Nigerian economy holds the key to ending hunger in Africa.
lowing 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.
Nachilala Nkombo is Deputy Director - Africa at ONE.org 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 IndustrialRevolution 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.
A big government-led financial push is needed to unlock great opportunities in subsistence agriculture. The current staving off of the agriculture budget means that Nigeria only has 5000 extension agents, or one extension worker supporting roughly 3,300 farmers.During 2014, the AU Year of Agriculture and the twentieth anniversary of the UN International Year of the Family, the need for urgent and better federal investment, followed by state commitments, in agriculture could not be more pressing, and local grassroots organisations in Nigeria have found consensus on that. International NGO ONE.org was recently joined by its Nigerian partners to launch its ongoingDo Agric, It Payscampaign in Nigeria. This calls on Africans to push their leaders to commit to implementing effective agricultural policies and scaling up public investment.On 20 March, ONE.org, NANTs, a budget transparency digital start-up known as BudgIT, the Youth Program for Agriculture and Entrepreneurship Development (YPAED), Voices for Food Security, Oxfam, the Tony Elumelu Foundation (TEF) and over 150 participants including celebrities D’banj, and Big Brother Africa stars, Kevin Pam and Melvin Oduah, launched the campaign at a joint consultative forum in Abuja.
Insightful statistics were further revealed by the participants about the state of agriculture in Nigeria – all pointing to an urgent need for the Nigerian government to demonstrate its confidence in the agriculture sector, to support its own industrialisation goals, and to transform Nigerian livelihoods by reversing the downward trend of its public investments in agriculture, in line with the country’s own AU Maputo commitments and ATA targets.As Professor Gbolagade Ayoola, President of the Farm and Infrastructure Foundation (FIF) and Chair of Voices for Food Security noted during the forum, of the country’s 1.4% budgetary allocation to agriculture, the amount available to farmers after accounting for administrative costs and leakages is less than 1%.
BudgIT’s analysis of Nigeria’s Federal government financial allocation to agriculture against its own ATA financial requirements, underpins a dismal contrast: since 2012 Nigeria has not met its own ATA financing targets, and in the 2014 budget, Nigeria has allocated only 66 billion naira, less than half of the projected 136 billion naira.BudgIT and NANTs both decry the lack of transparency in the Nigerian federal budget on agriculture, making it onerous for farmers and citizens to follow. But the Nigerian government has not been completely inert to these calls. The Minister of Agriculture, Dr Akinwumi Adesina is leading the implementation of innovations and pilots that are part of his ATA programme. These include the staple crops processing zones and the Nagroprenuer programme, which aims to raise 750,000 Nigerian agricultural entrepreneurs. The federal ministry has also provided a budget line for women and greater planting resources in the 2014 budget, compared to the previous year.
As Mrs Edna Eneh, the representative of the Minister of Youth Development said during the Do Agric launch, the government remains committed to strengthening the capacity of youth participating in the agriculture sector. This was echoed by ONE.org Africa Policy Advisory Board member and Director General of Nigeria’s Securities and Exchange Commission, Arunma Oteh, when she used the phrase: “no farmer, no nation”.Jude Imagwe, Senior Special Assistant to the President on Youth and Student Matters, also lent his support by urging participants at the launch to look to the future of agriculture rather than focusing on the existing problems. He committed to sharing the policy recommendations prepared after the discussion with President Goodluck Jonathan. Goodwill is plentiful. Yet, direct public investments in Nigeria remain low. This lies at the heart of the hunger games in Nigeria. As Senator Sefiu Kaka, Deputy Senate Committee Chair on Agriculture stated, unlike other African countries such as Ethiopia, Burkina Faso and Ghana, that have met their Maputo targets and heavily invested in services and infrastructure to support smallholder farmers over the past 11 years since the Maputo Declaration, Nigeria’s economic status makes it easier for the country to meet its Maputo and ATA commitments. The Nigerian government’s financial muscle is boosted by high oil revenues, totalling $50.3bn. Senator Kaka thus calls on the Nigerian executive to address the financing gap for agriculture and target investments in youth. ONE.org and its partners believe that only through heavy catalytic investments that benefit smallholder producers and the agriculture value chain, can Africa’s most populous nation beat South Africa in improving the standard of living of its citizens. Beyond heavy investments, policy reforms are also urgently needed to transform agriculture and create an equal playing field for both large and smallholder farmers. Investments in key areas including infrastructure, training, and research and development need government leadership and mediation. Nigeria has what it takes to achieve this – goodwill, human capital and natural resources – but it must close the agricultural financing gap. This move will go a long way towards ending the endemic hunger in this resource-rich continent.
Enter Nigerian youth
Records from Nigeria’s National Population Commission (2001) indicate that youths under the age of 30 constitute over half of the approximately 150 million Nigerians. The unemployment rate in Nigeria is growing at the rate of 16% per year with the youth at the core of the problem. Unemployment is also higher in poorer Northern states, which have also been prone to instability.BudgIT founding partner, Oluseun Onigbinde has cited the recent death of several youths during a stampede that ensued during a government recruitment exercise in March in the capital Abuja, as an indication of the economic desperation that the youths in Nigeria suffer. For many of Nigeria’s young people living in poverty and seeking jobs, he posits, the rise of Nigeria to the top of Africa’s economic chain remains of little significance as they fight for a chance to survive and earn some income.Thus, a big financial push to support the various agriculture development programmes, such as the Growth Enhancement Scheme, the Staple Crops processing zones and the ATA itself, could help Nigeria prevent a potential time-bomb of 4 million youths entering the labour market each year.Noting the danger posed by high levels of youth unemployment in Africa and the opportunities in agriculture, African celebrities are also increasingly joining the Do Agric, It Pays bandwagon. What started off as calls by a few champions including D’banj, Yaya Touré and Juliani is now gaining momentum. Nineteen top African artists have just launched one of Africa’s biggest music video collaborations ever,Cocoa Na Chocolate,in Lagos to help rebrand agriculture among youths and said in a message to President Goodluck Jonathan that Africa will only win the war against poverty if Nigeria leads in investing in agriculture.
Following Nigeria's hosting of the WEF this month, these critical issues are bound to rise again, with both citizens and investors hungry for answers. Nigerian organisations that are now championing the Do Agric, It Pays campaign have put together a policy recommendations document, following the consultative forums held during the launch of the campaign. This document makes a plea to President Goodluck Jonathan to address the following key issues: the need to reverse the downward trend of Nigeria’s agriculture budget; enact investments in land reforms, markets, and infrastructure to benefit youth and smallholder farmers; provide youths with access to technology, finance and the skills needed in the emerging agriculture value chains; and ensure transparency within the budget.Ethiopia, Burkina Faso and Ghana are examples of countries that have all recorded impressive economic development and significant strides in the fight against poverty, as a direct result of similar reforms and higher public investment in agriculture. Next month, when African Heads of State converge once more in Malabo, Equatorial Guinea for the AU Summit, they will have a chance to review and revitalise the Maputo Declaration, and to make policy commitments for the next 10 years of African agriculture. African citizens and investors will want to see Nigeria take the leadership role to promote an enhanced CAADP framework desperately needed to unite Africa in ending the hunger games on the continent.