus-tained economic growth almost every fiscal year but that this growth cannot be said to be inclusive. While the country continues to achieve growth – primarily via other sectors other than agriculture – development cannot be said to be achieved since development is that growth (quantitative) plus qualitative changes in the economy such as what is happening to the quality of lives of the citizenry, unemployment and income inequality.     
Looking at the huge potentials in the Nigerian agriculture, it is safe to say that appropriate and targeted investments in its development have the potential for achieving faster growth that is inclusive. With over 70 million people living in the rural areas, about 36 million hectares of arable land and abundant water resources, the country can be on the path to achieving great transformation, inclusive growth and invariably reduce extreme poverty and hunger – a Millennium Development Goal to be achieved by 2015.
Going through a recent publication the ‘New African Special Report’ of the African Green Revolution Forum (AGRF), I was amazed to understand that the Nigerian food import bill was consuming about $8 billion in foreign exchange yearly and growing at 11% a year – making the country Africa’s largest rice importer. And while Nigeria produces about 65% of tomatoes in West Africa, it is now the largest importer of tomato paste from China and Italy. It pays more than $360 million to import about 300,000 metric tons annually of tomato paste. This is the case of having everything and lacking everything. By depending on importation of a stable food crop such as rice, Nigeria is no doubt helping other countries to growth their economy at the expense of ours. We generate productive employment in other countries at the expense of reducing our unemployment. We strengthen agricultural value chains elsewhere at the detriment of ours – oh Nigeria!
Unfortunately, since the Maputo Declaration 10 years ago – where African Leaders agreed to contribute a minimum of 10% of their national budgets annually towards agricultural develop-ment – which resulted in the development of a Comprehensive Africa Agricultural Development Programme (CAADP), Nigeria is yet to allocate any amount near the 10% of its annual budget towards agricultural development. The 2003 – 2009 government expenditure on Agriculture as a percentage of national budgets stood at 3.6% while the 2011 expenditure stood at 1.7%. This cannot deliver on the promise!
From my recent work in rural development field, I have come to realize that until the entire agricultural value chains are developed with targeted investments – from input producers to smallholder farmers, to agro dealers and processors and the markets – the smallholder farmers will not be able to break even and get value for their hard work. Thus, they will continue to contribute to growth while remaining in poverty. In fact the cycle just continue as the resource poor farmers produce for subsistence, end up selling at harvest to middle men and speculators at a very low price only to end up buying back at a higher price later to feed the same family that worked so hard to produce the food. This is the sad story of the Nigerian smallholder, hardworking but resource poor farmer. With all the existing government supported  programmes towards financing Agriculture, the key actors mainly the financial institutions continue to view agricultural lending as ‘high risk’ and previous schemes failed to address the smallholder farmer financing requirements. Since prior governments at all levels continued to subsidize fertilizers, they ended up attracting the ‘almighty political farmers’ into the equation and the result of that is for all to see – monumental corruption in the system. This would be a topic of another day.  
From the Maputo Declaration to the current Agricultural Transformation Agenda (ATA) in Nigeria, with its flagship initiatives, it is evident that Nigeria and indeed other African countries have robust policy documents that only await action and faithful implementation to help achieve the desired inclusive growth.

Yunusa is Team Leader & Operations Manager, UN Millennium Villages Project, Kaduna.
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