Nigeria must learn from successful experiences

5. Nigeria must learn from successful experiences

How other countries developed their agriculture sectors, fed themselves and drove economic growth with jobs

 

 Agricultural transformation across the globe has led to dramatic reductions in poverty

 

 

 Fig 28: Relative growth in the agricultural sector – Base 1981 (Insert: Annual growth rate)

 

 Fig 29: Decrease in % of population under the poverty line ($1.25)

 

  • China, Vietnam, Brazil and Thailand have seen dramatic growth in their agricultural sectors over the last three decades.
  • Over the same period, they saw an even more dramatic decline in their level of poverty
  • Vietnam and China took 40% of their population out of poverty in 10 years, led by aggressive investment and growth of their agricultural sector
  • Investing in the agricultural sector also developed the rural communities that inturn significantly reduced rural urban migration

 

 Agriculture transformation is not only about food… it is also about the economy

 

a. Agricultural development via import substitution

 

 

Agricultural development with a focus on self-sufficiency via import substitution, lowers the cost of food, increases real wages and drives down inflation.

 

b. Export-oriented agricultural sector

 

 

1. A rapid transition to an export-oriented agricultural economy, diversifies the economy thereby increasing foreign exchange reserves, stabilizing the exchange rate.

2. This coupled with reduced inflation, drives macro-economic stability.

3. Macro-economic stability will in turn significantly increase the level of foreign direct investment (FDI)

 

c. Grow Value added agro-processing sector

 

 

Leverage the foreign direct investment (FDI) and the economies of scale derived from an export-oriented large/efficient agricultural sector to provide inexpensive raw materials to stimulate investment in the agro-processing industry

 

d. Backward integration into higher value added manufacturing

 

 

With growth in agro-processing industry, backward integrate into higher value added services and manufacturing of industrial equipment and produces for the burgeoning industry

 

Goal

An Industrialized, high-growth, diversified economy, creating jobs, creating wealth and providing food security for our people

 

Thailand’s agricultural development enables it to have one of the lowest unemployment rates in the world at 1.2%

 

Leveraged agriculture to backward integrate into higher value-added manufacturing

 

 

Fig 30: Growth in the agricultural and manufacturing sectors

 

Fig 31: Thailand exceptionally low unemployment rate

 

  • Significant investment by the Thai government in the development of the agricultural sector catalyzed unprecedented growth in the manufacturing sector.
  • This economic growth has enabled Thailand to have one of the lowest unemployment rates in the world today at 1.2%

 

Rapid Agricultural Transformation in Africa: Malawi

Malawi became self-sufficient in food production withing one year of focusing on an agricultural transformation

 

 

Fig 32: Malawi achieved and exceeded its maize requirements in three years

 

  • In 2004, Malawi had its worst harvest in a decade
  • In 2005, the government implemented one of the most ambitious and successful assaults on hunger in African history
  • The transformation was led by the Malawian president
  • Launched a national input support program targeted at small holder farmers
  • Maize production doubled in 2006 and tripled in 2007, enabling Malawi to export:

a. 400,000 to Zimbabwe
b. 10,000 metric tons of food aid

 

 Rapid Agricultural Transformation in Africa: Kenya

 

Private sector driven marketing institutions drove Kenya to the #1 position in the global horticulture market

 

 

Fig 33: Horticulture value growth

 

Fig 34: Floriculture export growth

 

Lessons for Nigeria

1. Need for “Value Chain co-ordinator”

  • Horticulture development authority (HCDA) tasked with setting and enforcing grades and standards for the national production

2. Infrastructure investments

  • Supported development of roads and irrigation; new flights to target export zones

3. Private sector leadership

  • Key value chain participants took ownership of articulating and executing growth agenda for agriculture
  • Sector controlled by private sector, with no government interference except in regulation and certification

4. Supportive fiscal polities

  • Lower taxes on inputs, equipment e.t.c
  • Lower duties

5. Market information systems available for farmers