Agriculture offers a brighter future than crude oil

Ayo Akinfe

With global oil prices falling to below $40 a barrel, Nigeria is suddenly in a panic, with economic diversification now the most used phrase in our national vocabulary. It has taken the inevitable spectre of significantly reduced revenue to make us all realise that we have to look beyond the Niger Delta for our daily bread and once more activities such as mining, agriculture and manufacturing are trendy.

Given that about 95% of Nigeria’s export earnings come from oil, this is no surprise as one cannot dispute the fact that if you were earning $60bn from exports and this suddenly falls to $30bn, you are in trouble. To make matters worse, oil actually contributes very little to our local economy in terms of numbers employed, the growth of ancillary industries, out-sourcing to secondary producers and the spurring of a local supply sector.

Oil rigs are manufactured and assembled in Europe and North America and shipped to Nigeria, lock, stock and barrel. Other than those directly employed by the oil companies and the powers-that-be who revel off the proceeds of oil sales, very few Nigerians actually enjoy any benefits of the Niger Delta’s black gold.

Despite this, oil still accounted for the bulk of the foreign direct investment (FDI) coming into Nigeria. Only this week, Russian gas giant Gazprom said it would invest at least $2.5bn in the development and production of Nigeria’s natural gas reserves. One of Gazprom’s officials even declared that the company has begun serious talks with the Nigerian National Petroleum Corporation on joint venture projects.

Similarly, Ivory Coast’s national oil company Petroci is planning to acquire two Nigerian offshore oil blocks. Like everyone else, these investors see oil as a guaranteed return on their investments as the turnaround times are short, the oil is certain to flow and the sector is not labour-intensive.

There is the small matter of Niger Delta unrest but that can be taken care of with measures such as beefing up security, locating facilities way out at sea and drilling pipelines so deep that they are inaccessible. No one can doubt the fact that those interested in investing in Nigeria have done their homework well and are only prepared to put their cash where they are certain of successful returns.

I just wonder what the size of our economy would be if successive Nigerian governments ever thought this way. When seeking to woo investors and attract FDI, do our leaders ever think of what will generate the most jobs, what kind of investments are sustainable over long periods of time, what creates ancillary businesses and what kind of industries will have a domino effect on the rest of the economy?

Hopefully, the current collapse in oil prices will get us putting our thinking caps on. Attracting more investment into the oil and gas industry does nothing to diversify the Nigerian economy, is short-termist by its very nature and will have minimum effect on economic expansion in other areas.

Fortunately, a few of our governors are beginning to see the light and if they live up to the rhetoric, very soon, we might begin to see agriculture making a respectable contribution to our foreign export earnings. In Katsina State for instance, neem or dogonyaro cultivation is currently being stepped up to serve the twin purposes of being a foreign exchange earner and a vital tool in the battle against desertification.

Neem is used as a raw material in the production of fertiliser, soap, waxes, cosmetics, pharmaceuticals, insecticides and lubricants, among others. If its cultivation is widespread and is backed up with the establishment of processing facilities, this would create employment for vast rural communities. Dr EM Okonkwo, a director in the National Research Institute for Chemical Technology Zaria, recently revealed that in the 1980s, India received almost $2bn from the sale of neem oil alone annually.

In nearby Yobe State, the government has recently embarked on the largescale production of castor oil seeds as part of a project to engage about 100,000 farmers to cultivate more than 10,000 hectares of land. Castor oil can be used for pharmaceuticals and aviation fuel, among other things. Due to the ability of the crop to stunt the emission of carbon dioxide into the atmosphere, the European Union is crediting the Yobe State government with a carbon credit of N2bn as part of its global warming initiative.

Kano State is also trying to get in on the act, assuring its farmers of a 40% subsidy towards the purchase of all agricultural appliances. Alhaji Musa Suleiman Shanono, the state commissioner for agriculture, said the government is doing this as part of a drive to put more effort towards revamping the agricultural sector.

We already know what Governor Emmanuel Uduaghan is doing in Delta State and how he is determined to make agriculture the mainstay of the economy despite the fact that Delta is a major oil-producing part of Nigeria. As I have mentioned on these pages recently, Governor Uduaghan’s programmes have received the stamp of approval from the highest levels, with the Central Bank of Nigeria (CBN) acknowledging his sound economic policies. Last month, Delta State was adjudged by the CBN to be the number one state in Nigeria when it comes to using micro-credit financing to fight poverty due to the way it is empowering farmers.

