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2018 Outlook For Nigeria’s Agricultural Sector

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As part of its commitment to diversify the Nigerian economy, President Muhammadu Buhari-led federal government has singled out agriculture as a viable alternative for oil, which is why President Buhari proposed N118.98 billion as budgetary allocation to the Agricultural sector for the year 2018.

This amount allocated to the sector is however an improvement from the N103.79 billion allotted to the sector in the Nigerian 2017 budget, an increase of about N15.19 billion.

The President is optimistic that the sum will complement the existing efforts by the Federal Ministry of Agriculture and the Central Bank of Nigeria (CBN) to boost agricultural productivity through increased intervention funding at single digit interest rate under the Anchor Borrowers Programme, Commercial Agricultural Credit Scheme (CACS) and The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL).

It is worthy of note that the Nigerian economy has been majorly sustained by oil, and the government has seen agriculture as another mainstay and bedrock of the nation’s economic growth.

For the most part of 2016, and in 2017, oil production plunged to new lows due in large part to the effect of militant activities in the Niger Delta region which have seen numerous oil pipelines blown up by militants, resulting in Nigeria going into its first recession in over 20 years resulting in high inflation, a dollar liquidity crunch, budget deficit in government spending and a declining stock market.

And the agricultural sector had been the biggest positive contributor to the growth. In all quarters of 2016, it was recorded as the top performing sector with the growth of 4.54 per cent, again repeating its performance of a 4.53 per cent growth in Q2. Agriculture output picked up again in Q2 2016 and remained so since its plunge that saw it record the lowest quarterly growth in eleven quarters in Q1 2016.

In 2017, from 3.4 per cent in Q1 2017 to 3.0 per cent in Q2 2017, the Nigerian agriculture sector grew to 12.5 per cent y/y in nominal terms, compared to 9.8 per cent in Q1’17.

However, there was a record of a slight slowdown in the sector, particularly in crop production (3.2 per cent y/y vs. 3.5 per cent y/y in Q1’17) despite the efforts to support the sector by expanding famers’ access to credit through the Central Bank of Nigeria’s Anchor Borrower’s Programme as well as the Growth Enhancement Scheme by the Federal Government.

Speaking during the 2018 budget presentation last year, President Buhari said, “Diversification efforts have resulted in improved output particularly in the agriculture and solid minerals sectors. The relative exchange rate stability has improved the manufacturing sector’s performance.

“We have got to get used to discipline and direction in economic management. The days of business as usual are numbered. Two years ago, I appealed to people to go back to the land. I am highly gratified that agriculture has picked up, contributing to the government’s effort to restructure the economy. Rice imports will stop this year. Local rice, fresher and more nutritious will be on our dishes from now on,” he added

The President also spoke on other ongoing initiatives in the sector. “We have also completed over 33,000 hectares of irrigation projects that have increased water availability in key food producing states. We shall continue to intensify our interventions through the Anchor Borrowers’ Programme and the Presidential Fertilizer Initiative to ensure that this momentum is sustained.

“We have also made provisions in the 2018 budget to complete ongoing irrigation projects at Ada, in Enugu State; Lower Anambra, in Anambra State; and Gari, in Jigawa State. In 2017, many factories and projects in the food and agricultural sectors were commissioned in Kebbi, Nasarawa, Kaduna, Anambra, Edo, Jigawa, Rivers, Niger, Ogun and Ebonyi States, to mention a few. This is a clear statement that our economic diversification and inclusive growth ambitions are coming to fruition” Buhari said.

Meanwhile, analysts and stakeholders are of the view that to achieve economic diversification, with a large land mass of 923,768 km² and a predominant number of Nigerians venturing into farming, it is imperative that the Nigerian government revisit its commitment made 15 years ago, the Maputo Declaration, a pledge made by African Heads of State and Government pledged to allocate 10 per cent of their national budgets to the agricultural sector as part of the Comprehensive Africa Agriculture Development Programme (CAADP).

