OPINION: Dwindling oil revenue and the agricultural sector

By Tayo Ogunbiyi
That the Nigerian economy is currently in a mess is an understatement. The drastic drop in revenue accruable to the country through oil is almost crippling the economy. Being a mono economy, with crude oil accounting for about 95 of Nigeria’s foreign exchange receipts, Nigeria is understandably one of the hardest hit nations in the present slump in global oil price. Sometimes in March, former Finance minister and co-coordinator of the economy, Dr. Ngozi Okonjo-Iweala, had painted a damning picture of what has become of the country’s economy. She said: “We have serious challenges. Things have been tough since the beginning of the year and they are likely to remain so till the end of the year.” To appropriately drive the point home, Iweala revealed that the federal government had to borrow N473 billion naira to meet up with recurrent expenditure including paying of salaries. As correctly predicted by Iweala, things are getting worse as about 24 States currently owe workers’ salaries of several months. In some of the states, official activities are almost at a standstill as workers have embarked on industrial action to drive home the demand for the payment of their salaries.
The current national economic predicament is a direct result of the failure of the federal government to diversify the country’s economy. Succeeding administrations in the country has for long been paying lip services to the development of the non-oil sector, but have all failed when it comes to actualisation. For instance, various administrations in the country have come out with different policies and programmes aimed at transforming the agriculture sector but the results have not always been anything worthwhile. The much celebrated ‘Operation Feed the Nation’ and ‘Green Revolution’ of the Obasanjo led military government and the civilian administration of Sheu Shagari respectively did little to ensure food security for the country.
Former Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina, once revealed that the Federal Government spent N98 trillion on the importation of food in the last five years. According to Adeshina, in 2010 alone, the nation spent a staggering N635 billion on wheat importation while another N35 trillion was spent on rice importation as well as N217billion on sugar importation and another N97billion spent on fish importation. This is surely a sad reflection on the nation’s dying agriculture sector.
Over the years, the export potential of cash crops such as cocoa, groundnuts, cashew among others, has seriously diminished. It is sad that Nigeria is no longer a key exporter of cocoa, groundnuts, rubber and palm oil. Ironically, these were the produce that the nation’s founding fathers built the prosperity of the country upon. It is incredible how a nation that was once the biggest poultry producer in Africa now has its total output reduced from 40 million birds annually to about 18 million. Agriculture has suffered from years of neglect, poorly conceived government’s policies as well as lack of basic infrastructure.
Despite the fact that agricultural production rose by 28 percent during the 1990s, per capita output rose by only 8.5 percent during the same decade. Consequently, agriculture has not been able to keep pace with Nigeria’s rapid population growth as evident in the sad reality that Nigeria, which once exported food, now relies heavily on imports to sustain itself. Contented in its newly found oil wealth, succeeding governments in the country simply allowed investment in agriculture to decline to a ridiculous state. The prospect of the sector, nevertheless, still reflects in its being accountable for over 26.8% of GDP and two-thirds of employment in the country.
The issues involved in the sorry state of agriculture in Nigeria are multifaceted. First, over the years, budgetary allocation for the sector has seriously nose-dive as against the United Nations specified 10% of annual budgetary allocation, what we budget for agriculture in recent time is just around 3 %. When one considers the fact that we have not been able to achieve full budget implementation, in recent years, the precarious state of agriculture will better be appreciated.
Second, there seems to be a communication gap between the farmers and policy implementers. In most cases, the policy implementers don’t really carry the farmers along in the process of policy implementation. This, perhaps, is responsible for the inability of subsidized fertilizers and loans from the government and its agencies to get to the reach of the real farmers who are in dire need of it.
Third, the mass departure of the young ones from the rural areas to the cities in search of the proverbial Golden Fleece has created a vacuum thus leaving agriculture to the old and weak ones. Consequently, the best form of farming we have now, where it exists at all, is subsistence farming. Equally, lack of necessary infrastructure to encourage mechanized farming is another bane of agriculture in the country.
It is therefore; not surprising that Nigeria cannot be categorized as self-sufficient in food production. Data from various world organisations reflect the declining fortune of the sector in the country. Available statistics shows that Nigeria has over 53 million starving people, about 30 per cent of its estimated 150 million people.
To reverse the drift, government needs to really appreciate the potentials of the sector as a catalyst for economic and industrial transformation. There is a need to recreate a modernized professional and commercial farming sector, supported by improved infrastructure and research into high performance seeds and livestock. To encourage the teeming army of un-employed youths in the country to take to agriculture, government should make access to loans meant for agriculture much more easier while large scale farming powered by mechanized infrastructures should be the central goal.
Equally, local food production needs to be encouraged by making inputs available, giving farmers access to more farm land, providing micro credit at subsidized cost, supporting adequate processing and storage, providing market facilities, and discouraging import of produce with local substitutes through tariffs. It is also important that a significant portion of the country’s annual budget be set aside for the development of the sector. This can be achieved if government reduces its expenses on ventures that are grossly un-productive.
Similarly, there is an urgent need for the country to put in place an agricultural investment code that could guide and enable foreign investors to make informed choice on their areas of interest in the agriculture sector. This is presently lacking in the country and if we are to maximize the potentials of the sector, it is imperative that we develop one.
Now that the federal government and various States in the country are groaning under severe economic burden is the exact time to pay adequate attention to the agriculture sector as it offers unlimited opportunities for job and wealth creation as well as accelerated economic and industrial growth. The nation of Israel is not as fortunate as we are in this perspective. Yet, it is renowned for her rich agro-economy. We could draw lessons from China which bounced back from a great famine that took millions of lives between 1958 and 1961 to become the world numero uno in food production.
Ogunbiyi is of the Features Unit, Lagos State Ministry of Information and Strategy, Alausa, Ikeja.