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Nigeria’s agric: When foreigners dominate

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The recent pronouncement by the Federal Government that Nigeria’s agriculture is dominated by foreigners has sent jittery to the spines of local stakeholders. Taiwo Hassan reports

 

 

In the beginning
Several decades ago, sustenance farming contributed majorly to Nigeria’s agric sector – enhancing the nation’s food sufficiency.
But unfortunately, the sector remained dormant basically because of the inability of the past governments to prioritise agric – relying on oil, which is susceptible to the vagaries of forces of demand and supply – raising concerns for the fate of the economy.
Basically, the headwinds in the sector prompted slow development and stunted growth as many people who had been into agriculture neglected it in search of greener pasture and other white collar jobs in the country.

However, the reason for this change in paradigm was not farfetched due to the fact that farming faced low patronage and neglect, which consequently affected its contribution to the country’s Gross Domestic Product (GDP).
Ideally, one of the major reasons responsible for the neglect of this sector was the surge in the oil price at the international market as past governments raked more revenue from the sale of the product to the detriment of agriculture, which was once a cash cow for Nigeria.

Shift to agric

However, in order to re-jig the sector positively, succour came during the regime of former President, Goodluck Ebele Jonathan when he appointed Dr Akinwumi Adesina, as agric minister in order to bring back the lost glory, which had stifled the growth of the sector.
Under Adesina, who is currently the President of African Development Bank (AfDB), Nigeria’s agric sector witnessed transformation following different policies that were unleashed to galvanise desirable the sector.

As part of plans to attract investments into the sector, the Federal Government and the state governments intensified Foreign Direct Investment (FDI) campaign to revamp the sector. The belief was that if foreign investors key into the Nigeria’s agriculture, it would spur rapid development and put Nigeria on the global economy as a food producing nation.

Foreign dominance

However, still basking in the euphoria of exiting recession, Nigeria’s agric sector was hit with the news of foreigner dominance.
The Federal Government said that it had discovered that more foreigners were doing businesses in the agricultural sector. It said this could be traceable likely to the high interest rates banks demand from local agriculture entrepreneurs.
Minister of State for Agriculture and Rural Development, Heineken Lokpobiri, was quoted as saying that low access to finance was a major challenge impeding the development of the agricultural sector in the country.

“The major challenge bedeviling this industry is access to finance. Agricultural financing in Nigeria is too costly; for even at nine per cent you can’t find it. They will ask you for all forms of collateral, the CBN will say bring your father’s house, bring this, bring that,” he said.
“And that is why if you look at it now, foreigners are taking over the agro sector here; either from India, they get it (loan) at three or four per cent, or from Europe at two or three per cent. But here, it is 30 per cent and they (banks) are not even willing to give. The only way you can compete with others is for you to have cheap funds that will reduce your production costs.”
Lokpobiri said that Nigeria had over the years had allowed the banking sector hold the country hostage with high interest rates.
Particularly, he was quoted to have stated that it was for this reason the government often borrowed less from the domestic market.

Compromise theory

Corroborating Lokpobiri’s stance, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said that the present administration was against FDI, since this is the way other countries in the world attract investment into their mainstream economy but Nigeria’s agric industry is already compromised in its entirety.
According to him, with the current scenario in the country’s agriculture, it would be difficult for any local investor succeed since the FDI has been tailored to favour foreigners.
His words: “The way it is, we welcome foreign direct investment. Every developing country does that. It is a welcome development for a country that wants to grow and grow speedily. But it has other complexities, which are not always visible and noticeable to observers.
“Of course, when they want to come in, they ask for tax holidays, which countries are willing to give. But how about dangers they face in local economy in the long run? Take the problem we face now, that is nearly impossible for any Nigerian investor to have access to substantial credit to make any major investment, say in the agro-industrial sector where we operate now,” Ogbeh added.

High interest rates regime

Factually, Ogbeh’s grouse may be attributed to the high interest rate in securing agric loans at the banks, which is scaring many farmers from approaching the banks for loans.
Besides, findings also show that many of the banks are reluctant to give loans to farmers in the country. Basically, Nigerian banks are not willing to support long-term agric loans since they want to quickly recoup their facilities.