Following the agreement by African nations, countries such as Burundi, Burkina Faso, the Democratic Republic of Congo, Ethiopia, Ghana, Guinea, Madagascar, Malawi, Mali, Niger, Senegal, Zambia, and Zimbabwe have met or surpassed the 10 percent target in one or more years.

The agriculture sector on the other hand, is expected to drive growth on the non-oil front. According to Vetiva Research, the agriculture sector has continued to grow albeit at a decelerating pace (3.1 per cent in 2017), driven by import substitution, easier access to credit and fertilizers through various schemes that have improve farmers access to such facilities.

The director-general, Lagos Chamber of Commerce and Industry (LCCI), Muda Yusuf bemoaned in a telephone interview, that the agriculture sector is seriously challenged by lack of infrastructure which has caused enormous loss to farmers. “Post-harvest loss is so significant such that farmers especially in the rural areas count so much loss which also causes prices of food items to be high,” he said.

Yusuf identified weak value-chain as a major setback to the agriculture sector, adding that the lack of storage and agro-processing facilities pose great impediments to Nigeria’s agriculture value chain. He said that what the sector presents is chain of losses and huge wastage of farm produce with the country dealing with poor management of farm produce.

LCCI boss also said that lack of storage facilities and sales points of produce had hampered agricultural development in the country which has further exposed farmers to huge losses and hindered exports of produce. The DG regretted that most farms in the country lack access roads, making it difficult for farmers to transport their farm produce to the markets.

He noted that a huge proportion of food crops produced in Nigeria is wasted due to lack of storage house, lack of processing and lack of relevant facilities. Yusuf also pointed out that inadequate power supply is a major constraint in the sector because without constant power supply, even when the facilities are available, the facilities might not be

He advised the government to make funds available to farmers this year because they need income and the little income they earn from their farms is not enough to sustain them till the next farming season. He also argued that transportation is a major and critical factor for the sector. According to him, the development of affordable transportation facilities is necessary.

The DG again suggested the introduction and development of subsidy that can empower farmers and enable them to reap the benefits of their labour. He stressed further that apart from subsidising output, government should have a guaranteed market price and can also buy from farmers and store the produce.

On the importation food items, which have been identified by some pundit as a major factor militating against agricultural productivity in the country, successive governments over the years had taken steps to reduce the level at which some food item which can be produced locally are being imported and smuggled into the country.

Over the years, these efforts by these governments to encourage farmers to produce locally have ended up in futility following continued smuggling of food item which sometimes are sold cheaper than the locally produced ones.

It is on this premise that President Buhari’s administration through the Ministry of Agriculture and Rural Development, called a stakeholders consultative meeting last year on illegal importation of food items into Nigeria.

During the meeting, the Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, said the government would ensure that smuggled food products are not sold in the country, assuring FG’s intensified effort to address the anomaly in 2018.

“The federal government will do everything possible to ensure that these smuggled products are not allowed to be sold in Nigeria, this is just the first step, so our appeal is that the citizens and stakeholders should try and patronise made in Nigeria rice, and that is the only way we can sustain the rice farmers, we have 5 million rice farmers and more people are going into rice production, we are also feeding the entire West Africa sub-region, but despite all that, Thailand, India and some other countries, see Nigeria as a threat,” he said.

The poultry stakeholders who spoke during the meeting, said, “We need to create a poultry village where our meet processors can establish their poultry, especially some states in this country where there is high consumption of poultry products, Lagos, Ibadan, Port Harcourt, Warri, Abuja, Owerri, Kaduna, Kano and Jos, we are trying to Liaise with the government of these states, if they can give us land, we are ready to develop it.

So, it is expected that President Buhari’s administration, which has prioritized agricultural sector, will attend to the yearnings of the poultry stakeholders this year. On the illegal fishing, President Buhari last year approved the procurement of patrol vessels to curb and monitor illegal and unregulated fishing, and boost security on the waterways. The Vice President, Yemi Osinbajo, made the disclosure during the last year 10th Annual Ministerial Conference of the Fisheries Committee for West Central Gulf of Guinea (FCWC).  That means that by the end of 2018, illegal fishing activities on the waterways will be stamped out.


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