Following Nigeria’s hosting the World Economic Forum this month, critical issues are bound to arise, including how Nigeria’s next move in closing the financing gap in agricultural investment could be central to the success or failure of the continent’s fight against hunger, writes Nachilala Nkombo.
Nigeria is not only Africa’s most highly populated country. As everyone now knows, with its recently rebased GDP of $500bn compared to South Africa’s $370.3bn at the end of 2013, the federal state has surpassed the latter as the continent’s largest economy. Its demographics and this development place Nigeria at the epicentre of Africa’s prospects and the challenges to end the continent’s food insecurity.
Any opportunities created or thwarted in this market of 170 million people could signify a great step forward or backward for the continent, including Africa’s fight against poverty. As Nigeria hosts the World Economic Forum (WEF) in Abuja this month, not only are its citizens watching and asking questions, so are investors.
As in the rest of Africa, agriculture is the single most significant economic sector in Nigeria in terms of its potential to rapidly address the poverty and hunger challenge the country faces. The Food and Agriculture Organisation (FAO) of the United Nations estimates that the impact of agricultural growth in alleviating poverty is 11 times more than that of growth in other non-agricultural sectors, such as utilities and mining in Africa. In Nigeria, the sector employs almost two-thirds of the overall labour force, contributes over 40% of GDP (un-rebased) and provides about 88% of non-oil earnings.
Yet, Africa’s oil-rich green and white nation still struggles to feed itself. While unemployment levels in Nigeria remain similar to those in Africa’s “new number 2” economy, South Africa (23.9% compared to 24.1% respectively), poverty and malnutrition levels are glaringly higher in Nigeria. 24.4% of Nigerians are malnourished, compared to only 8.7 % in South Africa’s. 46% of Nigerians live in poverty, compared to the equally worrying, but lower 23% in South Africa.
Why then is there such a low conversion of Nigeria’s impressive new GDP numbers to collateral economic and social security for much of its large population? Part of the answer may lie in the challenge posed here by Francis Chigunta, a former political advisor to the former Zambian Republican President Rupiah Banda.
He tenders: “Why is it that French, American, and Japanese politicians bend over backwards to cater to the needs of their farmers, yet in Africa, where rural votes represent more than two-thirds of the total, governments routinely neglect agriculture? In part, donor dependency in much of Africa has broken the link of responsibility between government and citizen, making it too easy simply to excuse government non-performance by blaming the weather or lack of donor support.”
As a majority of Nigeria’s poor live in the rural areas and over 14 million families depend on agriculture for their livelihood, strategic government-led investment in agriculture, complimented by private sector investment in Nigeria is more crucial now than in Japan, USA and Europe, if the country is to record more gains.
According to Ibrahim Mayaki, the CEO of Nepad, tax revenues available to meet development challenges are now higher than when African countries signed the Maputo Declaration to address food security – they rose from $140 billion in 2002 to $500 billion in 2011.
He says: “We no longer have an excuse not to strengthen our human capital and knowledge to transform the agriculture sector.”
This message should be heeded first by Africa’s new firstborn – Nigeria.
In February 2014, President Goodluck Jonathan launched the ambitious National Industrial Revolution Plan (NIRP),which identified increased agricultural production as strategic goal to fuel a large part of the industrial revolution. However, agriculture production in Nigeria is still at a subsistence level, with the country spending over 1.3 trillion naira ($8.1bn) annually on importing food items, including wheat, rice, sugar and fish.
The agricultural sector is characterised by low productivity, low value addition and low exports. Unlike the levels of public investment made by similarly populous countries such as Brazil, India and China, the sector in Nigeria has suffered from low investment, largely leaving farmers to fend for themselves.
More specifically, over the years the federal government has fallen short of its 2003 Maputo commitment to invest at least 10% of its federal budget in agriculture.
Despite Nigeria being a leader in the AU’s Comprehensive African Agricultural Development Programme (CAADP), the Regional Agricultural Policy for West Africa (ECOWAP) and having its own national Agricultural Transformation Agenda (ATA), publicly available data from experts in and outside Nigeria shows that public investments in the agriculture sector have been trending towards zero. According to the National Association of Nigerian Traders (NANTs), Nigeria’s agriculture budget has plummeted from 6.2% of the federal budget in 2009 to 1.47% in 2014.
The paradox that dwindling government financing commitments to supporting domestic agricultural production and the alarming cost of four food imports are demanding approximately 20% of the federal budget, requires quick resolution. This trend undermines the goals of the ATA to significantly increase agricultural production, reduce food imports and create 3.5 million jobs by 2015.