Agriculture as New Forex Goldmine: Policy shifts for economic transformation (2)

In the prequel to this publication titled ‘Agriculture as Nigeria’s New Forex Goldmine: Balancing Local Needs and Global Market Opportunities’, I established the general belief of stakeholders in Nigeria’s non-oil export sector that exporting agricultural produce will not exacerbate Nigeria’s food crisis. However, for both to concurrently thrive, certain policy shifts must come to light, influenced by not only the government as actors but also all other players across Nigeria’s agricultural and economic sectors.

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In this concluding part, referencing other countries, I reflect on the aforementioned challenges in Part 1 and offer answers that can serve as foundational blocks for Nigeria to balance food exportation to generate foreign exchange while not neglecting local consumption to ensure food sufficiency and security.

The Gambia has taken impressive and successful strides in modernising its agriculture, emphasising greenhouse agriculture, with 97% of its agricultural produce exported. Ghana’s deliberate approach to exporting agrarian products comes to mind, enabling the country to dominate the African yams market in North America.

Looking at the concept of “export production villages,” developed by the UN’s International Trade Centre, there is a live example of a Nigerian investor who established a large-scale pineapple export operation in Ghana. I believe Nigeria can learn from such examples and develop policies geared towards implementing export-oriented agricultural practices to boost agricultural exports. Nigeria has the potential to replicate these successes, but we must ensure that domestic food security is not neglected in our pursuit of export growth. As stated earlier, there is the danger of the boom-bust cycle in agriculture, where fluctuations in market demand can discourage farmers from continuing production. This volatility, driven by economic, environmental, and political factors, makes sustainability difficult to achieve, destabilising the agricultural sector.

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Current Government Policies Outlook: Current government policies are seen as insufficient to effectively support the agricultural sector, and sometimes, there is a lack of clear policy pathways.

Inconsistent policies should be corrected and aligned with the broader goals of promoting agricultural exports for foreign exchange. This may include re-evaluating policies such as zero import duty on food imports, which, while it may provide a temporary solution to food scarcity, might undermine export goals in the long run. The government can play a multifaceted role in Nigerian agriculture and can help transform Nigeria’s agricultural sector into a major contributor to food security and economic growth.

My suggested strategies and policies include:

• Prioritising Increased Domestic Agricultural Productivity: Policies should focus on increasing agricultural production to ensure food security and generate export surplus. This involves modernising farming practices, improving infrastructure, and supporting farmers. Farm mechanisation and providing a safe environment are essential steps that must be addressed immediately. We cannot continue with crude agricultural farming; modernisation is a must; otherwise, we will end up continuing to export raw agricultural products without value addition. This leads to a failure to capitalise on the significant benefits of entire value-chain exports and the resulting immense economic benefits in forex. Another real danger is that exporting agricultural commodities in their raw form is tantamount to exporting jobs!

The current trade deficit, where imports significantly outpace exports, highlights the urgency of this change.

• Developing and Investing in Value Chains:

Government should implement policies that encourage the development of value chains beyond just exporting raw agricultural products. This includes investing in agro-processing facilities, infrastructure, mechanisation, and educational initiatives to create jobs and increase the value of agricultural goods. Policies addressing the high costs and logistical challenges that currently hinder access to mechanisation for farmers will boost productivity. This would also ensure that Nigeria can capitalise on the economic benefits of full value chain exports and avoid dependence on imported processed goods, which invariably come at a higher price, thereby depleting our foreign reserves. One creative way of achieving this is for the government to develop incentives to attract serious businesses to invest heavily in farm equipment so that rental costs and easier access becomes a game-changer.

• Adhere to International Quality Standards:

Policies must emphasise the need for Nigerian agricultural products to meet international quality standards to enhance their export potential. This involves educational initiatives for farmers and exporters to improve their storage and preservation methods and ensure the exported goods are disease-resistant and arrive in premium condition. Through the Federal Ministries of Agriculture and Industry, Trade and Investment, the government must seek collaboration with established organisations such as NICERT to develop a Traceability System that will help establish national standards that meet international market expectations.

