What budgetary allocation should be for Nigeria’s agriculture sector

RECENTLY, President Bola Tinubu signed Nigeria’s 2024 budget of N28.78 trillion into law, allocating less than two per cent to the agricultural sector. In this interview with EHIME ALEX, an agro-economist, senior lecturer at the Rivers State University, and a visiting professor at Rome Business School (African Campus), Ikechi Agbugba speaks on what an ideal agricultural budget should be.

The ICIR: How would you rate budgetary allocation to the agriculture sector and its performance during the eight years of the last administration?

Agbugba: Agricultural budget cannot be achieved within the short term. It can be taken in phases and segments, from more to less important. Speaking about mechanisation, we can only boost agricultural production if we mechanise. Mechanisation is the automation of production, and this is capital-intensive and should be taken as a priority. The average Nigerian farmer can only achieve the goal of fully mechanising with appropriate financial policies.

It was apparent that the Buhari administration’s budgetary allocation to agriculture fluctuated. Budgetary allocation to agriculture fell under Buhari. The math speaks for itself; agriculture suffered, and food prices soared enormously in Nigeria. I will describe it as insidious.

Under his tenure, records indicated that budgetary allocation for agriculture rose from 1.7 per cent in 2017 to about 2.0 per cent in 2018, fell again to 1.56 per cent in 2019, and 1.34 per cent in 2020 before recording a slight increase of 1.37 per cent in 2021.

Interestingly, in 2022, the allocation to the agriculture sector represented not more than 1.8 per cent, the highest in four years. What more can I say? The onus lies on the government to increase the percentage of its budget allocated to agriculture, and when they do, they will, nonetheless, experience a commensurate episode from the allocation.

The ICIR: What reforms does Nigeria need to make its agriculture sector contribute more to the economy?

Agbugba: Budgetary allocation to a leaking sector is meaningless. The leakages must be blocked, and Nigerian farmers must be encouraged to register; middlemen such as contractors should seldom be used in executing projects and programmes, all things remaining equal. Transparency should be the order of the day. I must also mention that the fertiliser supply policy during the days of former President Goodluck Jonathan was commendable and effective because the government left the old order of doing business.

Please permit me to be brief on this since they are real-time issues. I will list them as follows:

  • Governance: Provide more vital political leadership;
  • Improve access to public communication;
  • Farmers’ accessibility to loans and other incentives with some regulation and accountability;
  • Build technical capacity;
  • Re-educate people;
  • Promote agricultural mechanisation;
  • Upgrade supervision of agricultural initiatives and programmes;
  • Enforce new government programmes;
  • Encourage the usage of biopesticides, biofertilisers, etc;
  • Improve security network;
  • Advocate and enforce circular economy initiatives/establish structures for sustainability.
  • Address transhumant pastoralism and climate change.
  • Less importation and more export.
  • Reconstruction of the irrigation system

The ICIR: Nigeria must address issues of mechanisation, rehabilitation of irrigation facilities and dams, storage, research, and development, which negatively impact farmers’ productivity. How can an agricultural budget effectively cater to this? 

Agbugba: According to the National Agricultural Technology and Innovation Policy 2022-2027, published on the Federal Ministry of Agriculture and Rural Development website, the level of mechanisation in Nigeria’s agriculture sector is among the poorest globally.

Of course, an agricultural budget should provide the policy direction for collaboration among key stakeholders in the agriculture value chain to boost domestic food security and gain access to global markets. There is no doubt that mechanisation, irrigation facilities, research and development, and digital agriculture, among other solutions, are here to stay.

The accounts of Israel and Thailand are good case studies any day. Please permit me to highlight Kenya’s low budgetary allocation for agriculture in the 2022/23 budget, which was criticised by their civil society. The National Treasury set aside over 40 billion shillings (equivalent to over N200 billion) for agriculture despite contributing about 25 per cent of Kenya’s gross domestic product (GDP). I also reckon on the Kenya M-PESA, the fastest-growing fintech in the world.

I will be happy if the Nigerian government can borrow a leaf from Kenya’s account in their 2023-2024 budget, where they committed over 8. 6 billion Shillings for the National Agricultural Value Chain Development programme and 2. 7 billion Shillings for the National Agricultural and Rural Inclusivity Project.

Interestingly, the strategy my team is developing for Africa’s transformation through the agriculture space can perfectly revamp Nigeria’s economy only if we can deploy the needed resources for the six geopolitical zones. The journey could have promised a thoroughfare, but we will get there when possible. We must know who the real farmers are before we can connect to them and channel them to such meaningful interventions—no time to waste on this. We are here to bridge the gap between research and industry.

Through African diaspora groups, especially the African Diaspora Collective, North and South America, and the African Union Secretariat, we are also working closely with educational institutions, especially universities, to champion this.

