2 weeks ago
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By Daniel Kanu
Economist, former World Bank consultant, former Finance Commissioner, former Provost, Abia State College of Education, Technical Arochukwu (ASCETA) and Director General, Agribusiness, Michael Okpara University of Agriculture, Umudike, Abia State, Dr Phillips Nto, in this interview with Sunday Sun, speaks on Nigeria’s economy and the way out of the present economic strangulation and hardship, among others. Excerpt:
As the DG, Agribusiness Incubation. Ccentre, Michael Okpara University of Agriculture, Umudike, do you think the budgetary provision for agriculture in the 2025 budget is realistic, given our challenging food security?
My concern is not the provision for agriculture and other sectors of the economy, but the implementation of the budget itself. The N47.90 trillion budget allocated about N826.5 billion to agriculture, N4.9 trillion to defence and security while the sum of N4.06 trillion, N3.52 trillion and N2.48 trillion were allocated to infrastructure, education, and health sector respectively. A little review and analysis will show that all those sectors have direct bearing on agricultural productivity. If the budget for defence and security is well implemented, security will be restored and farmers in the IDP camps in the north will go back to the farm. Also, the amount of money spent on infrastructure will ensure a well-developed transportation system and a well-developed energy sector. This will enhance agricultural productivity.
To achieve food security, all the ancillary sectorial budgets should be well-implemented so as to stimulate growth in the agricultural sector. You do not necessarily need to put the money directly into the agricultural ministry to achieve food security and independence as other sectors provide the required stimulant and catalyst. For me, the provision in the sector is realistic as what farmers need from government is not acquisition of land or labour but security, good road and transportation network, uninterrupted power supply for processing and storage as well as good health sector. In short, all that’s required is enabling an environment. Luckily, agriculture is in the concurrent list, so all the 36 states and 774 local governments ought to provide support to develop the agricultural sector.
How can the nation achieve the much touted food security?
I feel ashamed when we continually talk about actualization of food security in Nigeria. This is a country that did it before independence and immediately after independence. This is a country that is blessed with enormous agricultural potentials contrary to what is obtained in other countries that were able to achieve food security. I like comparing Nigeria to Israel that prides herself as land flowing with milk and honey. Nigeria has 70 million hectares of agricultural land while Israel has 410,000 hectares with a population of about 210 million and 9.5 million respectively. Israel is in an arid or semi-arid region but depends on water recycling while Nigeria has good climate condition and water for irrigation. Everything favours Nigeria in terms of agriculture as against Israel but ironically, Israel ranks 24 while Nigeria ranks 107 in global food security index. The difference is that Israel uses their brain while we depend on oil in Nigeria. To achieve food security, Nigeria needs to formulate the right policies. I am a teacher and researcher in an agricultural university. Can you imagine that departments like soil science, animal science and agricultural extension get only about 2 or 3 students in a session? How do you achieve food security when young people don’t want to study agriculture? Everybody wants to study medicine, law, engineering, etc yet you want to eat every day. Let the government stimulate the sector by granting full scholarship and bursary awards to those studying agriculture. NELFUND can do it just like TETFund is also granting special encouragement to agric universities. Those who graduate can be given incentive to start their agricultural business. Let the government pay serious attention to the agricultural sector. Money from the oil sector should be used to develop agriculture. What is required is the right policy . Some of us that have vast experience and knowledge can assist, so let the government provide us with a platform like Agricultural Summit.
Recently, the Federal Government gave waivers for importation of some grains, including rice. Does such a policy not negate local production?
As I said earlier, we have the potential to grow any crop in Nigeria. As a politically sovereign nation, we should also aspire for agricultural and food sovereignty. I am not against granting waivers to import those food items we don’t have comparative advantage on; but not rice that can grow in so many parts of the country. I conducted a survey on rice production in the southeast; I discovered that Abia and Ebonyi states have a lot of land for rice production that can sustain rice consumption in the whole Southern Nigeria. What is required is just government’s support. Obviously, the policy of granting waivers will negate local production as most of the local farmers do not have technology to compete with rice farmers in Asia. Let the government put in efforts to develop the agricultural sector.
How or what should be done for farmers to accelerate food production in Nigeria?
I stated this earlier, security, so that farmers in the north that are now being sheltered and fed in IDP camps can go back to their farms. In the south, where you have inter and intra communal clashes, state government should take steps to resolve them without shifting such blames to National Boundaries Commission. If you have security, you have good infrastructure, even in the rural communities with good school and hospital obviously, food production will be stimulated. So many rural farmers migrate to urban areas not in search of greener pasture or quality life but to run away from being conscripted to join community militancy or fight communal war. Also, local government authorities can curtail livestock destruction of crops by herders as it was before.
Experts are pessimistic over the pledge by President Tinubu to bring down inflation to 15 per cent. How realistic is this?