Ogbeh said: “At interest rates of between 25 and 32 per cent, what – on God’s green earth – can you do? You can’t do much. But these foreigners can borrow at two per cent, bringing a hundred or two hundred million dollars to invest. Of course, they will create some jobs but essentially low level jobs – for outgrowers and others. In a sense, they are jobs. But the way we are heading, what it means is that if these interest rates persist for much longer, the only people who will dominate agro-industry, and indeed major industrialisation, in this country are foreigners.

He continued: “Is that necessarily a good thing? It’s good in some ways. But if they take absolute control, then we are in danger. This is the complexity. And I keep complaining, for instance, about the interest rates, although many people don’t seem to agree with me. Where in the world have interest rates remained at over 25 per cent for 30 years and that country still claims the economy is growing? How does it grow? Or how does it develop its industries? Where in the world is the MSME industry flourishing when it is impossible to access credit? So, young people are reluctant. Retiring civil servants who want to create something can’t do anything. Those within the productive bracket who want to create and do things can’t do anything. We are facing a problem, and something has to be done very quickly about the entire interest rate regime.”

Govt’s political will

Speaking on agric sector’s support, the minister said: “The costs of production, processing, and export make us uncompetitive outside, in the international markets. If you’re going to set up a food processing outfit, all your machinery must be of food-grade stainless steel. And food-grade stainless steel is always very expensive.

“You don’t make them here in Nigeria; you import them. You pay the duties. You install them. Then you go for your standby generators and you pay local taxes of all kinds, such as local government tax, corporate tax, and so on. By the time you add these to your production cost; you can’t compete with the man in China or Brazil.

“If you go into the world market, you would hear them saying no! We are getting it cheaper from other people. On the other hand, you know what happened in India. If you build a brand new factory, and they commission it for you, the Indian government writes you a cheque of 35 per cent to help you stabilise your business, knowing that they will recover their money eventually from tax. That is the kind of support they give. We need to have such a scheme here.”

Dangers of FDI

On what the country is likely to face with the continued opening of its economy to FDI influx, the minister said: “Leaving everything to only foreign direct investments is also not safe because they come with certain strings, which are not always very easy. They will have to repatriate their profits. The other issue is, if agriculture doesn’t grow as fast as it should and agro-industrial exports and raw materials don’t happen as quickly as they should, when the oil and gas era is gone, what will be our source of foreign exchange? Again, that is something we need to deal with. And it’s all very complicated.”

Last line

With the Federal Government’s stance on foreign domination of the country’s agric sector, there are fears that the nation’s quest to attract foreign direct investments into the sector are being threatened and compromised.

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Agric

Dogara’s wife assists 7, 000 women farmers in Bauchi

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As part of efforts to encourage women farmers, the wife of the Speaker House of Representatives Mrs Gimbiya Yakubu Dogara has distributed farms seeding to seven thousand women farmers in Bauchi state‎.

‎Mrs. Dogara represented by the Coordinator of the Sun Of Hope Foundation Mrs Darambi Kefas explained that the organization had supported 3, 500 women farmers in the constituency last year to cultivate rice which became so scarce for some time now saying 3, 500 youths were included in this year to cultivate maize with a view to eradicating hunger in the society.

‎She said three thousand five hundred (3, 500) women farmers were provided with rice seeds and additional three thousand five hundred (3500) women with maize seeds saying were donated free of charge by her pet project ‘Sun Of Hope Foundation’.

The women beneficiaries were drawn from Bogoro, Tafawa Balewa and Dass Federal constituency of Bauchi State where the speaker represents.

She noted that the new beneficiaries are being selected yearly from all wards in the three local government in order to carry all constituents along.

Mrs Dogara stated that the foundation intervenes in the areas of agriculture, health, education and children’s welfare said they recently donated medical equipment and consumables to Virginal Vestibular Fistula (VVF) centres in Ningi, Bauchi State, Akwa Ibom and Hajiya Gambo Sawaba VVF centre, Zaria.

