Year of Sublime Growth for Agribusiness

Jonathan Eze writes that 2018 was a favourable year for the agricultural sector

In 2018, a total budgetary allocation of N118.98 billion was allocated to the agricultural sector. This amount was an improvement from the N103.79 billion allotted to the sector the previous year.

However, the federal government was optimistic that the sum will complement the existing efforts of the Central Bank of Nigeria (CBN) to boost agricultural productivity through its development finance initiatives, especially the Anchor Borrowers Programme, Commercial Agricultural Credit Scheme (CACS) and the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL).

All these programmes initiated by the CBN supported the agricultural sector which after the economic recession suffered by the country was seen as the sector that would drive the government’s economic diversification programme.

Speaking during the 2018 budget presentation last year, President Buhari had 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.

“In 2018, many factories and projects in the food and agricultural sectors were inaugurated 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.

Until recently, efforts by governments to encourage farmers to produce locally have ended up in futility following continued smuggling of food items which sometimes are sold cheaper than the locally produced ones.
It was 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, had said the government would ensure that smuggled food products are not sold in the country, assuring federal government’s intensified effort to address the anomaly.

“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 five 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.

Presidential Fertiliser Initiative
In February, the presidency commenced the Presidential Fertilizer Initiative (PFI) which was approved by President Buhari in December 2016, to achieve the local production of one million metric tonnes of blended Nitrogen, Phosphorous and Potassium (NPK) Fertilizer for the 2017 wet season farming and an additional 500,000 metric tonnes for dry season farming. It all started in December when the King of Morocco, His Royal Majesty Mohammed VI, paid a 2-day state visit to Nigeria in 2016.

During the visit, both leaders signed several agreements which included a partnership between Fertiliser Producers and Suppliers of Nigeria (FEPSAN) and OCP, a state-owned Moroccan company and a world leader in phosphate and its derivatives.

The OCP was to supply discounted phosphate to Nigeria, to help support the domestic blending of NPK Fertiliser starting in 2017 and with that the stage was set. The objective of this initiative was to ‘disrupt’ the importation of blended fertiliser status-quo, by directly negotiating discounted contracts to procure the 4 constituent raw materials for NPK Fertiliser  which are locally-sourced urea, locally-sourced limestone granules (LSG), diammonium phosphate (DAP) imported from Morocco, and Muriate of Potash (MOP) sourced from Europe and blending these locally to produce NPK Fertiliser at reduced cost.

Anchor Borrowers Scheme
The broad objective of the ABP was to create economic linkage between the small holder farmers and reputable large scale processors with a view to increasing agricultural output and significantly improving capacity utilisation of processors.

According to the CBN Governor, Godwin Emefiele, “As at October 2018, a total number of 862,069 farmers cultivating about 835,239 hectares, across 16 different commodities, have so far benefited from the Anchor Borrowers programme, which has generated over 2.5 million jobs across the country.”

He added: “It is in light of the success of the Anchor Borrowers Program with regards to cultivation of rice and maize that the Monetary Policy Committee in its last meeting on the 21st of November 2018 recommended that the Anchor Borrowers program be applied to other areas such as palm oil, tomatoes, and fisheries to mention a few.

“The CBN recently introduced the Real Sector Support fund; a facility meant to provide cheap funding at no more than nine percent to new projects in the Agric and manufacturing sectors; aimed at boosting output and creating jobs.

Agric Export in 2018
The federal government’s initiative on export especially the agricultural commodities yielded results as a total of 45, 462 metric tonnes with free on board (FOB) value of N29.146 billion of agricultural produce were exported out of Nigeria between January and March 2018.
Customs Area Controller, Nigeria Customs Service (NCS), Tin Can Island Command, Comptroller Musa Abdulahi, disclosed this.

Giving a breakdown of the products exported, he said agriculture products export was responsible for 38, 517 metric tonnes with FOB value of N22.435 billion while processed and manufactured goods exported was 6,945 metric tonnes valued at N6.711 billion.
This, he stated represented an improvement of 558.46 per cent in terms of volume and 402.24 per cent in terms of FOB value when compared with the 8,140 metric tons valued at N7.246 billion recorded between same period in 2017.

He listed the agriculture produce exported to include; cashew nut, rubber, hibiscus flower, cocoa butter, sesame seeds, processed wood, frozen shrimps and processed leather while the manufactured products were; empty bottles, biscuit, cigarette, polyethylene, billets, soap, hair cream and tissue paper.
In all, it was a good year for the agricultural sector as it recorded growth and improved turnover in 2018.