At the New World Nigeria investment conference, Nigerian minister of agriculture and rural development, Akinwumi Adesina, and the governor of the Central Bank of Nigeria, Lamido Sanusi, made clear their resolve to rebuild a vibrant agricultural sector
Farming is central to Nigeria’s economy, accounting for 40 per cent of GDP and providing 60 per cent of employment. Agriculture is also a major source of employment growth and between 2001 and 2007 alone, it accounted for 51 per cent of job creation in Nigeria.
Since the 1960s and the discovery of oil in Nigeria, however, the country has lost a dominant position in the export of key crops such as cocoa, groundnuts, ground nut oil and palm oil.
In the 1960s, Nigeria accounted for more than 60 per cent of global palm oil exports, 30 per cent of global ground nut exports, between 20 per cent and 30 per cent of global ground nut oil exports, and 15 per cent of global cocoa exports. By the 2000s, Nigeria’s global share of exports of each of these crops had fallen to less than five per cent.
Today, Nigeria is a net importer of agricultural produce, with the value of its food imports totalling US$4.2bn and rising. Large food products imports include wheat (US$1.1bn), fish (US$700mn), rice (US$500mn), and sugar (US$400mn). Nigeria has a total food import bill of US$4.2bn annually.
Nigeria’s agriculture sector still holds enormous potential, with an opportunity to grow output by 160 per cent, from US$99bn in 2012 to US$256bn by 2030. This growth potential comes from increasing yields to 80-100 per cent of benchmark countries; increase acreage by 14mn ha new agricultural land, which is approximately 38 per cent of Nigeria’s unused arable land of 36.9mn ha; and shift 20 per cent of production to higher value crops.
Nigeria faces a large and growing global agricultural market – rising commodity prices, growing demand for food, and opportunities in bio-fuel all present significant challenges and opportunities for Nigeria. For example, global cereal demand will grow by between 31 per cent and 150 per cent by 2050 depending on the region, while global commodity prices are currently in their second major spike in three years.
Just how this can be addressed was the focus of two important presentations made to the three-day New World Nigeria investment conference, which was sponsored by Bank of Industry and the Nigeria Olympic Committee.
Organised by Brand Communications at London’s Dorchester Hotel, a high-level delegation of federal government ministers and state governors examined practically every facet of Nigeria’s economy. The minister of agriculture and rural development, Akinwumi Adesina, and the governor of the Central Bank of Nigeria, Lamido Sanusi, addressed the latest initiatives to kick-start agricultural development.
Adesina declared that the federal government had very clear targets. By 2015, he told delegates, the Agricultural Transformation Initiative planned to create 3.5mn jobs within agricultural value chains; ensure US$2bn of additional income was in the hands of Nigerian farmers; add US$2bn to the economy from rice self sufficiency; and see to it that US$380mn had been injected into the economy from the partial substitution of cassava flour for wheat flour in bread, confectioneries and other produce.
Nigeria is currently the world’s biggest importer of US hard red and white winter wheat and, worldwide, the biggest importer of rice.
Perhaps the most notable aspect of the minister’s presentation, however, was that of the proposed 20mn metric tonnes of Nigerian-grown food the government has been seeking to add to the domestic market — including one million tonnes of sorghum and two million tonnes of rice — it envisages no less than 17mn metric tonnes of cassava can be grown throughout the country.
This focus on cassava is already having a huge impact. While Nigeria is still a net food importer, it has developed a huge export market for the crop and has added value by manufacturing cassava chips that it is exporting to China. Nigeria has already won a two-year, 1.1mn ton annual cassava chip export contract from China, earning more than US$136mn annually.
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