Strong Nigerian agriculture sector is the icing on a cake

Strong Nigerian agriculture sector is the icing on a cake

A Nigerian official was heard to say privately at a recent conference that a stronger agriculture sector would be the icing on the cake for the Nigerian economy.

While it is true that the country has enjoyed strong growth in recent years, it would be rather more accurate to describe agriculture as the cake itself, or perhaps the flour in the cake. Agriculture and the employment that it provides should be the basis of the Nigerian economy, with oil regarded as a fortunate addition rather than the foundation of national GDP.

To stretch the analogy to breaking point, there has therefore been good news for flour production from Flour Mills of Nigeria. The company has announced that it will invest $1bn over the next three to five years in its Nigerian and other West African operations.

The firm’s vice chairman John Coumantaros commented: “The demographics are working very much in our favour. If you think about a rapidly urbanising country, the middle class that is going to buy our products is expanding.”

He added that the company expected to sustain the 11-15% revenue growth rate that it has enjoyed over 2009–14 over the next five years. The company is the biggest pasta producer in Nigeria and its success has been built on the growing popularity of pasta in the country.

At present, Nigeria imports most of its wheat requirements, at a cost of N635bn ($3.8bn) in 2013, although there are large areas in the north of the country that could sustain healthy wheat yields.

Successive governments have sought to promote domestic cultivation, including through bans on imports, but although production has increased, national potential has not been adequately tapped. Research undertaken by the Lake Chad Research Institute (LCRI) last year concluded that the country could become self-sufficient in wheat by 2017 if 600,000 hectares of land in the north of the country were utilised for wheat cultivation.

The land in question has already been identified, as have the suitable wheat strains, Norman Borlaug and Reyne 28, which have been specifically developed for use in Nigeria. The former was named after the late US’s ‘Father of the Green Revolution’.

In 2010, just 60,000 hectares of land were used for growing wheat in Nigeria, yielding a mere 1.2 tonnes per hectare, in comparison with the five to six tonne average of the new strains. The research also countered claims that a rapid increase in wheat production would place unrealistic demands on water supplies.

LCRI executive director Oluwasina Olabanji: “We have rain-fed wheat in Nigeria. This rain-fed wheat is cultivated in the Nigerian Highlands. These Nigerian Highlands are in Mambilla Plateau in Taraba State, Jos in Plateau State, and Obudu in Cross River State. We have about 80,000 hectares of land in these areas that are suitable for rain fed wheat production.”

However, much depends on whether local producers can compete with imports. While most international financial institutions demand the reduction or removal of subsidies in African countries, the US, the European Union and Japan continue to heavily subsidise their farmers, including in the wheat sector. The US is the biggest supplier of wheat to Nigeria. A level playing field in the sector would be genuine fair trade but shows no sign of materialising


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Written by African Business Magazine

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