Black Affairs, Africa and Development
Olusegun Obasanjo: In Nigeria, agriculture is the new oil
When Nigeria announced recently that it had become Africa’s biggest economy, you could be forgiven for thinking that oil was the only reason. After all, Nigeria is the biggest oil producer in Africa. What many people didn’t realise was the growing role of agriculture in boosting Nigeria’s economy – and the lives of its large rural population.
I’ve seen close-up how hard it can be to succeed in agriculture – not only when I was president but also during the 35 years that I have been a farmer myself. So I’m proud that Nigeria is emerging as a leader in agricultural transformation in Africa, thanks to the Agricultural Transformation Agenda (ATA), a bold set of reforms adopted in 2011.
Given the level of ambition that the agenda demands, Nigeria needs to spend much more on agriculture than its current commitment of only 1.6% of the national budget. But the ATA is already proving its potential to produce a dramatic turnaround that sets an example for other African countries, as we show in the Africa Progress Report 2014, Grain, Fish, Money – Financing Africa’s Green and Blue Revolutions.
The ATA aims to put an end to Nigeria’s “agriculture paradox”. Nigeria was able to feed itself in the 1960s. But then oil was discovered. The country began to depend on oil to drive growth and development. Yet Nigeria has abundant resources – 84m ha of arable land, two of Africa’s largest rivers and a large, youthful workforce.
The ATA aims to unlock that potential, aiming to boost food production by 20m tonnes, create 3.5m jobs in agriculture and food-related industries, and make Nigeria self-sufficient in rice by 2015.
The four pillars identified to achieve these goals illustrate what agriculture needs not just in Nigeria but across the continent: better infrastructure to improve market access; income insurance for weather-related crop failure; a privately managed fertiliser subsidy scheme for poor farmers; and an increase in import tariffs to promote self-reliance through import substitution.
Several initiatives were introduced to ensure success: the Growth Enhancement Support Scheme, aimed at improving access to fertilisers and seeds; the Nigeria Incentive-based Risk-Sharing System for Agricultural Lending to address access to finance and insurance; and Staple Crops Processing Zones to enable farmers to enter higher value-added markets.
The strategy is already producing striking results. Annual rice production has risen from 2.2m tonnes five years ago to 3.1m tonnes, and the private sector has responded by developing 14 new industrial-scale rice mills.
Cereal production is undergoing transformation as Nigeria begins to cut its imports of wheat flour, replacing it with high-quality, homegrown cassava flour as the main ingredient in bread. Sugar imports are also being reduced with the increased processing of cassava into a starch that can be used in sweeteners.
The most striking figure of all is that the share of the country’s farmers with access to fertiliser has soared, from 11% to 90%. Seed and fertilisers are now being provided directly to farmers and are reaching those in outlying rural areas.
If Nigeria commits more resources to agriculture and continues to improve institutional and legal frameworks, it will be in a position not only to feed itself but to export food – and to mark a path for the rest of Africa. As Akinwumi Adesina, Nigeria’s agriculture minister, said last year, “In Nigeria, we’re making agriculture the new oil”.
That crucial ambition couldn’t be timelier. Nigeria, which already has more people than any other country in Africa, is expected to become the world’s third most populous by 2050, overtaking the US. Across the continent, demand for food is soaring, especially in rapidly growing cities.
As the Africa Progress Report 2014 demonstrates, these are conditions not just for a booming agricultural sector, but also for a big drop in poverty. And that is desperately needed in Nigeria, where more than 100m people live below the poverty line.
African economies have been growing fast in the past decade, but few of the benefits are reaching the poor, especially when the growth is fuelled by oil and mineral export, which tend to create few jobs. Agricultural growth can change that, because it reduces poverty twice as fast as growth in other sectors.
Agriculture, in other words, can be even more than “the new oil”. One day the oil will run out – but sub-Saharan Africa will always have its fertile land, its rivers, its youthful workforce and its huge domestic market. Investing now can turn that potential into prosperity.
This article first appeared in Forbes, and is republished with permission.