What It Takes To Boost The Nation’s Economy -By Adewale Kupoluyi

As the political climate charges up in the country, a critical sector that should not be taken for granted is the economy. In fact, there can never be vibrant politics without a buoyant economy. It is for this main reason that a recent discourse on the nation’s economy becomes relevant. More importantly, the persistent call for Nigeria to diversify its monolithic economy, from oil to agriculture, again resonated. Crude oil limitations include high fluctuating global prices, availability of alternative energy sources, and associated environmental hazards, among others.

It is instructive to note that agriculture remains a vital component of Nigeria’s national economy, contributing 24.4% of the Gross Domestic Product (GDP), providing employment for over 30% of the population and guaranteeing food security for a large population of nearly 200 million people. This pointer was given by the Chief Executive Officer and Managing Director of Standard Chartered Bank, Nigeria Limited, Mr. Lamin Manjang, at the 1st quarterly lecture of the Africa Centre of Excellence in Agricultural Development and Sustainable Environment (CEADESE), Federal University of Agriculture, Abeokuta (FUNAAB), Ogun State, which had at its theme, “Making Agricultural Funding Work in Nigeria”.

According to Manjang, Nigeria has the required resources to drive a flourishing agro-economy while sustaining a great level of food security, if only agriculture can be given urgent and due attention. Enumerating the three critical areas requiring priority to engender growth in the agricultural sector of the country, which would ensure a greater contribution to the nation’s economy since the field of agriculture is wide. He mentioned the availability of agricultural input such as quality seedlings, fertilizers, and water for production activities, exploring the export potentials of agricultural produce, and adequately funding the sector.

The banker identified the various approaches taken by successive governments in the country to deliver credit to the sector through funding and Credit Guarantee Schemes (CGS) to de-risk the sector for lenders such as the Agricultural Credit Guarantee Scheme (ACGS), Commercial Agriculture Credit Scheme (CACS), Anchor Borrowers’ Programme (ABP), Agribusiness/Small and Medium Enterprises’ Investment Scheme (AGSMEIS), and National Food Security Programme (NFSP). “The agricultural sector has the capacity to generate more employment opportunities, contribute more substantially to the GDP of the nation and become a strong source of foreign exchange earnings, if well harnessed. Relevant government agencies and participating financial institutions should demonstrate greater commitment and focus on these agricultural funding programmes as tools for economic growth. More funds, including investments in data mining, technology, and effective strategies should be deployed to make them work”, he submitted.

“Administrators of the schemes and participating lending institutions should create a framework to simplify and make it easier for all value chain players to access credit with minimal collateral requirements. This rides on the back of an improved credit culture based on some of the policies of the Central Bank of Nigeria (CBN) to encourage and strengthen good credit behaviour. There should be greater autonomy for relevant bodies managing the agricultural financing programmes. Undue government involvement and bureaucracy constitute a major drawback for such programmes.

“This leads to the apathy of participating financing institutions and the lack of discipline and commitment of beneficiaries by impacting both uptake, and repayment. There should be greater awareness of the various funding programmes for agriculture. These programmes have remained largely under-reported. Participating in financial institutions and the relevant government agencies should invest more in enlightenment campaigns through trade unions, associations, and co-operative societies. This will deepen penetration”, Manjang added.

Other intervention packages identified by the financial expert are the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), Accelerated Agricultural Development Scheme (AADS) and Paddy Aggregation Scheme (PAS), noting that the agricultural sector has the capacity to generate more employment opportunities, contribute more significantly to the GDP, and become a strong source of foreign exchange earning if well-coordinated, while recommending more stakeholder training, better mechanisation, good road infrastructure, transportation, and all-year-round storage systems to get the sector to realise its full potentials maximally.

Earlier, the Vice-Chancellor of FUNAAB, Prof. Kolawole Salako has observed that without adequate financing and the full support from the Federal Government, in terms of infrastructural development, agriculture cannot move forward, as envisaged. The don stressed the need for the people to work harmoniously together and provide the enabling environment for agriculture to thrive, while also calling on Nigerians to embrace locally-made products and move away from over-reliance on imports. According to him, “The moment importing stops in Nigeria, it will improve creativity. While we encourage that we should be more productive, the enabling environment and financing must be available”. Prof. Salako, a leading agricultural researcher in Nigeria with specialisation in Soil Physics, further identified insecurity as a major challenge confronting agricultural development in the country. He called on the Federal Government to manifest its commitment to sustainable agriculture by beefing up security across the country.

The VC appreciated CEADESE for organising the lecture, stating that the university management had decided to centralise the movement of the centre, as part of his vision, adding that it would now have its own central laboratory, just as the Director of CEADESE, Prof. Olukayode Akinyemi, said his centre came on board about four years ago, through a World Bank grant to FUNAAB. According to him, the university was one of the few ACE universities that benefited from the bank’s intervention, stressing that the purpose of the grant was to bridge the gap between the academia and the industries, to invest technically in regional integration through strategic actions, to improve on latest training facilities in the ivory tower, and to train the next generation of scientists, to be able to shape the future of African nations toward sustainable development.

Key points from the incisive presentations of the trio of Manjang, Salako, and Akinyemi on how to boost Nigeria’s economy, through agricultural diversification, can be summarised into increased agricultural input, placing emphasis on agricultural exporting, investing more in data mining and technology, need for lending institutions to create simpler value chain players’ access to credit facilities with minimal collateral, encouraging good credit behaviour, according greater autonomy to agricultural financing bodies, reducing government’s involvement and bureaucracy, promoting stakeholder training, acquiring modern storage systems, engaging in collaborative work, supporting the purchase of locally-made products, and improving security networks within Nigeria. Diversifying our economy would largely depend on how strategic we can chart a way forward by implementing the various recommendations such as the ones that were carefully enunciated at the 1st quarterly lecture. That would certainly be a worthwhile move to make in boosting the fortunes of our ailing economy.

Kupoluyi writes from the Federal University of Agriculture, Abeokuta (FUNAAB), adewalekupoluyi@yahoo.co.uk, @AdewaleKupoluyi