Agricultural investment and the growing food insecurity in Nigeria

• The government earmarked over 11 per cent of the total budget size between 2015 and 2020 for the agricultural sector;
• Between 63.9 per cent and 90.2 percent of budgetary allocation to the agricultural sector in 2018, 2019, and 2020 was for capital items;
• The International Fund for Agricultural Development has committed $1,141.82 to Nigeria’s agricultural sector.
• The African Development Bank provided a $9 million equity investment fund for agricultural finance in Nigeria in 2016.
• Despite the huge local and international investment into the agricultural sector, over 2 million Nigerian children are suffering from severe malnutrition;
• As much as 4 million Nigerians in the northern part of the country could be at risk of worse food insecurity.

Nigeria’s agriculture contribution to the Gross Domestic Product (GDP) makes it the largest sector in the country. In 2014, the sector achieved a GDP of $113.64 billion. Even with low agriculture yields, conflicts, and armed insurgency, the sector still contributed $78.45 billion to the GDP in 2017. The sector contributes a cumulative of 25 per cent of the GDP and accounts for 48 per cent of the labour force. In the last five years, the sector has maintained a growth rate of 4 per cent.

While Nigeria’s agricultural sector has a compelling growth potential, it has not sufficiently performed within its full scope. The sector’s workforce, exports and GDP contribution have fallen recently. Closely connected to this trend is Nigeria opting for oil and gas production as an economic mainstay. According to the Securities and Exchange Commission, credits to the agricultural sector are very low.  indicaitng subpar performance. Further, the fact that subsistence farming is mainstay as against industrialisation does not help. For example, mechanised agriculture in the US has led to an increase in agricultural production, improved yield and improved efficiency and productivity of agricultural manpower. Therefore, with subsistence farming, Nigeria may not match up with counterpart nations in production and yield. 

Government-Based Agricultural Interventions in Nigeria

To improve agricultural finance in Nigeria, the federal government (FG) has introduced different financing initiatives. Reminiscent of this was the Commercial Agriculture Credit Scheme (CACS) established in 2009. In 2015, the FG launched another scheme- the Anchor Borrowers’ Programme- to create a link between anchor companies involved in agricultural processing and smallholder farmers. Five years later, the government unveiled its 10-year agricultural programme called the Green Imperative. The program is worth $1.2 billion and hopes to inject $10 billion into the economy.

Older interventions include the National Accelerated Food Production Programme (NAFPP) (early 60s), Agricultural Credit Guarantee Scheme Fund (ACGSF) (1978 -2006), Agricultural Development Project (1974), Operation Feed the Nation (1976), and Green Revolution Programme (1979). The River Basin-Development Authorities (1976), National Agricultural Land Development Authority (1992), and the National Fadama Development Project are other interventions of government to Nigeria’s agriculture sector. Better Life Programme for Rural Women (1987) and Family Support Programme (1994)/ Family Economic Advancement Programme (1996) are other social intervention programmes that had the agricultural sector in focus.

Budgetary Allocation to Agriculture in Nigeria (2015- 2020)

The long list of FG’s interventions in the agriculture sector suggests the enormity of financial investment into the sector. While the full monetary worth of government intervention into its agriculture sector might be difficult to track, budgetary allocation to the sector can provide insight on recent financial investment.

Between 2015 and 2020, the FG committed over half a trillion naira in budgetary allocation to Nigeria’s agriculture sector. This sum represents over 11 per cent of the total budget size for the six consecutive years. Yearly, budgetary allocation to the agriculture sector ranged between four per cent and 22 per cent. The year 2018 had the highest allocation to the sector (22.3 per cent). 

Further, the FG earmarked about 15 per cent of the revised 2020 budget to the agricultural sector. It is important to note that most of the budgetary allocation to the sector in the last three years have been for capital items. Capital allocations to the agriculture sector was 73.5 per cent, 90.2 per cent, and 63.9 per cent for 2018, 2019, and 2020.

