#EMBA27 Agribusiness in Nigeria

Malobi Ogbechie Written by Malobi Ogbechie · 1 min read >

Agriculture is a fundamental part of human survival and existence. For thousands of years, human beings have been intentionally cultivating crops to feed, clothe and shelter themselves. It is believed that most of humanity initially started off as foragers and eventually moved on to agriculture. Agriculture has evolved over the years thanks to new practices, technologies, and our understanding of nature. In this day and age, we are now focusing on agribusiness. Agribusiness is about the processes and businesses that support the agriculture supply chain. Nigeria used to be an agricultural behemoth in the late 60s and early 70s. At one point we were the largest exporter of palm oil in the world, and very high up there when it came to other crops such as peanuts and rubber. Malaysia and Indonesia are usually within the top three exporters of palm oil today, but ironically, their first palm tree was grown from a Nigerian palm nut. To add insult to injury, Nigeria is now a net import of palm oil as of 2022. We currently import over $200 million of palm oil annually. So where did it all go wrong? Can we get back to who we were in the 60s?

The short answer to the first question is poor governance and overreliance on the oil and gas sector. Nigeria’s main revenue source of from the export of crude oil. Oil money is quick and big money. Agriculture is slow but sustainable money. As you can see, with the amount of money and size of contracts involved in the oil and gas industry, many abandoned farming in search of greener pastures. Not only did private individuals leave agriculture but the government did so as well. A lot of government finances and attention has drifted away from agriculture over the past few decades. Over the past two administrations, there has been more investment in the agriculture sector but it will take a lot of time before we reap the benefits of this. The Buhari administration has put embargos on key crops that Nigeria wants to grow internally but this has proved quite difficult. For example, Nigeria is trying to be self-sufficient when it comes to rice. Despite the efforts of this administration, rice is still being smuggled through the border at Benin, whilst our neighbours in countries like Niger and buying off our rice using their stronger currencies.

So where do we go from here? The obvious answer is to refocus our attention on this sector to make it grow. The onus is not just on the public sector. Private sector individuals are going to play a big part in this. Investment in mechanization, working with cooperatives, processing, warehousing, logistics, and value addition are all areas where the private sector will have to play. In many developed nations, this sector is heavily subsidized, but this is not our reality. The Nigerian government has chosen to focus on fuel subsidies which is the consumption side of the economy and not the production side. There is hope for the Nigerian economy but the private sector should not expect the public sector to carry the load.

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