AGRI-CULTURE VS. OIL-CULTURE: A Sustainable Alternative Model to National Revenue. – Benjamin Kalu.
In the early years of Nigeria and before the oil boom of the 70s, agriculture was the main source of national revenue. Nigeria brought international agricultural commodity trading to balance our trade relationships with many nations. Despite the fluctuating world commodity price, agriculture sustained the economy and was well above the 60% mark in her contribution to national GDP. Agriculture was equally recorded to be above 70% of national export, but declined to 25% of GDP in the 1980’s due to the oil boom. While cocoa was strong from the West, cotton and groundnuts in the North, oil palm was same in the East, and the unemployment rate was at 1.5% mainly among secondary school leavers.
The Structural Adjustment Programme (SAP) when the oil boom started sliming down, helped achieve an extra 15% percent of agricultural contribution to GDP, thereby, increasing it to 40% in the late 1980’s. This later dropped to 30% in late 1990’s owing to poor investment in agriculture, weak technological know how, government policies, lack of funding for research and development and the sole participation of the poor and the elderly in farming. This resulted in the annual crop production rate of 2.2% as against annual population growth rate of 3.2%, creating a huge gap for local consumption leaving nothing for export. Currently, agriculture regrettably contributes about 26% to Nigeria’s GDP.
Commendation has been extended to the initiators of various National Programmes like the Farm Settlement Schemes, National Accelerated Food Production Programme ( NAFPP) of 1972, Operation Feed the Nation (OFN) of 1976 initiated by President Obasanjo, the River Basin and Rural Development Authorities also in 1976, the Green Revolution Programme of President Shegu Shagari in 1980 and the World Bank – supported Agricultural Development Projects, which campaigned and and sought to increase food production.
The emergence of the oil days really diverted a lot of farmers’ attention from Agriculture , leaving the farm lands fallow while ushering Nigeria into an era of mono economic regime; a bane to effective economic planning for any Nation.
Though we became the 6th largest OPEC oil producer, such elevated status was not directly proportional to national development and the quality of lives of the citizens. The monster of corruption and the bite of the shale gas from the USA have devalued the treasure in oil and gas to the level that Nigeria is currently left with no option than to diversify her sources of revenue or risk her over-dependence on oil to the experiences of various crumbling nations who failed to take the alternative economic route.
The statistical down bound speed rate at which the local currency competes with major currencies is totally alarming. The weak purchasing power of the Naira has thrown many importation businesses into bankruptcy except the few that decided to consider our crusade of exporting more than we import. The economy of Nigeria currently can only be balanced up through product and service export to raise once again our foreign exchange and increase our foreign reserve over time. Oil and gas has failed to achieve this either because of over-dependence on it or mismanagement of the proceeds.
The various infantile economic policies have failed to treat oil and gas revenue as a means to an end. A situation where these proceeds are considered primary income , which must not be directly spent on any non income yielding expenditure but to be used as seed fund for the creation of future national wealth, has been the message of the writer’s campaign because it is a sustainable approach to economic growth.
It is therefore, the proposal of the writer that a major percentage of oil proceeds be invested in research and development, manufacturing and increasing our capacity in agriculture and mining of other solid minerals including alternative sources of energy, whose income will be directly used for national infrastructural development and other relevant budgeted expenses. This is the only way to eat our cake and still have it back or rather have it more. The need for a return to Import Substitution Industrialization(ISI) strategy in government policies cannot be over emphasized; a model encouraging the production of consumer products rather than their importation.
The recent democratic regimes have made effort to redirect the national economic interest to
Agriculture and mining of solid minerals. The reason for this is not far fetched since it is obvious we are running out of options. The last minister of Agriculture Dr. Akinwunmi Ayo Adesina who took over from Adamu Bello in 2011, performed over average in the ministry, but one wonders why the new administration supported him to accept a new elevated position at the African Development Bank , rather than consolidating on the gains he achieved in the last four years. Fixing our farms and increasing our food store houses remains a pertinent need in the hearts of the common Nigerian than occupying the big office at the ADB. To sustain the foundation he has laid and for the interest of continuity, a new minister with similar vision and passion should be cautiously picked for the needed growth in Agriculture. The writer is proposing a committee of past Ministers of Agriculture and relevant stake holders in the industry both in the private sector and the international development agencies to appraise our current position and draw a sustainable plan to be embraced by every new administration due to its effectiveness in meeting National economic goals.
