Opportunities in N450bn food market of 18 states
Eighteen states of the federation owing their workers a total of N660 billion salaries ranging from two to nine months arrears are not taking full advantage of opportunities inherent in their monthly food markets, collectively worth about N450billion
According to industry watchers, if these state governments put their thinking caps on and encourage massive food production to at least service the food markets of their states, they would increase the velocity of cash in their local economies which will subsequently boost their Internally Generated Revenue (IGR), Business Day investigations have gathered.
Based on the average minimum sum of $1 (N197) that most Nigerians reportedly spend daily on food, according to researches by NOI polls, the United Nations and National Bureau of Statistics, Kano state with a population of about 9.4 million, using the 2006 census, has a daily food market of about N1.9 billion and monthly food market worth N55.6bn.
Katsina state has a monthly food market of N34.3bn, Oyo state has N33bn, Rivers – N31bn, Bauchi – N28bn, Jigawa – N26bn, Benue – N25bn, Imo – N23bn, Akwa Ibom – N23bn, Ogun – N22bn, Ondo – N20bn, Osun – N20bn, Kogi – N19bn, Zamfara – N19bn, Plateau – N19bn, Cross River – N17bn, Abia – N17bn and Ekiti –N14bn. These 18 states have an average monthly food bill of N25.2 bn.
Industry watchers affirm that if each of these states simply produces the food consumed by their citizens, billions of naira which would also create massive employment would be flowing in their economies and raise their Internally Generated Revenue (IGR).
Edobong Akpabio, chief executive, Visionage Agrotech Farm, a farmer/consultant explained that each of such states would be able to grow their tax revenues such as Personal Income Tax, levies and fees.
Akpabio stated, “The state can also earn interest giving loans to food producers. They could provide storage facilities at a fee or buy up certain commodities and store in their strategic food reserves to be sold when the food in not in season.”
She added that the states must provide the enabling environment. “State governments claim not to have funds for capital projects but can afford private jets. Apart from that there are things they can easily do, they can make land acquisition for agricultural purposes less stringent, help potential farms clear large hectares of agricultural land, prevent
miscreants known as area boys from creating security challenges/threats to investors and support the Nigeria customs in flushing out contraband foods from their markets.”
Giving an analogy that could be adopted by state governments, Johnson Chukwu, a financial consultant stated, “When a country wants to stimulate production, it has to reduce cost of funds.”
Henry Olatujoye, president, National Palm Produce Association of Nigeria (NPPAN), cautioned against Nigerians’ clamour for foreign foods.
Olatujoye added, “The food produced in Nigeria is better for our health.
It is unfortunate we find ourselves in this quagmire whereby Nigerians prefer imported foods when we have locally produced ones.”
On the recent policy of the Central Bank of Nigeria (CBN) to withhold foreign exchange from importers of certain commodities that Nigeria has comparative advantage, Olatujoye said, “It is a move in the right direction, we must honour decisions by the government that will be for the good of the country.”
He however urged the CBN to watch out for some banks that would attempt to subvert the process. “Some banks may source foreign exchange for their clients under the guise that it is meant for an item that is not restricted and then divert it for the purpose of importing a restricted item. It is unfortunate that as a people we tend to disobey the authorities but we should be concerned by the large number of unemployed youths. It is also very worrisome that 30percent of young people from the villages are on the streets hawking petty items for survival instead of being profitably engaged in producing food for the country.”
According to industry watchers, if these states can look inwards at investments that are sure to succeed and that do not need the Federal
Government’s go-ahead such as mining of solid minerals, they would not have to depend heavily on federal allocations.
OLUYINKA ALAWODE