To agriculture’s credit: Money matters arising
In articles past, I have opined on the project of agricultural transformation and presented recommendations on how to get the oil (capital) that will keep this transformation machinery running. This piece arises from that preoccupation, with the intention of providing updates in this regard from a public and private sector point of view.
The first update is one that makes me proud as a BusinessDay columnist but is significant to the sector for more important reasons. In this year’s edition of the BusinessDay Annual Banking Awards, United Bank of Africa plc (UBA) bagged the award for the best bank in support of agriculture. This was based on statistics that confirmed the bank as being the top agricultural lender in the country, lending about N48 billion to agricultural entrepreneurs in 2012. It is hoped that by rewarding the nation’s agricultural financiers, this initiative, the first of its kind by BusinessDay, will encourage competition among the commercial banks, leading to a great increase in the amount of money lent to viable agricultural projects every year.
Meanwhile, on the national scene, two credits have been approved by the World Bank towards the acceleration of the Nigerian Agricultural Transformation Agenda. The first of two instalments, $100 million from the International Development Association, has been earmarked for capacity building in policy management (of the agenda), yield improvement (of the key crops), and market access (to finished products). Although this credit will be channelled to the government directly for the purpose of strengthening the government policy, it is also aimed at strengthening Nigeria’s growing class of agricultural entrepreneurs, thus improving their standards of living and facilitating the growth of industry in general while tackling the issues of food security and malnutrition.
The second instalment – of $200 million – has a more direct aim: The Third National Fadama Development Project. This is an initiative that seeks to promote the growth of business in agriculture by improving connections between smallholder farmers and large-scale investors. These smallholder farmers constituting farming consortiums in six states in the country are to be involved in intense value-adding production – which includes efficient market delivery of cassava, rice, and sorghum.
But capital is to be sourced from other means as well. In the recent past, the Nigerian government has preached the gospel of business opportunity to international investors at the World Economic Forum in Davos as well as in South Africa. Business partnerships are being sought even as far as China. And international interest is fast rising. A lot of emphasis is being placed on processing and this is by no means accidental as Nigeria boasts a high production of many crops (such as cassava, and fruits), an advantage foiled by storage and post-harvest losses as well as a dearth of value addition. Therefore, by attracting investors and capital to the project of processing, Nigeria will be closing off a circuit of importation of fruit juices or juice concentrates, tomato pastes, cassava flour, and rice – a project that consumes billions of naira every year. It is thus a no-brainer that the success of this project will result in a capital boost for domestic agriculture and, in cases where the local market has been exhausted, will lead to an expansion of our agricultural exportation frontiers.
Affirming the World Bank’s support for the ATA, the Bank’s country director for Nigeria, Marie Francoise Marie-Nelly, has touted these developments as important moves in the right direction for Nigeria, which has “an enormous opportunity to promote a vibrant, competitive and technology-propelled agricultural sector”. Her comments remind us of the importance of the agenda’s multi-faceted nature and also serve as a challenge to our country to not sleep on the potential that we have. Put differently, to guarantee long-term success, no part of the transformation machinery should lack lubrication.
The journey into the future we want will see a more intensive incorporation of youths – especially university graduates – into this agenda in a way that properly exploits and improves their skills. In the past two years, I have met young Nigerians with passion for agribusiness but no capital to make their dreams take flight. I have met others who feel connected to agriculture in theory but firmly believe that a job in the petroleum sector is the only way to earn a decent living in Nigeria. These interactions have made me more convinced of the need to develop an innovation and business competition culture among youths, setting these competitions and programmes as avenues for bright and driven youths to connect with local and global investors.
To be sure, some of these programmes – though few and far between – already exist. And the youths are already an important focal point of the ATA. The problem is thus not in the content but in the extent of our journey. There still exist many well-intentioned young individuals and youth-focused agricultural groups and institutions who have become disillusioned by the absence of capital within their spheres of influence. Some of them have ideas but lack the skills to develop strategy. Others already have the strategy mapped out but lack convincing grant proposals and thus cannot benefit from the much-coveted grants offered by international organisations. Some of them already have business proposals ready but are deterred by lending requirements from financial institutions and without any financial backers, the prospect of agricultural enterprise and empire building becomes dimmer by the day. These individuals and groups are the right target groups for banks seeking to improve their agricultural lending scores, local and global investors seeking to cash in on the growth of the agricultural sector, and policymakers committed to effecting long-lasting change in the sector. Thus, by expanding the access to these programmes and by connecting investors to youths and civil-society groups, more and more youths will be able to resurrect their moribund ideals of value creation through agricultural business, a viable alternative to street crime, cybercrime, oil bunkering, and small-scale retail entrepreneurship.
As a development enthusiast, I am always on the lookout for potential and passion in young Nigerians. These days, I meet so many young people ‘on fire’ for Davido, the Kardashians and Nigerian and European football clubs. This is not accidental; it is a product of a culture that has offered little else by way of motivation. The time is ripe to harness that energy and channel it into something that will make these youths financially satisfied, professionally fulfilled, and able to leave their legacy in Nigeria’s history. With capital and the right grooming in processing, business management, industrial, technology, research, and farming techniques, this class of rising professionals will be able to fan the flames of agricultural prosperity.
Obasi is a syndicated columnist, co-founder of the Youth Consortium for Progress and one of the program managers for the Harambe Incubator for Sustainable and Rural Development (HISARD).
tobasi@harambenigeria.org
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