Tuesday, September 20, 2011

Fixing Nigeria’s Agriculture, by Nasir El-Rufai

16 September 2011

Written by Nasir el Rufai    

Last week, we discussed unemployment in Nigeria, asking where the jobs are. In the coming weeks, this column will explore answers to that question by focusing on the real sector, beginning with agriculture. On the differing unemployment rates mentioned last week, we erroneously swapped the numbers. At their Senate confirmation hearings, it was Segun Aganga who mentioned about 20% while Ngozi Okonjo-Iweala stated  that the unemployment rate was 14-16%. The senators did not question either figure. We apologize for the mix-up, but it shows the contradictions in ministerial statistics!

Back to agriculture. Israel, a mostly desert country with only about 17,000 farmers produces a wide variety of food and cash crops. The country’s agricultural output is valued at over $2 billion, of which 70% is exported. Nigeria, on the other hand, has about 50 million people involved agriculture, with abundant arable land and water resources, yet last year spent  over $4.2 billion to import food - N635 billion to import wheat; N356 billion on rice, N217 billion on sugar and N97 billion on fish – commodities we should be exporting.

In the 1960s, agriculture contributed over 60% of our Gross Domestic Product (GDP). Nigeria was the world’s second largest producer of cocoa with 15% of the world market, largest exporter of palm oil with 60% market share, and leading exporter of groundnuts with 30% of the world market. We also held dominant positions in the markets for cotton, rubber, hides and skins.  Although the farmers relied on rudimentary, traditional tools and methods, the sector accounted for about 70% of Nigeria’s exports, and about 95% of our domestic food consumption.

The oil boom of the 1970s spelt a doom for agriculture in two ways - the overvaluation of the naira made our exports less competitive, and imports cheaper - a trend that has continued till date. From domestic self-sufficiency and leading exporter in 1960s, by 1982, we imported about 153,000 metric tons of palm oil at a cost of $92 million and 55,000 metric tons of cotton worth $92 million.... Read on...

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