Thread by @DavidHundeyin

Feeding Nigeria’s Exploding Population - A Fixable Problem

In February 1989, General Ibrahim Babangida’s administration commenced the Export Prohibition Act, 1989. Under the terms of this Act, yam, cassava, rice, maize and beans were forbidden from being exported out of Nigeria.

The government at the time believed that food was expensive because it was being exported by middlemen looking for USD income over naira. Closing the doors to export would supposedly force them to sell to Nigerians, making the commodities more accessible and cheaper.

In hindsight, it achieved nothing and became a nasty legal surprise to future exporters, as former Agriculture Minister Audu Ogbeh found out while trying to launch a yam export initiative in 2016. independent.ng/audu-ogbeh-rot…

This policy failure provides lessons in what Nigeria’s Agricultural policymakers and industry players should and should not do. First of all, they should start proactively moving to opportunities instead of merely reacting to problems. Here’s how that works.

@PwC_Nigeria estimates that there is over $900bn of so-called “dead capital” trapped in real estate due to Nigeria’s opaque Land Use Act. Just repealing the LUA and creating a transparent land ownership system would transform the agric value chain without any state intervention.

If Nigeria’s agricultural policy makers can view Nigeria’s economic, geographical and demographic circumstances as opportunities rather than problems to fight policy battles against, the country stands to gain a lot including cheaper, more plentiful food.

Despite Nigeria's growing and well publicised food crisis, agriculture's share of agricultural contribution to GDP as at Q1 2020 stood at approximately 22%, driven in large part by secondary agric (food processing).
pwc.com/ng/en/assets/p…

This is because first of all, practically all large-scale secondary players in the Nigerian agriculture value chain (brewers, millers, processors etc) have turned their supply chain into a win-win by making extensive use of contract growers.

Medium scale processors such as Kaduna-based Tomato Jos, have found success hrough partnerships and creative financing. The company raised $4.2 million from Goodwell Investments in May 2020.
qz.com/africa/1858646…

Government policy must as a matter of urgency, be reviewed to classify Nigeria's food processors as systemically important institutions, and stop using them as targets for cash shakedowns and multiple taxation. Nigeria's food security may depend on it.

Processors themselves need to replace walled-off infrastructure and contract-grower silos with increased collaboration.

The SEC also needs to do a more robust job of weeding out fraudsters who push nonexistent or oversold agric investment products to retail investors.

Perhaps the most important element of a new era of data-driven decision policy making is that government and investment budgets will follow the numbers and be allocated to the parts of the agricultural supply chain where they are actually needed.

Cross River State for example, which loses 45% of its annual harvests to low storage and processing capacity, should have invested in grain silos, processing infrastructure, and rural roads and railways instead of a disused $450 million tourist resort.

Investment decisions should not be based on general assumptions and gut feelings. Comparative advantage and competitive advantage must be at the centre of all investment decisions and regulatory liaisons to ensure maximum chance of agricultural industry growth and food abundance.

In pursuit of the UN’s 2030 goal of Zero Hunger in Nigeria, these are some factors that decision makers must take note of. These things have not always been done in Nigeria, but that is not necessarily a problem. It could also be an opportunity.