” The foundation had in the recent time sponsored free ante natals to pregnant women in Dass local government and offers free medical outreach at the annual ‘Limzaar’ festival in Tafawa Balewa local government”, She said.

Responding on behalf of other beneficiaries, Esther Bitrus expressed appreciation to the Speaker’s wife for the gesture promising that they would make good use of the seeds.

Meanwhile, Mrs Dogara also donated two bags of rice, one bag of maize and baby kits and wares to mother of triplets Mrs Rachael Gabriel at Lafiyan Sara village in the local government.

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New agric laws: How far can NASS go?

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Just recently, Speaker of the House of Representatives, Yakubu Dogara, called for the enactment of new legislation that can foster, guide and revolutionise agricultural activities in the country. TAIWO HASSAN juxtaposes this move with the realities on ground

 

 

Overview of Nigerian agric sector

Indeed, since the nation’s independence in 1960, agriculture had been the mainstay of Nigeria’s economy, providing the largest chunk of foreign exchange inflow into the country. Moreover, it contributed about 63 per cent to the country’s Gross Domestic Product (GDP), according to official statistics from the National Bureau of Statistic (NBS).

The incomes as at then were derived from the export of major cash crops such as rubber, cocoa, palm oil, cashew nuts, groundnut and cotton, among others. Notwithstanding the low prices that agricultural products suffered at that time, the sector remained resolute by continually sustaining the country’s economy. Indeed, the sector was the largest employer of labour in the country then.

However, on assuming office as the Head of State in 2015, President Muhammadu Buhari pledged to introduce diversification programme where agriculture, solid minerals and manufacturing sectors were identified to stabilize the moribund economy.

Particularly, the government floated the various economic policies including the Economic Recovery and Growth Plan (ERGP), in order to stem the steady decline in the country’s economic fortunes.

For agriculture, the present administration launched the Green Alternative: Agriculture Promotion Policy (2016-2020) as a roadmap towards the revival of country’s agricultural sector.

According to the government, it is a comprehensive plan and a well thought-out strategy -to meaningfully and systematically address the myriad of challenges militating against the growth of the agricultural sector, with a view to providing innovative solutions for reviving and repositioning the sector for accelerated national development.

However, the agric policy of the government became the toast of some eminent industrialists, commercial farmers, foreign/ local investors and agro-allied industries as they ventured into different aspects of farming in order to provide food sufficiency and security for Nigerian populace.

Nigerian agricultural policy

Indeed, Nigeria has a robust agricultural policy set out in the Nigerian Agricultural Policy 2000, which provides the framework for the implementation of programmes and guidelines for agricultural development. The overreaching objectives of the Policy are:

The achievement of self-sufficiency in basic food supply and attainment of food security, increased production of agricultural raw materials for industries, eradication of poverty, development of the rural economy, and protection of environment.

This is expected to be achieved through the: Creation of a conducive macro-environment to stimulate private sector investment in agriculture, rationalisation of the roles of the three tiers of government in their promotional and supportive activities to stimulate growth, articulation and implementation of integrated rural development as a priority, National programme to raise the quality of life for rural people, increased agricultural production through increased budgetary allocation and promotion of the necessary developmental, supportive and serviceoriented activities, increasing fiscal incentives and promotion of increased use of agricultural machinery and inputs through a favourable tariff regime.

The policy is successfully implemented in areas of food crops such as maize, beans, sorghum, yam, millet, cassava, pineapple, and oranges.

However, the policy is less successful and greater investment will be required in areas of cash crops such as oil palm, cocoa, rubber, groundnut, cotton, cashew and sugar cane, and food crops such as potato, rice, wheat and fruit crops. House of Reps’ new agricultural laws However, having realized that the country had ots of agricultural laws that are no longer relevant and obsolete, the House of Reps called for the enactment of new laws that will take the agricultural sector to new highs while turning it into a major foreign exchange earner for the country in the nearest future.

