The Ministry of Agriculture received the sum of ₦592.9 billion in the last five years. It is just a fraction of the total budget for the period despite efforts by the Federal Government to find alternatives to oil. As price war and coronavirus disrupt global oil prices and sent economies to the north, Nigeria looked elsewhere to reduce corresponding effects on the economy. Can the agric sector by the bailout? Can it save the nation’s economy from ultimate collapse and quickly help revive the economy from the looming recession?
In the last 20 years, the agricultural sector has served as one of the key drivers of the Nigerian economy, contributing more than 20 percent to the country’s GDP. The sector also employs more than 40 percent of the population – almost 90 percent of such in the rural areas, most especially women.
Despite its contribution to the economy, over the years, the Federal Government only allocated a small portion of the total budget to the sector. Most allocations ended up in the recurrent expenditure, leaving a fraction for capital expenditure.
This is not peculiar to the agric sector alone. Other key sectors of the economy, such as health, education, and housing, also received huge recurrent figures. Compared to other sectors, public spendings on agriculture in Nigeria is low, with less than 2 percent of total federal expenditure allotted to it from 2001 to 2005. This allocation is far lower than spendings in other key sectors, according to a research paper by the International Food Policy Institute.
Diversification, mere paperwork?
Spendings to the agricultural sector within the last five years point to the credibility of the country’s diversification policy. Apart from little or no tangible result, the spendings fell short of various agreements on agricultural policies and commitment made by the Nigerian Government to diversify away from oil. In its Medium Term Plan for 2017 – 2020, the President Muhammadu Buhari-led government’s Economic Recovery and Growth Plan (ERGP) preached inclusive growth through diversification of production, achieving maximum welfare for the citizens by ensuring food and energy security. The Government had planned to use agriculture as a lever to achieve food security, create jobs, and save foreign exchange for food imports.
To achieve this, the Federal Government increased budgetary allocation to the sector by three-digit billions for the first time in 2017. In that year, President Buhari government allocated ₦135.6 billion to the sector.
In 2018 and 2019, the figures increased to ₦203 billion and ₦137.9 billion respectively. Despite this, the contribution of the sector to GDP remained sluggish between 20 percent to 21 percent. The same contributory range in about 9 years. The reason remains that recurrent expenditure still has a huge percentage of the allocation.
Achieving agricultural policies still nightmares in Nigeria
One such beautiful policy is the Maputo Declaration 2003, where Nigeria and other Africa Union member-nations committed to allocate at least 10 percent of national budgetary resources for the agric sector to increase productivity.
Seventeen years on, Nigeria still allocates 2 percent or less on public expenditure to the agric sector. It was only in 2008 that the sector received a boost above the Maputo recommendation – about 12 percent (₦134.9 billion) out of the total federal budget. Even at that, about 48 percent (₦65 billion) of the total allocation went into recurrent expenditure. In 2014, AU Heads of State and Government met to review the Maputo Declaration in Equatorial Guinea – paving the way for Malabo Declaration.
At the end of the Malabo meeting, they upheld the 10 percent public spending target and extended commitment to half the continent’s poverty by 2025, (five years from now) through inclusive Agricultural Growth and Transformation Sustain Annual sector growth in Agricultural GDP at least 6 percent. They believed the initiative will create job opportunities for at least 30 percent of the youth in agricultural value chains and empower million rural dwellers. But till date, nothing has really changed, only a fraction of African nations have achieved the details of the treaty.
Charting way forward
To attain sufficient growth in the agric sector, the Federal Government must implement policies and conforms with international treaties. An example is the commitment of 10 percent of its annual budgetary allocation to the sector. The National Assembly should find a way to domesticate policy actions from the Malabo Declaration. Policymakers must also ensure capital expenditure received enough share.
For all these to work out well, the Government must also match allocation with proper planning and execution strategies. When agric is developed, it is bound to ease the other sectors of the economy. Just as it was stated in the ERGP, agric has huge potential in attracting foreign direct investment, boosting fx reserves. It will thereabout lift millions out of poverty and create job opportunities for Nigeria’s rising population.