2018 Budget: Agriculture’s N203bn no sign of Nigeria’s commitment to diversification rhetoric



Tuesday, June 26,2018

Last Year, President Muhammadu Buhari’s budget of recovery and growth allocated N135 billion for the combined recurrent and capital expenditure, a amount that was just 1.8 percent of the total expenditure of N7, 441,175,486,758 (seven trillion, four hundred and fortyone billion, one hundred and seven-five million, four hundred and eighty-six thousand, seven hundred and fifty-eight naira).

This was at a point when the country really needed to restore the agricultural sector as the economic mainstay and strategically rescue the nation from the harsh impact of falling oil prices and a weakening naira.

For that year, the recurrent expenditure for ministries, department and agencies under agriculture and rural development was N31, 752,144,051 while that of capital expenditure was N103, 793,201,010.

In this year’s budget of consolidation, there has been a marginal shift in the total expenditure for agriculture to N203, 010,092,743, representing only two percent of the total budget of N9.1 trillion. The recurrent expenditure stands at 53,811,953,706 while capital expenditure moves to 149,198,139,037.

Over N25.1 billion has been allocated for promotion and development of value chain across more than 30 different commodities while about N5.30 billion was allocated for national grazing reserve development. About N4.2 billion has also been dedicated to rural roads and water sanitation programme, N3.53 billion to agribusiness and market development, N4.08 billion to food and strategic reserves, N2 billion for supply, installation and commissioning of water rigs nationwide, N1.13 billion for support for youths in agribusiness and N2 billion for livelihood improvement family enterprise (LIFE) Programme.

This, for some industry observers and stakeholders , appears, to be quite better than the previous year, but hardly reflects the determination to revitalize the sector and raise its contribution to the gross domestic products (GDP) as being portrayed in the diversification campaign from oil revenue.

According to the economic recovery and growth plan (ERGP), the priority areas specifically include stabilizing the macroeconomic environment, achievement of agriculture and food security, expansion of energy infrastructure capacities, improving transportation infrastructure and driving industrialization principally through local and small business enterprises, all of which can combine to help the sector contribute about 60 percent to the GDP, supply 70 percent of the country’s export earnings and 95 percent of internal food needs as it once did.

Stakeholders who spoke to business a.m. expressed disenchantment in the fact that the budgetary allocation for the sector was only two percent when the government had a commitment to at least dedicate 10 percent of its total expenditure to enable food security.

Beyond the huge need for consumption driven by the country’s population, increasing industrial demand has come to stay, with many industries operating in the different value chains looking up to importation for raw produce. The government would only be paying lip service to agriculture if under-funding continues, some believe.

Emmanuel Ijewere, the vice-president of the Nigeria Agribusiness group (NABG) in an interview with business a.m. said the figure was lamentable and belies the agenda to explore the potential of the sector.

For him, the budget approval coming six months into the year does not leave much to the expectations of stakeholders, especially farmers, as the implementation may not support their seasonal activities. Although, Udoma Udo Udoma, the minister for budget and planning, had assured at the presentation of the approved budget that implementation will be fast-tracked.

“Even if it’s only for capital budget, it is absolutely and totally insignificant. The Maputo agreement which Nigeria signed, said for the Nigerian government to ensure food security for its people should have a minimum of 10 percent of its budget given to agriculture. It does not reflect the importance attached to this sector. Seventy percent of our populace is in that industry and yet not much attention is being paid to it. It is the biggest employer of labour. It is lamentable that we have only N203 billion for agriculture in a country of almost 200 million people,” he lamented.

“The question I would rather ask is when are we submitting the next budget to the National Assembly? Most countries before the end of the year have already approved their budget well in advance so that everybody is able to plan. Right now, we waited until a few days ago when the president signed the budget and we were not even sure what would be in the budget. This poor planning translates to inefficient implementation of the budget provisions,” Ijewere added.

He believes the most crucial aspect of agriculture that should be prioritised to make up for the wasted period is the value chain.

In respect of the food production, he noted that adequate measures must be given to the provision of storage technologies and facilities in order to reduce the losses and wastages suffered by producers, adding that the government should harness efforts with the private sector for blending of ideas to cut the loss.

Governments around the world have committed to cutting food loss and waste by 2030 under the Sustainable Development Goals. Under the Malabo Declaration in 2014, African Union member countries set themselves the ambitious target of halving post-harvest losses by 2025.

He said: “We know Rome cannot be built in a day but there are better ways of semiprocessing them. More attention should be paid to things like solar power to be able to provide cooler environment for our produce.”

Supporting the emphasis on agric-value chain development to create more jobs and improve local industries, he said the government needs to intensify efforts at ensuring that all export crops are semi-processed before they are sent out of the country.

The vice-president also raised the need for stricter enforcement of policies to, for instance, avoid situations where the custom and the government appeared to be on different pages, when government makes a policy to protect farmers and it gets sabotaged by non implementation by the Customs authority.

He also noted that if Nigeria will take agriculture seriously, it requires more than a minister of state. “Another full-fledged minister for animal husbandry is needed. Nigeria is just too big and the opportunities are just too large. One minister is being overworked for that so that we can have specialization,” Ijewere noted.

But for Babafemi Oke, chairman, All Farmers Association of Nigeria, Lagos chapter, the marginal adjustment in the budget marks an improvement in the government’s commitment to agriculture, although he expected not less than 10 percent of the total budget.

He also agrees that the government should focus on processing of agricultural produce, suggesting that some areas of the six geopolitical zones be designated to processing centres to encourage increased production and food security.

“The area we are thinking about is processing. It is a very vital area in agriculture. There is not much we can get if we harvest cocoa here and we now export it to other countries for it to be turned into chocolate and other things. But not many farmers can afford most of these machines for processing. So we are thinking that the government should establish processing centres across the country,” Oke said.

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