International Agricultural Development Assistance

Beyond the FG’s budgetary commitment to agriculture, the sector has extensively enjoyed aid foreign aid. While the total monetary value of international development assistance to the sector may be difficult to quantify, the International Fund for Agricultural Development has committed $1,141.82 to Nigeria’s agricultural sector. In 2016, the African Development Bank provided a $9 million equity investment fund for agricultural finance in Nigeria. Similarly, the Food and Agriculture Organization of the United Nations has carried out various agriculture-based projects and interventions in Nigeria.

Other development partners that have contributed to Nigeria’s agricultural sector include the Alliance for a Green Revolution in Africa, the Bill and Melinda Gates Foundation, the United States Agency for International Development, the Netherlands, and the UK Department for International Development. In most instances, these organisations channelled funding towards capacity development, policy development and implementation; thus improving farming methods and best practices, leading to increased output.

Food Insecurity in Nigeria

In contrast to the teeming investment in agriculture in Nigeria, the country is still at the mercy of food insecurity. Reports show that over 2 million Nigerian children are suffering from severe malnutrition. In 2018, this estimate was 2.1 million, albeit for Nigerians as a whole. According to a DATAPHYTE analysis, as much as 4.02 million people in northern Nigeria could  be victims of worse food insecurity (especially because of the ongoing pandemic). In addition, there is a crippling rise in food prices that further threatens many households in the country.

The Challenge: Underfunding or… ? 

There is a majority who argue for the unavailability of funds to the agricultural sector, when in truth, it has enjoyed significant local and international support. Perhaps it is time to evaluate Nigeria’s investment into its agriculture sector. Besides, Nigeria should not be subject to food insecurity and high food prices, given all the funds channelled into Agriculture. With the investments, the sector should also deliver more on direct and indirect employment.

Speaking with Mr Celestine Okeke, the Lead Partner of the Sustainable Entrepreneurship and Economic Development Initiative (SEEDI), he noted Nigeria’s agriculture sector has underperformed in many regards. He, however, stated that the problem with Nigeria’s agriculture sector is not underfunding. According to him, throwing in more finance into the sector may not necessarily convert to the expected change. Rather, we need to address the capacity problem with the Federal Ministry of Agriculture and its subsidiary agencies. He also emphasised on the inadequate understanding of the processes and implementation framework. In his opinion, it has hampered the sector from peaking.

According to him, haphazard transfer of civil servants from non-agriculture-based ministries to head and occupy key positions in the agriculture ministry forms a part of the challenge. The capacity gaps cumulate in wastage of resources and failure of policies and actions to address genuine problems. For example, the reports of seed and fertiliser spoilage was because of poor handling- stemming from imprudence on storage best practices regarding weather and climatic requirements.  

Okeke further noted that the food insecurity and the failure of the agriculture sector to deliver  are only manifestations of the capacity gaps in the ministry of agriculture. “If the ministry that is saddled with growing the sector is underperforming, can we expect more from the sector”? Absolutely not! In fact, Nigeria is not among the top ten food secure countries in Africa. The country has some of the lowest yields in staple crops production in the world. Thus, the sector has underperformed to a very large extent.

Rewriting the Narrative

To achieve a change in Nigeria’s agriculture sector, there is a need to completely overhaul the ministry of agriculture. A good genesis would be by putting the right persons in the right places, per Mr Okeke. Senior officers with little or no experience in the agriculture sector should not be deployed into the ministry. In addition, there is a need for timely policy planning and implementation. For instance, the current lack of a nationwide agricultural policy may continue to deny Nigeria the full prospect of the sector. 

Similarly, there is a need for proactive development and implementation of agricultural policies in Nigeria. The FG should strive to to avoid delays in policy interventions that could be costly. For example, lack of a proactive and inclusive policy response during the COVID-19 lockdown disrupted planting and food production. We could have avoided this through a holistic and spontaneous policy intervention. 

Closely related to this is the need to promptly implement agricultural policies and framework. The National Agricultural Resilience Framework (2014) which the FG is yet to enforce should be revisited for implementation. Among other things, this will improve agricultural yields and position the sector to deliver better.