Firms like OLAM, an international agricultural commodity trader who queued into this two decades ago have no regret today. When every one searched for oil wells to own, they searched for farms and farmers to support, the harvest today is a clear outcome of their investment in Agriculture.
The President Buhari’s administration needs to look at Agriculture from land allocation to planting, harvesting, processing, packaging, storage and incentivized international trading. All these seven steps to having our agricultural products in the market will create numerous jobs at every point of the steps and reduce our unemployment queue, thereby leading to massive wealth distribution through job creation. This will jack up our economy in no distant time and the impact of the drop in price of oil and gas will no longer be seriously felt . Agriculture will drive development better into the hinterlands which oil and gas failed to achieve. Therefore, the USAID’s Nigeria Expanded Trade and Transport (NEXTT) initiative supporting the effort of the National government to expand local efficiency and trade volume within and outside the ECOWAS region, a project that has identified the LAGOS – KANO – JIBIYA (LAKAJI) Corridor as a major route for trade in Nigeria with loads of potentials linking the North and the South in farming and trading with three groups ; Trade, Transport and investment should be encouraged and implemented immediately.
The desire for agriculture expansion, calls for the harnessing of our best experts in our Human resources data base with a mix of the renowned hands in mechanized and commercial farming overseas. This should be driven by the private sector in partnership with relevant world bank and United Nation agencies , funded by our Bank of Agriculture and supervised by the local ministry of agriculture and ministry of commerce, which should have a strong SME department to mentor Agriculture start up companies. SMEs may not go “the whole nine yards”, but could be the service providers to the major players in each of the seven steps till they are able to acquire sufficient industry experience.
The Bank of Industry will play a role in the next three stages in the seven step agriculture commodities life circle, by helping both major players and SMEs build sufficient capacity in the processing, packaging and storage of Agricultural products in a commercial quantity and quality all round the year, eliminating seasonal challenges to commercial farming and trading. While Nigeria Export Promotion Council (NEPC) in conjunction with Nigeria Export Import (NEXIM) Bank will be hands on in launching these quality primary and secondary products into the global market arena through commodity export.
NEPC will motivate the exporters and increase the investors interest in export if the terms of the EEG (Export Expansion Grant) is respected and made available to all and not a select few. Currently, it has been alleged that it takes time to be accessed and the bureaucratic processes and heavy documentation demand have discouraged many from putting up their claims and as a result have failed to export under the NXP terms. Any shipment outside the NXP totally denies the CBN the window to monitor volume of export and the expected
Export proceeds to be repatriated. This is not good for National Economic Planning.
If the export proceeds are constantly repatriated back to Nigeria by the exporter in line with the Nigeria Export Proceed (NXP) Regulations as provided for by the Central Bank of Nigeria (CBN), to avoid diversion of funds to other countries or other businesses, the Forex inflow will occupy a major position in the expected National income in our Budget.
The big question again is between “Oil-Culture and Agri-culture”, which one should be our current enculturation? The writer though a lawyer and a management consultant, has chosen enculturation of Agriculture and to build wealth out of export rather than import or Oil and Gas businesses , since these are no longer sustainable. As a result, the writer through his BERT (Bende Export Round Table) and Benjamin Kalu Foundation (BKF) has periodically trained over five hundred young graduates and pensioners to become Agro-Commodity exporters. The initiative has also supported many start-up farmers using her FSP (Farmers Support Project) for easy land acquisition, provision of scientifically researched seedlings, provision of expert advisory consultant services, easy access to farming tools and machines, transport and logistics, access to finance, trade contracts, export custom-related services and international market exposure.
The current wind of change should swing the nation from Oil-culture to Agri-culture if sustainable economic growth is to be achieved within a short period of time. This is a clarion call to the government, private sector, non-governmental agencies, donor agencies, foreign direct investors (FDIs) and the Nigerian Investment Promotion Commission (NIPC) to focus on agriculture as the utmost model of our national economic change that all Nigerians are longing for. In the current era, Agri-culture is a better model for change, than the abused Oil-culture.
Written from Lagos by
BENJAMIN O KALU.
Legal Practitioner and Management Consultant
Silk Partners LLP
Lekki Phase 1, Lagos
b.kalu@silklawpartners.com
