ANALYSIS: Buhari advises African leaders on agric financing. Is he leading by example?

On 25 January, President Muhammadu Buhari urged African leaders to allocate 10 per cent of their national budgets to the agricultural sector in order to promote food security.

Mr Buhari also called on his counterparts to embrace innovative policies that ensure citizens eat what they produce and export the surplus.

He noted that feeding Africa is imperative and leaders must ensure that the people’s welfare remains a priority.

‘‘To succeed, we must strongly support farmers. There is no doubt that we need to subsidise our farmers, but we must do so in transparent ways, remove rent-seeking behaviour and effectively deliver support to farmers,” Mr Buhari said in his goodwill message to the Feed Africa Summit of heads of state and government.

‘‘The share of budget allocation to agriculture should be increased across Africa, especially for investments in critical public goods, such as research and development, infrastructure, especially roads, irrigation, and energy.

“As leaders, let us decisively ensure that we meet the 10 per cent allocation of our budgets to agriculture as agreed in the Malabo Declaration of the African Heads of State and Government. We must reduce the rate of rural to urban migration through the development of rural areas.”

Mr Buhari gave this advice despite the failure of his government to improve funding for the Nigerian agricultural sector in line with the Maputo agreement in the last seven years.

Maputo Declaration

The Maputo Declaration was an agreement struck during the second ordinary assembly of the African Union in July 2003 in Maputo, Mozambique, when African heads of state and government met to discuss food security and the development of the agriculture value chain on the continent.

Nigeria signed the agreement the next year.

In the declaration, the African Union (AU) made several important decisions regarding agriculture, but the most crucial among them was the commitment of the leaders to allocate at least 10 per cent of their countries’ annual national budgets to agriculture towards improving the growth of agricultural output by at least six per cent annually.

However, nearly two decades after the agreement was struck, Nigeria has failed to abide by the declaration.

Over the years, agriculture has remained a key driver for Nigeria’s economy after crude oil. The sector contributes significantly to the country’s development. In the fourth quarter of 2021, agriculture contributed 24.17 per cent to the nominal gross domestic product (GDP).

Although Nigeria has introduced a number of agricultural revival and poverty alleviation policies, it has consistently underfunded the sector, leaving the country at risk of food insufficiency and slow economic growth.

In 2020, PREMIUM TIMES reported how different administrations in Nigeria failed to invest substantially in the sector.

Available data reviewed by this newspaper showed that agriculture has grown at the weakest rate under Mr Buhari’s administration than any other government since the return of democracy in 1999 while the sector received its best financing in 2008 and 2009 during the Umaru Yar’adua administration.

In 2008, Mr Yar’Adua’s government budgeted N2.92 billion for agriculture, which was 5.41 per cent of the total budget, and in 2009, it budgeted N3.101 billion, which was 5.38 per cent of the total budget. In percentage terms, those allocations are the highest by any government to date.

Ironically, despite the current administration budgeting poorly for agriculture, the country has recorded its highest annual budget spending in history under Mr Buhari.

Under the administration, budgetary allocation for agriculture rose from 1.70 per cent in 2017 to 2.00 per cent in 2018, fell to 1.56 per cent in 2019, and 1.34 per cent in 2020, before recording a slight increase (1.37 per cent) in 2021.

In 2022, allocation to the sector represented just 1.8 per cent of the budget, the highest in four years.

According to the National Bureau of Statistics, credit to the agricultural sector was 3.26 per cent and 3.36 per cent of total credit to the private sector in 2016 and 2017, respectively.

When compared to the banking sector’s credit to other industries, the agricultural sector received the lowest credit allocation from banks despite the sector’s contribution to the GDP more than other industries, according to a PricewaterhouseCoopers (PWC) report.

Presidential spokesperson, Garba Sheu, could not be reached to comment on this report.

Experts Speak

Speaking with PREMIUM TIMES, a senior economist with SPM Professionals, Paul Alaje, said the president’s advice must be put into an actionable plan here in Nigeria before it could be taken seriously by other African leaders.

“President Buhari and his advice to the African leaders regarding allocating 10 per cent of their budget to agriculture is a laudable one. But people say charity begins at home.

“Talk is cheap, the ability to fulfil your promise is what matters. He is coming from a country where 70 per cent of budgetary allocation goes to recurrent expenditure.

“In fact, a significant proportion of that 70 per cent is on debt service alone. President Buhari and his cabinet should understand how the economy should work. But unfortunately, I think what he is missing is the ability and understanding to make the economy really work,” he said.

Mr Alaje said Nigerians are still suffering from food inflation and its impact on livelihood has been significant.

“What we still see is scarcity and high food inflation within the country. In the real sense, it is a commendable thing to have 10 per cent of budgetary allocation to agriculture and to have a planned agriculture sector but unfortunately, as we know in Nigeria, we still have huge issues around the agric sector,” he said.

On his part, an agricultural communication expert, Obinna Chukwuezie, said although Nigeria ratified the Maputo protocol in 2004, it has done very little to ensure compliance.

“Sadly, Buhari in his eight years did not allocate anything close to 10 per cent to agriculture. How can he be asking others to comply with a protocol that he is not complying with? Sad. It is sheer hypocrisy,” he said.