Despite what has appeared to be more talk and less action in truly “diversifying the economy” to give more focus on agriculture, the private sector took charge and didn’t do very badly in 2017. The year had both sweet and bitter memories for the agric sector, but in all, was a fairly good year.
Exports improved and “it rained a lot of money”
Yes, it really did seem like a lot of money was pouring down on the agric sector. For most people, the exchange rate was bad news but for agriculture, it was perhaps the best thing that could have happened to many people.
In fact, data from the National Bureau of Statistics (NBS) showed that the country’s agricultural export rose by 177 percent year on year from N8 billion in q3 2016 to N21 billion in q3 2017. The data also showed that cashew, sesame seeds, frozen shrimps and prawns led the agricultural exports within the period.
It is also important to note that a lot of exports do not get captured in the official accounts. Stakeholders in the sector have described the export numbers as an indication that the industry has the potential to be a major foreign exchange earner for the country.
Some big gainers in terms of corporate entities that can be singled out in 2017 include Okomu Oil palm Plc which has seen its stock having a return of 73.56 percent in one year, and Presco Plc whose share price has gained 74.59 percent in the last one year as well.
The Nigeria-Morocco Fertiliser Pact
Nigeria for many years had a reputation for being one of the countries with the least fertiliser usage. Now, not that its “news” for Nigeria to be part of such a list, but the good thing that happened in 2017 is that fertiliser got a lot cheaper! This happened courtesy of the bilateral agreement signed between Nigeria and Morocco earlier in the year and part of it is the fertiliser component for supply of phosphate to Nigerian companies for blending. The Nigerian Sovereign Investment Authority (NSIA) set up a special purpose vehicle, SPV, which entered into contract manufacturing deals with local blending plants at an agreed blending rate. Another deal was reached with Notore and Indorama to supply the urea from gas but the limestone granules come from diverse locations including Okpella in Edo state.
More than half of Nigeria’s 38 fertilizer blending plants had packed up, laying off their staff, but many are now roaring back to life as cheaper, guaranteed raw materials are being made available.
Farmers across the country who have faced difficulty in buying fertiliser where for example a bag of Urea fertilizer was sold for as high as N10, 000, instead of the N4, 500 it was sold in 2015.
Today the fertilizer produced under the presidential scheme, courtesy of the Nigeria-Morocco arrangement, has a factory gate price of N5,500. This is cutting the operational cost of farmers by a huge margin and also helping them to raise their farm yield.
The Rice Boom is “Getting Real”
Many Nigerians, especially those in the urban centres like Lagos have heard so much about local rice production but keep wondering why it is yet to be very visible.
However, the numbers have been showing that things are really improving. The volume of rice exports to Nigeria from Thailand, one of the world’s leading rice producers has dropped sharply between 2015 and 2017, in what appears to be a result of ongoing efforts in the country to reverse the $1 billion spent on rice imports annually.
Data by the Thailand Rice Exporters association shows that 644,131 metric tonnes of rice was exported to Nigeria in 2015, while 58, 260 MT was exported in 2016, and as at September 2017, rice exports to Nigeria stood at 20, 973 Metric tonnes. This represents a 58.5 percent decline between January and September 2016 and the corresponding period in 2017. However, when compared to 2015, Thai rice exports to Nigeria have dipped 96.74 percent.
Surely, rice exports to Nigeria are dropping significantly, even though there is of course, still smuggling.
Commodity Transportation is Finally Getting Modern
It may not be worth celebrating in other climes, but in Nigeria, it was a big feat in March when a tomato shipment from Kano to Lagos was done by rail, the first of its kind in 58 years! In December, another method was adopted with the deployment of a reefer truck for the transportation of tomatoes from the North to South.
The successful delivery forms a crucial part of evolving models for addressing post harvest losses and profitability, particularly for the tomato crop which suffers a 40 percent loss, valued at N72 billion annually, between farm and market.
Nigeria is the 13th largest producer of tomatoes in the world and the second after Egypt in Africa, yet the country is unable to meet local demand because about 40 percent of tomato produce is wasted due to poor packaging, transportation and storage.
Tomatoes transported by road in raffia baskets are heaped on each other, resulting in a significant volume being crushed and rotting due to heat and poor ventilation along the way.
BusinessDay’s Agribusiness and Food Security Summit
But of course, recalling the biggest feats of agriculture in 2017 will be incomplete without including what was unarguably the biggest even of the agric sector this year; The BusinessDay Agribusiness and Food Security Summit.
The summit which held in March, had the private sector baring its mind at the forum which sought to achieve beyond a “talk-shop”. The summit aimed at stimulating practical steps with immediacy in order to save Nigeria’s $5 billion food import bill, the abysmal 60 percent post harvest losses, inadequate funding, insurance, farmer education and the myriads of other challenges.
Young entrepreneurs who are into agriculture, deliberated on a number of key issues during the summit, laying emphasis on the need for regulatory agencies to create standards for local food products so as to ensure agricultural products are competitive in the international market.
Panellists speaking on finance, insurance, and the importance of farmer education, emphasised the importance of agri-business financing as critical to unlocking the potential in the sector and driving growth along the value chain.
There were tons of valuable insights from the summit which no doubt, reflected on decision making and collaborations in the sector over the course of the year.