The Speaker of House of Representatives, Yakubu Dogara while speaking at a two-day public hearing organised by the House Committee on Agricultural Colleges and Institutions in Abuja, recently affirmed that it was time for legislating new agricultural laws for the country.

He said that there was need to ensure bills processed by the legislature were cost-sensitive and did not increase the financial burden of the nation through the multiplication of agencies.

The proliferation of agencies, according to him, is not conducive to the economic well-being of the nation as a new agency “comes with its complement of bureaucracy.”

Instead, he advocated for the amendment of the functions and mandate of existing agencies, where possible. Dogara added: “Furthermore, in cases where there is need to reinvigorate a particular sector and lay emphasis, it may become necessary to carve out an agency from an existing one.”

He reiterated that the agricultural sector requires up-to-date legislation for continuous growth and development. He said, “It is very gratifying to note that giant strides are being made in the sector.

“Up-to-date legislation is required to aid the drive to modernize agricultural practices, drive economic diversification, achieve food self-sufficiency, and ultimately turn agriculture into a major foreign exchange earner in the nearest future.”

New agric bills

The bills being considered by the committee include a Bill for an Act to Regulate the Profession of Agriculture and to make provision for the Establishment, Functions and Administration of Nigerian Institute of Agriculturists, and for Other Related Matters. (HB.838). Also under consideration, is a Bill for the Act to Repeal the Veterinary Surgeons Act. Cap. V3, Laws of the Federation of Nigeria, 2004 and for Other Related Matters (HB. 836). In his remarks, the Speaker urged the committee to ensure the bills were in accordance with legal, regulatorky and economic goals set out for the agricultural sector through appropriate scrutiny.

Last line

Agricultural experts, under the All Farmers Association of Nigeria (AFAN), are however, pessimism about the lawmakers’ stance to promulgate new agricultural laws given the lifespan of the current administration, saying the bills could be waste of national resources.

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Food Security: NYC tasks FG, private sector on organic farming

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Nigeria Youth Congress (NYC) has called on Federal Government and those in private sector to embrace technology-based organic farming, in order to guarantee Nigeria’s food security and create more employment opportunities for the teeming unemployed youths.

The Congress made this known in Abuja while honouring the Chairman and Founder, CONTEC Global, Dr. Benoy Berry, as ‘Champion of Youth Empowerment’. This stemmed from his bold investment in organic farming through the deployment of science and ICT across the six geopolitical zones of the country.

President of NYC, Dr. Yakubu Shendam, urged both federal and state governments and the private sector, to team up with the company in its drive to return Nigeria to food security through organic farming using latest biological solutions and cutting-edge technology.

While applauding the advocate of Nigeria’s organic farming for empowering Nigerian youths through setting up the AfriOne smart handset with various applications in Africa, Shendam said the NYC would take the campaign for organic farming across the nooks and crannies of Nigeria to stimulate youths’ interest in organic farming. “We are interested in keying into this agriculture revolution, I call on governments and other stakeholders to key in as this is the only way that we can create jobs for our youths as the company is helping to develop our agriculture.

“We are surprised to know that there are tissue culture and organic facilities here in Abuja that can eliminate carcinogenic properties from crops thereby reducing the health challenges associated with imported chemical fertilizers.

Besides, he said : “While some businessmen are busy importing fake chemicals from abroad, here you have the remedy through organic fertilizer to keep our health in sound condition.

If you will continue to do this our country and Africa will be safe and there will be enough food for everyone. We, therefore, bestow on you the ‘Champion of Youth Empowerment.’

“We salute you and we are happy with what you are doing concerning agriculture because this is in consonance with President Muhammadu Buhari, is advocating for in agriculture, using it to diversify the economy and employing the youths because as we cannot continue to rely and depend on oil alone for foreign exchange as agriculture is the key,” he added.

In his response, Dr. Berry acceded to the request by the NYC to host Nigeria’s first youth summit on use of technology and modern farming methods to drive food security as done in China and India as soon as possible.

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