• Diversify Export Markets: Government should implement policies supporting export market diversification beyond crude oil to improve Nigeria’s balance of trade and address foreign exchange issues. This calls for more efficient (including ease and transparency) incentive baskets to support local and export production.

• Implement Targeted Educational Programmes:

Policies should include targeted educational programs and initiatives to attract youth to farming and ensure the agricultural profession is more attractive and sustainable. A bottom-up approach based on the type of collaboration suggested above will do the magic.

• Embrace and Support Cluster Farming:

The government should promote cluster farming through policies that enable farmers to pool resources, share infrastructure, and access better storage facilities. This approach can help stabilise food prices and improve the agricultural sector’s efficiency.

• Provide Government Support and Investment:

Policies should ensure that the government provides adequate support and investment in agriculture, focusing on small-scale farmers and agro-processing facilities. This support should include the necessary infrastructure, security, and resources to allow farmers to operate effectively.

Local Governments should also be empowered to drive agricultural development at the grassroots level. Investment in educational initiatives that show farmers how to preserve their produce and make them disease resistant, thereby increasing the quality and longevity needed to ensure the exported goods get to their desired destinations in their premium state. Rejection of our exported produce products is an ongoing issue Nigerian exporters face. Thankfully, the Federal Ministry of Industry, Trade, and Investment, under the present leadership of Dr. Jumoke Oduwole, appears to have already set out along these lines, starting with the serious attention to reverse the rejection of Nigeria’s Sesame seeds by Japan.

At a recent engagement with officials of the Central Bank of Nigeria, the point was made that not many players know the policies, support programmes, and incentives the government has already provided. Deliberate efforts must be made to enhance awareness, else, these efforts will yield no results.

• Avoid Boom-Bust Cycles: Policies should ensure that domestic food security is not neglected in the pursuit of export growth and address market volatility. This requires creating mechanisms to provide stability and encourage continuous agricultural production. The government may need to consider setting up a system of purchasing (and storing agricultural commodities in bulk, always leading to the emergence of a guaranteed market for farm produce.

• Revive and Build on Past Initiatives: The government should revive past successful agricultural initiatives, such as the Green Revolution and Operation Feed the Nation, while advocating for a renewed focus on increasing agricultural production and exports. Additionally, and notably, the Agricultural Transformation Agenda (ATA), developed by the former Agriculture Minister and current African Development Bank (AfDB) President Dr Akinwumi Adesina, is a way forward as a step in the right direction and a comprehensive strategy that can guide a renewed focus and drive a significant increase in agricultural products and its exports.

• Mindset Change: There is no doubt a need to adjust the nation’s mindset regarding how we view agriculture as a “less than” profession. We must move beyond the simplistic view of farming as a source of small business income and ensure that the agricultural profession is made more attractive and sustainable, especially with targeted educational programs and initiatives to encourage youth engagement in farming.

• Address Security Issues: Government needs to ensure the safety and security of farmers so that they have access to their farms without the need to pay security fees or risk being kidnapped. Security concerns among farmers are probably the most urgent issue that needs to be addressed if the agricultural sector is going to make headway toward feeding the nation and accessing global market opportunities for the much-needed forex.

Nigeria can balance food security with enhanced agricultural export growth by adopting a multifaceted approach that includes increased investment in agricultureal modernisation and mechanisation, addressing challenges faced by farmers, implementing strategic policies, and learning from the successes of other countries. This will require both a top-down approach from the government and a bottom-up approach from farmers and other stakeholders in the agricultural sector.

In the not-too-distant future, agriculture can become Nigeria’s new forex goldmine as we rev up internal food production, increase food security, and enhance domestic agricultural productivity. Nigeria can become Africa’s new food basket. It is not impossible!

Olufemi Boyede, CITP [email protected]