My advice is not to do things the old way. Comparatively, it is somewhat wise to treat agriculture as a matter of utmost priority for the security and independence of this nation. This is no longer business as usual, I must say.

The ICIR: What should an ideal budget for the agriculture sector look like?

Agbugba: An ideal budget for agriculture must be different for every nation. Take, for instance, the UK government increased government funding to boost farming productivity by more than £168 million. The funding is to drive innovation, improve productivity and support animal health and welfare through greener equipment, robotics, and automation, which is an entirely different ball game for a typical African country like Africa’s giant – Nigeria.

We should have created a robust budget for agriculture when it was ideal, and even now, we have failed the simple yet sensitive test, and stakeholders keep repeating the same blunder. Indeed, income from agriculture can be volatile and unpredictable, as farm businesses are price-takers, and the determinants of the prices they receive can be out of control. It is also the main reason farmers seek additional working capital, as they need financing to meet day-to-day costs. However, agricultural cooperatives and collective action could be an easy way out where it is applied.

Since agricultural development is one of the most powerful tools to end extreme poverty, boost shared prosperity, and feed a projected number of 10 billion persons by the year 2050, may I assert that an ideal budget for a country that is blessed with vast resources from agriculture must be given the utmost priority. In so doing, the crops, livestock, fisheries, and forestry subsectors will begin to offer commensurate returns, and all things remain equal.

If the government is serious about food security, I will be left to adduce that three per cent is too low for a budget allocation and should be placed at least 10 per cent for the first five years as that would do an upward review after that.

The ICIR: Do you have any other advice for the Nigerian government regarding agricultural budget allocation and implementation?

Agbugba: Governments have highlighted priority areas such as security, local job creation, macro-economic stability, investment environment optimisation, human capital development, poverty reduction and social security. Interestingly, the budget is about 27 per cent higher than the 2023 budget. Meanwhile, the President also wrote to NASS, seeking the approval of a $8.6 billion and a £100 million external borrowing plan for critical infrastructure in areas such as power, roads, water, railway, and health.

The sub-national should follow the footprints of the national. Policies are meant to trickle down and communicate from the top. There needs to be more synergy between the top and bottom. At the sub-national level, it’s worse. The budget can be an opportunity to fast-track the growth engine in the agrarian sector, which is undoubtedly dominating employment.

The federal government should borrow some leaves from the approach employed by Southeast Asia, especially Indonesia, because of their economy’s prosperity through palm oil and oil palm, a crop that originated from Nigeria. Both nations had experienced the Green Revolution intervention in almost the same period. This intervention is also referred to as the 3rd Agricultural Revolution, which bordered on technology transfer initiatives leading to significant increases in crop yields.

A breakdown of their model is summarised in the Institutional Quality for Competitiveness, which revolves around social, economic, administrative, and political streams.

  • On the side of the administrative stream, quality (vocational) educational system, streamlined business permit process, and efficient bureaucratic system are underscored.
  • From their perspective on the social stream, they focused on inter-racial/ethnic/cultural harmony, inter-religious harmony, and cultural diversity literacy.
  • On the side of the economic stream, robust intellectual property rights regimes, harmonious regulatory regimes, and open and outward-looking trade policies are highlighted.
  • Finally, political transparency, strong corruption control, meritocratic politics, and open and transparent policy and lawmaking initiatives were spotlighted on the political stream.

The ICIR: Despite being a signatory to the Maputo agreement in 2003 to allocate 10 per cent of its annual budget to the development of agriculture to promote food security and maximise growth, Nigeria has yet to comply with the treaty. What are your thoughts on this?

Indeed, it’s now a matter of priority. Sadly, some of our leaders do not see agriculture as a priority. The President must be committed to its implementation if we want to ensure food security and create more employment.

    It is so stale to retort that food security remains a significant challenge in Nigeria, with millions of persons entrenched in hunger, malnutrition, and poverty. Addressing this issue will require overarching, complete strategies to tackle the root causes, such as climate change, gender inequality, and food waste and loss.

    It was proposed that African countries allocate 10 per cent of their total annual budgets toward boosting agricultural productivity. The signatories agreed that 10 per cent of public expenditure should be spent on agriculture to increase agricultural productivity.

    On Nigeria’s stand, I can only say that change is a gradual process. It takes work to alter entrenched norms that influence who sits at the decision-making table. Continuous engagement with government, communities, and traditional leaders will influence decisions in signing such a treaty.

    This same question was raised during my class delivery at Rome Business School, where captains of industry and passionate leaders were present, and their response is not far-fetched from what I have alluded to. Remember that Nigeria recently dropped its instruments for ratification when the African Union called for African nations to respond to the ratification as that would promote trade liberalisation under the African Continental Free Trade Area (AfCFTA).

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