Increase investment in Nigeria’s Agriculture value chain – Analyst

A speaker and partner at PricewaterhouseCoopers (PwC), Mr Oladele Oladipupo, has called for increased investment in Nigeria’s agriculture value chain, to boost the sector’s contribution to the Gross Domestic Product (GDP).

Oladipupo made the call at the just-concluded Agrofood fair in Lagos.

An agriculture value chain is a set of linked activities that work to add value to a product.

It encompasses the flow of products, knowledge and information, finance, payments, and the social capital needed to organise producers and the communities.

Oladipupo noted that the level of agricultural yield in the country owes largely to the absence of concentration on the agric value chain, despite our possession of vast arable land.

“We have 92 million hectares of land in Nigeria, out of which 82 million hectares is arable. However, only about 32 to 34 million hectares is cultivated.

“In some countries, they do not have up to that amount of space under cultivation, but they do generate more yields, both in terms of crops and livestock.

“The reason a lot of other countries develop better yield than Nigeria is because they are worth more on their value chain, from the inputs to their production, to processing, marketing, and logistics financing etc,  the countries have put in numerous efforts to develop their value chain.

“What we have noticed in Nigeria is that we focus more on production. Once we plant, we just want to reap. Nobody is talking about the quality of the inputs, nobody is talking about how we leverage technology in agriculture, nobody is talking about logistics or warehousing,” he said.

“While we have 32 million hectares cultivated, we are not getting the right value for the 32 million hectares. For the last 4 to 5 years, the Nigerian agriculture sector’s contribution to GDP has hovered between 22 to 25 per cent, but in 2017 it hit an all-time low of 21 per cent contribution to GDP.

“The problem we have is that we have not invested in the value chain. For example if we take a bar of chocolate, only 6 per cent of the value of that chocolate bar comes from production i.e. growing cocoa plants and harvesting the cocoa beans. Only 6 per cent value is in production, the rest is in inputs, transportation, processing, and marketing.

“The efforts of Research and Development that goes into marketing, packaging, production, and management of the value chain accounts for 94 per cent of the value of the chocolate bar. We can actually process the cocoa beans before exporting and get more than double the value we have been getting,” he said.

Oladipupo also condemned the low export income in agricultural produce, in comparison to Nigeria’s increasing imports and demand for foreign produce.

“Nigeria imports $2.9 billion worth of agriculture produce. Our key imports are rice, meat, dairy products, meanwhile, we only export income of about $0.6 billion dollars. And why is that? It is not that we do not produce, we do produce and export quite a lot of raw agricultural products. The problem we have is that we have not invested enough in the value chain,” he said.

“What we have done in PWC in the last 9 to 10 months is to set up a crew, a core group of people to look at the agricultural value chain in Nigeria, dimension that space and come up with insights that people across the entire value chain can look at, use in order to add value to their businesses, increase productivity, and of course, make some profits.

“One of the things we realised early is the dearth of quality data within the agric business in Nigeria. It is a malaise that affects Nigeria as a whole but especially in agriculture. And one of the reasons for that is because of the composition of people that play in that space.

“Over 70 per cent of our farmers are rural farmers and are illiterate and therefore gathering data or analyzing data is not their strong point,’’ he noted.

Oladipupo also called for the input of the findings of science and technology to boosting agricultural production in the country.

“Another major challenges is that a lot of farmers have understood the impact of science and technology in agriculture. Science and technology actually starts from the quality of the seedlings, we have quite a number of research institutes in Nigeria and West Africa, but the question is how do we get the outputs of these researches to the farmer?

“How do we make sure the farmer gets the right kind of fertilizer for the kind of soil and to make sure he gets the right kind of agro-chemicals, pesticides and etc.?

“These are very important inputs that Nigeria and Nigerians need to work into the nation’s agric value chain,’’ he added.