Going by history, agriculture was the mainstay of Nigeria’s economy before the discovery of oil in commercial quantity in 1956. Oil exploration and subsequent fortunes from it affected agriculture in the country so much that people played down agricultural activities to the detriment of the nation’s economy.
But with the decline in the country’s revenue due to the volatility in the global oil market, concerned Nigerians have said this may be the right time to return to the farms.
Agriculture is made up of four sub-activities: crop production, livestock, forestry and fishing. According to 2016 first quarter data of the Nigerian Bureau of Statistics (NBS), in nominal terms, the sector grew by 14.15 per cent year-on-year. This was higher than growth rates recorded in the corresponding quarter of 2015 and fourth quarter 2015 by 6.71 per cent points and 4.65 per cent points respectively. Agriculture contributed 19.17 per cent to nominal GDP during the quarter under review.
While real contributions to the country’s GDP growth through agriculture in first quarter of 2016 stood at 3.09 per cent year-on-year, a decrease of 1.61 per cent points from growth recorded in the corresponding period of 2015 and also lowers by 0.39 per cent from fourth quarter 2015. The sector contributed 20.48 per cent to real GDP during the quarter under review.
Also, with the economic transformation agenda of the federal government firmly on course, indigenous investors who have made fortunes in other sectors of the economy are now increasingly investing in agriculture under the new dispensation in agriculture, especially the backward integration policy.
This development, perhaps, informs the new focus on commercial agriculture with the establishment of different funds to revive some of the moribund agricultural programmes.
Nigeria has huge agricultural potential. With over 84 million hectares of arable land, of which only 40 per cent is cultivated; a population of 167 million people, making her Africa’s largest market; 230 billion cubic meters of water; and abundant and reliable rainfall in over two thirds of its territory, the country has some of the richest natural resources for agricultural production in the world. Not surprisingly, Nigeria used to be a major player in the global agricultural market in the past, as the world’s largest producer of groundnuts and palm oil in the 1960s, and the second largest exporter of cocoa. The country was also self-sufficient in food production before the emergence of oil in the 1960s.
The sector is undergoing major reforms and transformation. For instance, President Mohammudu Buhari, recently in his address at the conference of the Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), called for more private investments in the agricultural sector of the economy.
‘‘Increased investments in the agricultural sector remained the best way to unlock the country’s economic potential and curb its excessive dependence on oil revenues. Growing our own food, processing what we produce, becoming competitive in export markets and creating jobs all across the economy are crucial for our national security,” he said.
Buhari, who noted that the agricultural sector was the largest contributor to the country’s GDP, pledged that his administration planned to make Nigeria self-sufficient in rice production within the next two years.
The president said that since Nigeria was one of the world’s largest producers of agricultural products like cassava, improved investments in agriculture would boost the country’s exports and lessen its dependence on proceeds from petroleum.
Buhari also said that enhanced private-sector investments in agriculture would facilitate the fulfillment of government’s efforts to diversify the economy, adding that Nigeria had immense agricultural potential.
Dangote Group’s involvement in Agricultural sector of the nation’s economy was principally motivated by the desire to create more jobs and empower Nigerians and make Nigeria self-sufficient in food and beverages production. The Group is of the belief that agriculture is one area through which the teeming employable but unemployed Nigerians could easily be engaged. It has the potential for the largest number of jobs.
Against this background, the Dangote Group began to consider ways of delving into agriculture having been a strong player in quite a number of businesses in sectors such as cement, flour, Salt, Beverages, Real Estate, Iron, steel, among others through which several thousands of Nigerians are gainfully employed. The group is reputed to be the single largest private sector employer of labour.
The Group’s foray into Agric and food processing business began in 1997 when it keyed into the backward integration policy of the government in sugar sub-sector of the nation’s economy. Then Dangote Industries Limited sought for and got an allocation for land in Hadeija in Jigawa states for sugar cane plantation and sugar refining. The business commenced later with the opening of the Dangote Sugar Refinery in Apapa, Lagos in 2000.
The sugar-refining factory was commissioned in 2001 with an initial installed capacity to process 600,000 MT of raw sugar per annum. The refinery has since undergone two expansions which increased the production capacity to about 1.44 million MT per annum, making it the largest sugar refinery in sub Saharan Africa and second largest in the world.
Recently at the Dangote Fertilizer and Petrochemical projects, the president of Dangote Group Plc, Alhaji Aliko Dangote explained that the diversification of Nigeria economy was long overdue and that one sector that Nigeria can focuses on to rejuvenate the economy is agriculture.
He stated that his investment in fertilizer is one sure way the diversification into agriculture could succeed because according to him, it will amount to little if focus is directed to agriculture and fertilizers would be imported.
“Agriculture is the way to go, but a critical component of that sector is fertilizers, Nigeria has more arable land than China which now is the biggest economy in the world, we can tap into our vast land and produce what we need and even export the remaining.
“By the time we complete this project, there will be opportunity to take on agriculture and say bye to poverty, because there will be jobs, no sector has more job potential than agriculture. This $12 billion refinery would have a capacity of 650,000 barrels a day,” Dangote said.
Agribusiness experts have said the fundamental roles agricultural sector is expected to play in the nation’s national development have continued to be undermined by sundry challenges, thereby causing serious distortions in the economy.
As the new drive towards diversification of the economy gathers greater momentum, they believe that if the current interest of investors in the sector is properly harnessed through appropriate policy measures, the road to Nigeria’s sustained and balanced socio-economic development will be achieved.