Tuesday, August 30, 2011

Nigeria's Agro Allied Industry: A Starting Purpose for Enterprise Revolution

In Western Africa, agriculture accounts for an estimated forty% of combined GDP and employs up to 70% of the accessible working population. Agricultural commodities are the second largest export from the region to the European Union, although most product are traded while not any local value addition. This represents a vital failure to produce high-price merchandise which will enhance profitability in agro-operations and offer a lot of-required employment. Exports to newer markets are typically held back by considerations over compliance with international production standards. Further, the region's high transportation costs inflate the worth of agro-product in native markets and lower export competitiveness. The gross outcome of those conditions is that developing economies in West Africa and elsewhere generate only $forty by processing one ton of agricultural merchandise against $180 in developed countries.

Fortunately, this persistently bleak outlook for agriculture across sub-Saharan Africa is gradually starting to change and Nigeria is poised to take the lead in reversing the trend. In the first decade once its independence in 1960, the historically agrarian Nigerian economy contributed sixty% of GDP and a lot of than a 3rd of total export revenue. The country was the globe's prime exporter of palm oil and had commercialised production of many money crops as well as cocoa, cotton, rubber, groundnut and kola nut. Things modified radically when the oil boom of the '70s shifted focus far from cropping and petrochemical exports became the first national obsession. Agriculture was marginalised into a labour-intensive, low-productivity subsistence activity that eventually plunged massive parts of rural Nigeria into abject poverty. Despite many resuscitation attempts over the decades - including the 1972 National Accelerated Food Programme, the 1976 Operation Feed the Nation and also the Inexperienced Revolution initiative of 1980 - the steady descent of agriculture continued till the very end of the last century.

The redirection of agricultural policies affected since the return of democracy in 1999 proved a lot of successful. Below a radical reforms programme, Abuja targeted rural development with integrated plans for agriculture promotion, rural industrialisation and infrastructure development. This integrated approach has yielded tangible results: Agriculture currently leads the country's economic recovery, bouncing back to contribute 42% of GDP by 20084.

Perhaps the most vital thought arising out of this recovery is Nigeria's natural inclination towards farming. Ancient involvement with agriculture and therefore the existence of numerous ecological conditions across the country offers tantalising potential for growth of a flourishing and suitably interlinked agro-allied industry. Nigeria's ambitions for accelerated and inclusive economic growth are contingent on achieving a vibrant agriculture sector that may support in depth down-the-line enterprise development and employment. After all the UN Conference on Trade and Development (UNCTAD) expressly recommends the adoption of a national investment policy to diversify the economy with sturdy concentrate on agro-allied industries. The actual fact that this sector is primed to generate speedy enterprise development in Nigeria is simply undeniable.

Enterprise potential exists in virtually all areas of local farm production. Nigeria currently produces over 100,0006 metric tonnes of kola nut, that finds use within the manufacture of beverages, liquor and confectionaries. However, native processing units are rare and exports are largely restricted to contemporary and dry nuts with very little value addition. Cassava, likewise, has emerged as a serious money crop with untapped potential in industrial use and bio-fuel development. With adequate personal sector involvement, commercialised agriculture will not only aid industrialisation and employment generation however additionally breach the productivity gap and scale back food costs.

In terms of broad parameters, policies for effective development of the agro-allied sector in Nigeria should specialise in a range of key concerns:

* Guaranteeing food security by increasing supply and lowering prices with the particular aim of curbing inflation.

* Enhancing credit access to small farmers and agro-based mostly enterprises at low rates of interest.

* Providing info, support and coaching for rising agro-industries and promoting best practices.
* Increasing productivity through promotion of high-growth models in food processing enterprises.

* Prioritising locally available raw materials over extravagant imports.

* Removing informal barriers to trade and streamlined producing of agricultural products.

* Promoting greater regulatory cooperation among West African neighbours to extend regional trade.

* Reducing tariff on goods and services that support the agro-processing sector.

* Enforcing relevant safeguards for agricultural and price-added food product to protect against import surges.

* Building capacity within the personal sector and promoting public-private partnership in agro-processing industries.

Abuja's intervention in the agro-allied sector must primarily be geared toward creating the proper atmosphere for fast enlargement of domestically-owned enterprises. However, there are serious challenges in this direction. Industrial processing of agricultural merchandise is sort of negligible, existing standards being very basic and typically incomparable with export requirements. Post-harvest losses are also very high in the region, averaging up to fifty%seven for fruits and vegetables and twenty five% for grains. In several instances, losses because of customs delay and difficult documentation exceed applicable tariffs. Labour saving production and advanced harvesting and processing technologies are thus crucial for sustained revival of the Nigerian agriculture scenario. Moreover, economical production and selling systems can prove very important in guaranteeing top quality standards and competitive prices for each domestic industries and export markets.

In terms of Nigeria's long run growth prospects, perhaps the foremost necessary consideration of all is merely the realisation that future prosperity depends not on the yield from its oil fields, but on the harvest of its land.