For many a keen observer of the activities in the agriculture sector of the Nigerian economy, it is obvious that a lot is going on that deserves the commendation of the Central Bank of Nigeria (CBN) especially since the coming on board of the Governor, Godwin Emefiele and his management team. The policy to put back agriculture on the nation’s economic schedule, after years of neglect, has proved to be a worthwhile one that has, to all intents and purposes, achieved the expectations of the brains behind it.
Undoubtedly, the agriculture policy of the CBN is taking a pulsating pace in its drive to revolutionise the sector. The general idea is to restore the sector to its pristine glory of making vital contribution to the expansion of the nation’s economy.
Even the most intemperate critics of the Emefiele messianic trust in the sector, admit that quite a monumental lot has been achieved in so short a time to deserve the celebratory mood in official circles and even among the farmers themselves who acknowledge that they have not had it so good in a long time. The recent unveiling of the rice pyramids in the Federal Capital Territory (FCT) is a pointer to the huge success the policy is recording in the sector. The event was an opportunity for stock-taking, an evaluation of the policy in the last six years. And the result is commendable even by those who initially did not give it a chance.
Like most pacesetters with a mission, when Emefiele assumed office as the Governor of the Central Bank of Nigeria (CBN) after many years as a retail banking guru, he put forward a policy he believed will nudge the nation’s economy in the right direction. The thinking was that the apex bank was immensely positioned to push the economy, broaden and expand its scope to ensure that other sectors, outside oil and gas, played their roles in enhancing its growth potentials.
It is important to note that before his appearance on the scene, the economy was bugged down with a myriad of problems which saw the nation itself sluggish in its effort to keep pace with other economies including in Africa despite the fact that it was, on the face value, the largest economy in the continent. These problems included a mono-cultural dependence on oil as a major source of foreign exchange to finance development strategies and policies.
Experts confirm that the country was, majorly, import-dependent and some of these imports were items that could be conveniently produced locally. The drain on the scarce foreign exchange was inevitable as food imports alone took a huge chunk off the foreign reserve. The import of agricultural products like rice, maize, wheat, palm oil, cotton that before the discovery of oil were produced in the country with excess for export, were piling pressure on the foreign reserve, depleting it and at the same time affecting negatively the value of the nation’s currency, the Naira against other currencies.
It is from this perspective that a dispassionate assessment of the strategic thinking of Emefiele ought to be carried out. His agriculture policy is essentially geared towards diversifying the economy by refocusing attention on agriculture and other non-oil sectors. Prior to his coming, the apex bank was concerned more with monetary policies and financial systems stability. This was the thrust of the argument of his critics who thought that he was treading on unfamiliar terrain.
But so far, with the massive impact of his policy on the agriculture sector and, in particular, its contribution to the nation’s Gross Domestic Product (GDP), Emefiele has proved his critics wrong. The revolution going on in the agriculture sector through the Anchor Borrowers Programme (ABP) that has returned the glory of farming, not as a way of life, but as strictly business enterprise is commendable. As a critical agricultural policy, the Anchor Borrowers’ Programme is, today, a catalyst that has energised the agricultural productive base of the nation.
It is essentially a major part of an economic plan designed to uplift the economy, create jobs, reduce reliance on imported food and industrial raw materials, and conserve foreign exchange. The initial focus was to encourage small holder farmers who produce to feed the agro-processing plants that were beginning to emerge through a sustained financial intervention by the CBN.
The closure of official foreign exchange window to 43 items demonstrated the commitment of the apex bank to ensuring that businessmen in the agriculture sector had a return on investment healthy enough to sustain them in business and also enhance their contributions to the growth of the nation’s GDP.
Has that been achieved? A few statistics will serve to illustrate the positive trajectory of the policy. As at the time the ABP was instituted, the rice farmers, mostly engaged in subsistence farming, were doing it as a way of life. Today, as at the last count, the policy has produced 20 million rice farmers in the 36 states and FCT who are in it to make their own contributions to the economic development of the nation. Before 2015, the country had a mere six rice mills. That has increased exponentially to 50. The unveiling of the 13 pyramids containing 13 million bags of rice is one more proof of the revolution in the sector. It is also one of the many achievements of the CBN-funded Anchored Borrowers’ Programme,
From 2015 when the policy was put in place, national output has increased from about 5.4 million metric tonnes to over nine million metric tonnes in 2021. Similarly, the CBN, in collaboration with the rice farmers, has also significantly improved the productivity, per hectare, of the smallholder farmer from about 2.4 metric tons per hectare in 2015 to five metric tonnes per hectare in 2021. As at the end of December 2021, the CBN had financed 4,489,786 farmers that cultivated 5,300,411 hectares across 21 commodities through 23 participating financial institutions in the 36 states of the federation and FCT.
The emerging situation of commercial rice farming, in particular will, immeasurably, drive down the price of rice at the local market and discourage demand for foreign rice. It is also expected that local production of the commodity, in the long run, will expand so as to benefit from the African Continental Free Trade Area (AfCFTA), a drive that will register Nigeria as a net rice exporter while at the same boosting the GDP in ways that were thought not possible going by the policy thinking in the sector before this time.
Gilbert is an economic commentator based in Abuja