(Laughs) I want to be optimistic in this case. I want to be positive so that the government will be spurred to act in a manner that will help in the realization of the 15 per cent inflation. But the question remains how inflation can drop from over 35 per cent depending on the sector to 15 per cent? Has the government laid the foundation? How is it possible when we depend on importation for virtually everything we need? According to my secondary school economics teacher, inflation occurs when there is more household income so that there is a rise in consumer spending. I believe that the current inflation in Nigeria defies my teacher’s postulation. I don’t think there is an increase in household income. I don’t think that household spending has increased. I also don’t think that there is too much money in circulation. But I think there is a gross decline in food items. The current inflation is induced by lack of productivity especially in the agricultural sector. The current inflation also has to do with over-dependence on importation, which has weakened our currency. To realize 15 per cent inflationary rate will be a mirage if we don’t go back to agriculture. It will be an impossible task if we don’t encourage local production so that naira can be strengthened through export to balance our trade. Recall that during the Agricultural era, ships used to come from Europe, Asia, America etc, empty to carry Agricultural raw materials back to their countries, but ironically, the reverse is the case now. Ships that bring goods to Nigeria go back empty.
News coming out indicates that manufacturers are no longer borrowing from banks as a result of high interest rates. How can these economic issues be resolved based on the Tinubu reforms?
There is a wrong implementation of economic principles and theories. Borrowing at a high interest rate to manufacturers discourages formal lending. I see misapplication of economic theories on the side of the Central Bank of Nigeria in the issue of pegging interest rate to the lending banks. The possibility is there that CBN may have adopted monetary policy of raising interest rates so as to reduce money supply, which in turn will reduce the amount of money in circulation and money demand by manufacturers. This has serious consequences on the economy.
When manufacturers borrow at high rates, it will increase the cost of their products. The Federal Government should set up special intervention funds for manufacturers, especially micro, small and medium enterprises. The intervention should be disbursed to genuine manufacturers with known addresses and guarantors as well as areas of business. It should be a revolving loan that should attract a low interest rate. Such will boost economic activities and create jobs. The beneficiaries should know that the loan must be repaid and thus should not take it as their share of national cake. Banks are business ventures, so they cannot offer tangible loans that can help small manufacturers. Other forms of low interest rates borrowing can be activated from bank portfolios to micro,small, and medium manufacturing enterprises as I know that large manufacturing corporations can survive under any interest rate regime. High interest rate encourages importation as foreign manufacturers get funds at low rates. Let CBN also float interest rate as it is done in exchange rate since the country is heading for liberal economy.
Nigerians feel that the Tinubu reforms are harsh and the cause of hardship in the land. Are the reforms what we need, or is the problem with its implementation?
Nigerians are suffering unimaginable difficulties. Many families go to bed hungry and depressed. The poverty and unemployment rates are ascending in geometrical progression. Nigeria is unarguably the poverty and hardship headquarters of the world. No doubt some of the Tinubu’s reforms are good, but there are some that are not necessary for now. You can’t carry out reforms in all the sectors of the economy at the time. It leads to economic woes to withdraw subsidy from petrol and at the same time liberalised exchange rate for a country that is import dependent. Citizens pay virtually for everything whether for production or consumption. Every aspect of our consumption or production life is taxed. POS operations that recently provided employment for teeming youths are being charged exorbitantly. I believe that to achieve economic reality, the reform is imminent, but there is a need to give it a human face. Recall, a surgeon operating on a patient, must give anasthesia to reduce the excruciating pains temporarily, by implication, the pains are gradually introduced while pain relivers are frequently administered to cushion the painful situations that arise from the surgery. Harsh economic policies or reforms take the same pattern. The economic team should realise that many may have died before the reforms start yielding fruit. So many things need to be put in place before the reforms. All these policies throw more people below the poverty line. Poverty they said is defined as those living below one dollar per day, but by this definition, it is clear that more households can not provide N1,600 for a day. With the current inflation of 40 per cent , the one dollar or its equivalent of N1,600 cannot sustain an average household. President Tinubu may have good intentions, but members of his economic team may not be vast in the implementation of his economic policies.
What are the low hanging fruits for the government in her efforts to bring a turn around on the economy?
So many! I said so many low hanging fruits. Agriculture and agribusiness are number one. From my findings since my appointment as Director, Agribusiness Incubation Centre by the visionary Vice Chancellor of Michael Okpara University of Agriculture Umudike, Prof Maduebibisi Iwe, so many people have shown interest in agriculture. During our advocacy over the radio programme tagged Farmers Friday , we get a lot of feedback. The questions Farmers ask encourage us more, but getting support from stakeholders becomes a challenge. Let the economy be diversified towards the agricultural value chain. Agriculture and agribusiness provide a long value chain. The money that is borrowed from multilateral bodies should be ploughed towards agricultural development, not to poor viable sectors with low revenue generation index.
Another low hanging fruit is youth development through education. Nigeria has enterprising youthful components, and they constitute the majority of the population. Nigerian youths are good in ICT, sports, entertainment, entrepreneurship, etc. Let the government formulate policies and programmes to develop the innovation spirit of our youths.
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