While on the subject of governors who appreciate the importance of agriculture, I must make a brief mention of Kwara State’s Bukola Saraki. His initiative in introducing commercial farming into the country by bringing Zimbabwe’s growers to his neck of the woods must be commended.

Adamawa State’s governor, the retired naval chief Murtala Nyako is a commercial farmer himself. In terms of size, scope and sophistication, Governor Nyako’s farm is probably only second to that of his one-time commander-in-chief’s one at Otta. I for one expect to see this expertise brought to bear across the length and breath of Adamawa State.

Looking across Nigeria, a neutral observer would be surprised at how little agricultural produce we grow, export and earn from. Cash crops are major revenue earners for countries like Canada, Australia, Brazil, Argentina, China, USA, India, Malaysia, Pakistan, Vietnam, Bangladesh and Mexico, just to mention a few. There is simply no reason why Nigeria cannot join their ranks.

In Nigeria, cash crops we can grow in commercial quantities and export in large volumes include cocoa, palm oil, guar gum soyabeans, ginger, neem, castor oil, groundnuts, cotton, rubber, cassava, patchouli oil, coffee, coconuts, cashew, shea nuts, sesame seed, nutmeg, fenugreek, pistachios, macadamia nuts, cloves, fishmeal, cinnamon, eucalyptus, cardamom, and garlic just to mention a few.

If Malaysia can generate $10bn a year in palm oil exports alone, there is no reason why Nigeria cannot earn $15bn from the sale of the same crop, given that we have 10 times more land suited to the crop than them. We are currently generating about $60bn from the sale of crude oil exports a year but this is blinding us to the fact that we could be generating $100bn from the sale of agricultural produce.

In Nigeria as across the rest of Africa, we have developed the mindset that farming is for those “from the bush” and those who did not do well at school. This misguided manner of thinking is largely responsible for our neglect of one of our most valuable resources.

Expanding agriculture would boost the establishment of processing facilities, as guaranteed supply is a magnet for investors in the sector. It would also create thousands of jobs, enhance the development of ancillary industries and above all reduce our dependency on the finite resources of the Niger Delta.

As we look for a way out of the perilous situation we are currently in as a result of falling oil prices, we need look no further than our soil. It is time agriculture took its rightful place in the Nigerian economy.

Ayo Akinfe

aakinfe@aol.com

Robot  # 1 | 11.02.2009 02:48

Agriculture offers a brighter future than crude oil Ayo Akinfe With global oil prices falling to below $40 a barrel, Nigeria is suddenly in a panic, with economic diversification now the most used phrase in our national vocabulary. It has taken the inevitable spectre of significantly reduced revenue to make us all realise that we have to look beyond the Niger Delta for our daily bread and once more activities such as mining, agriculture and manufacturing are trendy. Given that about 95% of Nigeria’s export earnings come from oil, this is no surprise as one cannot dispute the fact that if you were earning $60bn from exports and this suddenly falls to $30bn, you are in trouble. To make matters worse, oil actually contributes very little to our local economy in terms of numbers employed, the growth of ancillary industries, out-sourcing to secondary producers and the spurring of a local supply sector. Oil rigs are manufactured and assembled in Eu...Read the full article.

ikoyiesho1  # 2 | 11.02.2009 10:23

Ayo thanks again, i seem to enjoy your series of developmental writtings, and i share the same opinion that Agricultural development is only our way out of extreme economic poverty. my only fear is that without adequate infrastruture--- agriculture might not just work..but at lease it should be on the front burner... Thanks

charles4u  # 3 | 11.02.2009 11:01

...Yes but with Nigeria's hope-less and vision-less leaders/government ? I dont think they even know what year we are currently except the value of money they wanna steal (They care ONLY about money).

allaccess  # 4 | 11.02.2009 12:36

=charles4u;324154>...Yes but with Nigeria's hope-less and vision-less leaders/government ? I dont think they even know what year we are currently except the value of money they wanna steal (They care ONLY about money). charles4u, I think the way forward is to change our mentality. Mentality is a very dangerous thing, it is that which can keep a person or race in total darkness for a very long time. If Nigerians for example realise simple things like this we might start to think better, those things are... 1, the citizens produce the Government 2, the government cannot "be" without the citizens 3, the Government is an image of the citizens since the Government are from the citizen pool, by the people and for the people 4, If the citizens refuse to exercise their fundamental rights then they should accept the government they have and lastly, it is laughable (monkey style) for any citizen to "allow" miscreants become their Government and then expect decent leadership from that government. It speaks volumes about that race of people. I hope you understand where I am going with this.

