Nigeria News

Agriculture to the Rescue as Crude Oil’s Economic Relevance Fades Rapidly

 Crusoe Osagie writes that the foresight of President Jonathan and the Minister of Agriculture, Adesina, in the introduction of the agricultural import substitution initiative, almost five years ago, captured as the Agricultural Transformation Agenda (ATA), may well become the life line of the economy as hopes that the price of the nation’s essential hydrocarbon resources will recover quickly, dims

Suddenly, crude oil, a commodity whose price was almost permanently pegged at over $100 per barrel, saw its value tumbling. At the moment, the famous black gold, upon which the Nigerian economy has relied for its survival for the past 40 years has its price hovering precariously just above $40 a barrel, sending pundits into a panic over the survival of Africa’s largest economy.
For decades, Nigeria and its economy has been living dangerously. The most populated nation in Africa literarily depended on other nations of the world for the supply of nearly all its essential commodities. Name it, kerosene, premium motor spirit also called petrol, diesel, rice, cowpea (beans), fish, poultry,vegetable oil, pharmaceuticals, cars, furniture, the list is endless.
Nigeria simply drilled crude oil, sold it, earned foreign exchange, moved the forex to the international market and purchased all the commodities it needed to survive, even the ones for which it had comparative and competitive advantage. The vicious cycle continued unabated as there was no real commitment from government actors to turn the tide until the present administration of President Goodluck Jonathan took the stage in earnest.

Once he won the election in 2011, one of the first step Jonathan took was to convene a think-tank and hold an economic retreat where the blueprint with which to drive the economy was drawn with a primary focus on import substitution.
After the decision was taken by the president to end the importation of products for which Nigeria had the capacity to produce, what followed was the appointment of highly skilled human capital to manage the segments of the economy expected to take charge of the effective implementation of the import substitution policy and this was how highly skilled individuals like Olusegun Aganga and Akinwumi Adesina were wooed from their blossoming global careers with multinationals to bring the president’s vision of import substitution and foreign exchange conservation to bear.

A few years since these individuals took charge of the Federal Ministries of Industry and Agriculture, giant steps have been taken to end the mass importation of some of the essential commodities mentioned above much to the salvation of the Nigerian economy which has recently fallen on terrible times due to plummeting crude oil price and the free fall of the Naira against other major currencies around the world.
For Adesina and the agricultural sector he was charges to carter for, the situation was particularly grim, with the country spending over a billion Naira daily to import rice, almost N200 billion annually for fish importation and nearly N700 billion every year to import wheat, just to mention a few.
How terrible would the situation have been, if Adesina did not stamp his feet to ensure the gradual actualisation of the vision of the president about four years ago, considering the present situation of a devalued currency occasioned largely by the fall of crude oil prices.
Today, the volume of rice imported into Nigeria has been reduced by almost 50 per cent, wheat importation has come down with the implementation of the policy which mandates the inclusion of 10 per cent cassava flour to wheat flour, for the production of bread and other confectioneries, a technology that has been perfected by the likes of Golden Penny flour mills, Dangote and several others.
Now, the good news is that even though the economy is facing hard times, the foresight of president Jonathan and the doggedness of implementation of Adesina, has prevented the crisis from hitting Nigeria in its pure form. Like the biblical story of Noah, Jonathan and Adesina built an Ark of a rising local agricultural economy, which may well become the major means of escape for the country in the face of the current economic imbroglio.

Speaking recently at an agricultural show tagged Agrifest in Abuja, Jonathan affirmed the excellent performance in the Agricultural sector.
Adesina, who also spoke at the forum disclosed that the reforms in the agricultural sector by the Jonathan administration had attracted over $5.6 billion in foreign investment into the country, stressing that this was a verifiable outcome of the growth that has come to the strategic sector in the last 5 years.
Jonathan said since agriculture was paying off so well in America, he saw no reason why Nigerian farmers should not be millionaires and even billionaires, saying the goal of his administration was to make Nigerian farmers that wealthy.
To this end, he said 750,000 young commercial farmers were being created, with the philosophy being to catch the youth early and change their mindset towards agriculture.
“Agriculture is now the life-line for Nigeria,” he told farmers from around the country gathered at the Eagle Square for the event.
“As crude oil prices decline, we must create new wealth from the richness of our soil, the vastness of our rivers and the abundance of our labour. We will produce more and industrialise the agricultural sector. That is our total commitment. One area we can say we are doing very well is agriculture.

“Great farmers of Nigeria, you can rely on me as a farmers’ President. Even in my campaigns yesterday, I mentioned it in Benue, that Nigerians should reach out to you, farmers, and if you are not happy with me, they should not even vote for me.”
He expressed gratitude to farmers, saying were it not for their efforts that have made all manner of foodstuffs readily available and prices stable, there could have been food riots by now.
The President said: “Nigerian rice is now competing favourably with foreign rice and Nigerians now prefer our own rice because of the nutritional value. I eat Nigerian rice. I can tell you it is better and more nutritious. That is the only rice we prepare in the State House. Nigeria will not be held hostage by rice importers. There will be no sacred cows under my watch.”
He then directed that all those “owing Nigeria” on rice import duties must pay up, noting that Nigeria was now producing more food than ever before.
He stated that Nigeria’s national food production expanded by 21 metric tonnes in the last three years while food import bill declined from N1.1 trillion in 2009 to N634 billion by 2013.
When the 2014 figures are out, he believes the amount will further drop.
Jonathan also disclosed how he ended 40 years of corruption that made it impossible for farmers to get fertiliser at government-subsidised rate through the deployment of the now-popular e-wallet. He said over 14.5 million farmers have been “raised” through this G.E.S. system.

Heralding moves to resuscitate the textile and garment industry, Jonathan said: “We are turning cotton into wild gold for farmers. 22 cotton ginneries have been revived.”
He stated that soft loans of various types were being given to farmers to aid them in boosting food production, and expressed the hope that very soon, Nigeria would be a net exporter of food.
The president also disclosed that 5,500 hectares of fully- mechanised farms were in 22 states of the federation, and that cassava was being used in a variety of ways including adding 10 per cent to bread-baking.

Adeshina attributed the over $5.6 billion foreign investment attracted into the economy by agriculture to a strong political will to tackle the underhand corruption associated with the distribution of seedlings and fertiliser to rural farmers across the country.
So, while many are seriously perturbed by the dwindling price of crude and the ensuing economic challenge, some analyst are excited because, according to the saying that necessity engenders invention, with the easy petrodollar out of the way, local governments chairmen, state governors and of course the federal government must either swim or sink. Good enough, Jonathan and Adesina, while the going was still good, already began to learn how to navigate in a turbulent economic environment devoid of cheap oil money and if they effectively put all they have initiated in the last 5 years to good use, the nation certainly will emerge from the current challenge with a more sustainable economy.

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