President Buhari Insists Agric Autarky Policies Have Saved Nigeria

Nigeria’s agricultural vision is based on erroneous understanding of the role of agriculture in driving development. Over the years, the nation has rolled out poorly designed interventions which the Buhari Government seems to have intensified.

Under President Buhari, a key strategy for agricultural development has been to prevent food imports, for instance through border closure. To complement that, the government is also aiding Nigerian farmers to increase production through numerous credit schemes administered by the Central Bank of Nigeria.

Experts think that rather than throw money at farmers to produce for the Nigerian market, the government ought to focus on removing a host of barriers that make Nigerian agriculture inefficient, stifling export to global markets.

For instance, Malaysia, Nigeria’s former competitor in global markets for agricultural produce, has left it completely behind despite Nigeria’s much larger population and landmass.  Nigeria’s agriculture export is below $1 billion while Malaysia’s is worth over $27 billion (respectively 2016 and 2017 figures). Malaysia’s global agricultural trade reached $43.5 billion in 2019, with exports of $25 billion and imports of $18.3 billion. The dominant export is palm oil, and the leading markets over the past several years for Malaysia include India, China, Pakistan, European Union, and the United States.

Over the past two decades, value-added per capita in agriculture has risen by less than 1 percent annually. A United Nations’ study estimates that Nigeria has lost USD 10 billion in annual export opportunity from groundnut, palm oil, cocoa and cotton alone due to continuous decline in the production of those commodities.

The low productivity of Nigerian agriculture and its inability to compete in the international market are caused by an array of problems such as insecurity, poor output quality owing to the lack of extension services and lack of storage facilities. Other barriers are cumbersome processes at Nigerian ports which cause delays in delivery to overseas customers and sometimes damage to crops and fruits, extortion by security agencies which causes delay in transportation to domestic and international markets and adds to cost, among others. Delivery delays have created the impression that Nigerian exporters are not reliable; their contracts are often cancelled and foreign importers turn to other markets to source produce.

These are structural problems that throwing money at farmers and closing Nigerian borders will not resolve.  Many experts, including members of President Buhari’s Economic Advisory Council, would not agree that the CBN’s credit schemes are the way to boost the productivity of Nigerian agriculture or create jobs for Nigeria’s educated but unemployed youths.

A recent statement by the Nigerian Economic Summit Group (the NESG) cast doubt on the success of CBN’s agriculture interventions, provoking a rather impetuous reaction from the CBN. Judging from the CBN’s reaction, the apex bank seems to imagine that disbursing huge sums of money is a sufficient condition to boost the productivity and output of Nigeria’s agriculture. The CBN has had difficulties recovering payments for its agriculture loans, raising doubts about their sustainability.

It is frequently noted that nations have drastically improved agriculture production precisely by employing less people in the sector while massively boosting productivity through the use of technology. But the Nigerian Government often seem to suggest that unemployed graduates should take up farming.

Much of Nigerian agriculture still lacks basic inputs such as tractors and irrigation, thus stifling productivity. Nigeria has only 6.7 tractors per square kilometre of arable land, while Kenya has 25, Peru 35.3, Angola 28 and China 83.7. Nigerian Government’s attempts to supply inputs is often riddled with corruption; for instance tractors are rented out to farmers are near commercial rates by corrupt officials.

The Food and Agriculture Organisation of the United Nations says Nigeria’s agricultural sector is being faced by a number of challenges, including “outdated land tenure system that constrains access to land (1.8 ha/farming household), a very low level of irrigation development (less than 1 percent of cropped land under irrigation), limited adoption of research findings and technologies, high cost of farm inputs, and poor access to credit”.

Other challenges include inefficient fertilizer procurement and distribution, inadequate storage facilities and poor access to markets—–all of which have all combined to keep agricultural productivity low, with high post harvest losses and waste.

Removing these barriers would attract investment into agriculture from well-resourced  local and international players who are able to afford directs inputs into farming such as tractors, irrigation systems and fertilisers so far problems which greatly increase costs and which only the government can solve are taken care of.

The nation needs to address these challenges if it must record progress in its resolve to develop the agricultural ecosystem, create jobs and, by extension, develop the larger economy. The problems will not be solved by a strategy which limits Nigeria’s ambition to shutting itself off from the massive global trade in agriculture produce which in 2016 was worth $1.6 trillion and producing for the domestic market which has the highest number of people living in extreme poverty in the world. A key part of the solution to Nigeria’s poverty is focusing on structural reforms which enable its farmers to export to the world’s fabulously rich markets for agricultural produce, segments of which they dominated in the past.

The facts also do not support President Buhari’s self-assessment on borrowing to develop infrastructure. Rather, than design policy frameworks to attract investment in a railway system focused on evacuating agricultural produce and moving manufactured goods between Nigeria’s main economic hubs, Nigerian governments have sought high-cost Chinese loans to build “white snakes” i.e. uneconomic railway services to move passengers which have to be permanently subsidized.

And not until the novel coronavirus-induced drastic fall in oil prices almost completely emptied the Government’s treasury, the Buhari administration had chosen to spend more on fuel subsidy and borrow at very high commercial rates from western investors, rather than spend money on education, healthcare and infrastructure, expenditure which would have boosted Nigeria’s productivity in agriculture and other sectors.