charles4u  # 5 | 11.02.2009 12:54

=allaccess;324190>charles4u, I think the way forward is to change our mentality. Mentality is a very dangerous thing, it is that which can keep a person or race in total darkness for a very long time. If Nigerians for example realise simple things like this we might start to think better, those things are... 1, the citizens produce the Government 2, the government cannot "be" without the citizens 3, the Government is an image of the citizens since the Government are from the citizen pool, by the people and for the people 4, If the citizens refuse to exercise their fundamental rights then they should accept the government they have and lastly, it is laughable (monkey style) for any citizen to "allow" miscreants become their Government and then expect decent leadership from that government. It speaks volumes about that race of people. I hope you understand where I am going with this. ...Do you know Nigerians realize all this things you pointed out ?, I just dont understand why there are no reactions. Nigerians naturally have this "thing" like to patiently solve issues/problems and all this even happens in any Nigerian family home. ..Do you know that Nigerians really know whats going on ?, but there is simply nothing they can do than to still fight for a better life (which I cant blame them). If..I say ..If the government was in better position..I personally dont think all this nonsense will have originated.

Palamedes  # 6 | 11.02.2009 13:37

I commend your article except for this quote: There is the small matter of Niger Delta unrest but that can be taken care of with measures such as beefing up security, locating facilities way out at sea and drilling pipelines so deep that they are inaccessible WHAT arrogance! “Small matter,” you say? If it is such a small matter, why have past and present governments failed to take care of it. Ask yourself deeply what these people are fighting for, and you would find the answer. True that they have allowed their messages to be distorted but who, reading this, would disagree that it is morally right to fight for employment and the environment? And isn't this what they are trying to achieve? The ONLY way to take care of the so-called small matter is (1) to create lots of jobs (agriculture, fishing, hitech etc.,) and (2) reduce the level of the environmental pollutions in the Niger Delta. Who would disagree with this twin solutions?

aguabata  # 7 | 11.02.2009 14:07

a country of 150million with our landmass can not survive on agricultural exports as the major commodity, everymonth the federal government shells out about 100billion naira to all states (check the ministry of finance website) Technology is the way forward for our size. The german economy which is the world's fourth highest GDP (2008) do not sell commodities. However can our warped society provide agric products that can compete with global prices?

El-Kanemite  # 8 | 11.02.2009 19:57

=aguabata;324240>a country of 150million with our landmass can not survive on agricultural exports as the major commodity, everymonth the federal government shells out about 100billion naira to all states (check the ministry of finance website) Technology is the way forward for our size. The german economy which is the world's fourth highest GDP (2008) do not sell commodities. However can our warped society provide agric products that can compete with global prices? What are you talking about? I don't seem to get your point. Have you forgotten about Cocoa House in the West, Groundnut pyramids in the North, Oil Palm acreages in the East. A beg my brother leave story!

Ayo Akinfe  # 9 | 12.02.2009 06:51

=aguabata;324240>a country of 150million with our landmass can not survive on agricultural exports as the major commodity, everymonth the federal government shells out about 100billion naira to all states (check the ministry of finance website) Technology is the way forward for our size. The german economy which is the world's fourth highest GDP (2008) do not sell commodities. However can our warped society provide agric products that can compete with global prices? Please read the piece properly. Agriculture in itself is not an end but a means to an end. Guaranteed supply is the first step in a programme that should ultimately lead to: <1> Semi processing <2> Processing <3> Packaging <4> Branding <5> Marketing <6> The manufacture of processing equipment <7> The manufacture of machine tools <8> The manufacture of high-tech farming equipment <9> The introduction of modern trading techniques <10> The introduction of a customer service ethos We will not attract investors into any of these sectors unless we can guarantee supply. Increasing the output of cash crops is the first step in a journey of a thousand miles.

Ayo Akinfe  # 10 | 12.02.2009 06:56

=Palamedes;324224>I commend your article except for this quote: WHAT arrogance! “Small matter,” you say? If it is such a small matter, why have past and present governments failed to take care of it. Ask yourself deeply what these people are fighting for, and you would find the answer. True that they have allowed their messages to be distorted but who, reading this, would disagree that it is morally right to fight for employment and the environment? And isn't this what they are trying to achieve? The ONLY way to take care of the so-called small matter is (1) to create lots of jobs (agriculture, fishing, hitech etc.,) and (2) reduce the level of the environmental pollutions in the Niger Delta. Who would disagree with this twin solutions? I am surprised that you are unable to recognise sarcasm when you see it Palamedes. That was tongue in cheek.

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