Nigeria is a diverse and rich nation; one with raw potential, human capacity, natural resources, fertile land and limitless possibilities. The giant of Africa as it were. Nigeria’s economy has suffered a server blow ever since the price of crude oil plummeted last year.
This set back hit various oil producing nations hard and Nigeria was no exception. Nigeria’s downward spiral would have been cushioned had Nigeria diversified its portfolio decades back, as opposed to running a mono-economy focused purely on crude oil exports. The consequences as we can all see, are far reaching.
The naira has all but collapsed against the dollar, foreign investors are franticly pulling out, workers are being downsized in order for companies to actually survive, inflation is rife, and commerce just got painfully difficult.
The giant of Africa is, however, not on this bleak journey alone. Nigeria’s monolithic decline is mirrored by other members of the Organization of Petroleum Exporting Countries (OPEC) i.e. Saudi Arabia and Kuwait, who are all learning a bitter but necessary lesson; that diversification is not only necessary, but essential for any nation’s survival.
Despite the economic decline, OPEC countries like Saudi Arabia still have cash reserves, low public debt and lots of new infrastructure to power its declining economy. This, Nigeria severely lacks.
The United States, Russia, Canada, China and Mexico (all within the top 10 of the world’s oil producing nations) have not felt the economic pains of their OPEC brothers and sisters, and if they have, they have clearly found ways of hedging their losses.
The United States for instance is the world’s largest agriculture exporter followed closely by the European Union and Canada. Despite this, the United States banned the export of its oil and has only recently lifted the decade long ban. This is in light of the fact that the United States produces more oil than Nigeria (approximately 9.3 million barrels per day).
Russia, another major oil producing nation, is also one of the world’s largest metal exporters, specialising in steel, iron, aluminium and precious metals. Russia along with the United States is also a major coal exporter.
Does Nigeria have coal deposits? Yes. Do we have metal ore deposits? Yes. Is our land arable? Yes. Have we harnessed these resources to the best of our abilities? I believe we all know the answer to that.
As Nigeria tries to claw its way out of this self-made pit of economic distress, it should take a que from nations prospering, amidst crisis, to find reasonable alternatives to wealth generation and future prosperity.
Agriculture serves not only as a source of employment and government revenue, it also helps feed Nigeria’s ever growing population, while providing various
industries with much needed raw materials. As it is, agriculture is the largest employer in Nigeria, contributing roughly 35% to the labour force. Therefore, it has the potential to fully transform the Nigerian economy if harnessed diligently and efficiently.
Increasing the capabilities of the small holder farmers will help, in this regard, by increasing Nigeria’s output and employment rate. In rendering assistance to small scale farmers, the government should address areas such as infrastructure, education, finance, technology, and access to markets.
Government and various stakeholders should come together to galvanise the agricultural sector, creating markets that allow the trade of home grown crops and products. An enabling environment along with public private partnerships and various infrastructures should be put in place.
The key word here is ‘specialisation’. Nigeria cannot be a major player and thus compete internationally without specialising in the production and trade of specific cash crops (i.e. Cocoa, palm oil, rubber etc.).
Some of the main advantages of specialisation include; reduction of costs, increase in labour productivity and crop yield, and creation of greater production efficiency.
If we do not produce and focus on substantial products, we run the risk of being bypassed in the world stage by much smaller countries that produce and export certain cash crops in large/commercial quantities.
Ivory Coast, for instance, is known for its cocoa, of which it is one of the world’s largest producers, India for its rice, Uganda for its coffee, Ecuador for its banana, Thailand for its rubber, Kenya for its tea, Brazil for its sugar, and the United States for its corn. Nigeria on the other hand, once a major exporter of palm oil, rubber, groundnuts and cocoa, now lags behind in production of all of the above mentioned crops.
This is largely due to years of mismanagement, inconsistency, poorly conceived government policies, and neglect. Additionally, although Nigeria is the largest producer of cassava in the world, we still have to develop ways to enhance cassava’s competitiveness and desirability in the international market.
As other governments ramp up production, tap into key markets, form strategic alliances, and sign various trade agreements for the greater good and glory of their people, our beloved Nigeria remains ever aloof, much like a spoilt child with a trust fund (in this case crude oil), too lazy to work, innovate or apply itself; thus reliant, stagnant and clueless.
Unfortunately for the child, the trust fund no longer yields as much as it once did, thus the days of plenty are gone. After living a prodigal life, one of economic debauchery and financial excess, the trust fund can no longer sustain the lifestyle the child is accustomed to.
Nigeria is one of Africa’s leading consumers of rice, and also one of its largest rice importers. Rice generates more income for Nigerian famers than any cash crop in the country. Nigeria has to increase the efficiency of local rice production, by supporting, encouraging and incentivising farmers who go into such a venture. We also need to train and educate our people in the art of farming and animal husbandry.
Farmers require ongoing education to stay aware of fast moving developments in management, technology, science and various other skills and fields that affect agricultural production.
Training will help farmers incorporate the latest scientific advancements and technology into their daily operations, reduce food contamination, and the need for chemicals. It will also help them make sound financial decisions and understand the implications of policies on their operations.
The present government should focus its resources in support of specialised large scale commercial farming as opposed to small scale subsistence farming. This will certainly lead to the transformation of Nigeria’s oil dependent mono-economy.
Economies of scale are the cost advantage that arises with increased out-put of a product. The greater the quantity of goods produced, the lower the per unit fixed cost. In order for us to have a competitive edge, we must support the agricultural sector, using our vast population and God given resources to our advantage.
Specialisation, commercialisation, finance, infrastructure, technology, market access and education are all key components of such a change. That coupled with discipline and foresight will lead us down the path of economic emancipation and thus transformation.
In the words of the ancient Chinese philosopher Xun Zi, – “When you concentrate on agriculture and industry and are frugal in expenditures, heaven cannot impoverish your state”. As the garden grows, so does the gardener.
by Chiemezie Okeke-Ojiudu
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