Nigeria Must Export to Survive

Institute of Chartered Shipbrokers
  • Nigeria Must Export to Survive

The president of Federation of Agriculture Commodities of Nigeria (FACAN), Victor Iyama, in this interview with Bukola Aroloye talk about the plight of farmers, his view on recapitalisation of Bank of Agriculture and what government should do in the sector.

What is your view about the recapitalisation of Bank of Agriculture; how effective has it been?

They are still in the process and by the time they finish the reconstruction of the board and the recapitalisation it will surely benefit the stakeholders. They just constituted an interim board and we can’t start assessing them.

How are the farmers been able to access money?

Farmers generally still have problems with access to fund and you know that all the intervention which would bring the interest quickly is not easy to access except of those who are sometimes lucky to be involved in contract farming. Before then, they were providing collaterals and all that to the principal. The issue of access to funding is still a problem. How many people can do anything meaningful without fund, even with prohibitive high interest regime? As far as I am concerned, I strongly believe until CBN starts changing policy in this country where the MRRA take over around 14.5% and where the central bank is selling treasury bill at about 18.5% to twenty percent, how can people have access to fund to do anything meaningful? Because if I were bank myself why should I give out money even at 28%, take all the risk when I can easily jump into CBN in the name of treasury bill and be earning 18.5% to 20%? We are not encouraging anything in this country. They are quick to compare with China and Japan. In all these places, what is MRRA in Japan? What is MRRA in China? Look at all those countries and yet they will be talking of farming, small scale industry, even industrialisation. Take Nigeria back to the early 70s when we really had industrial growth, when we had Bata, Lennnard, and Dunlop when most of these were agric -based industry. Where are they today? But then MRRA in Nigeria is about 2% to 2.5% and lending rate about 7.5%, so take Nigeria back to those days and what it is now. No infrastructure.

What are the things your federation is doing to make government and farmers get the policy of exporting foods outside, especially yams? Isn’t government going to be the sole beneficiary of the gains?

Well, export generally is of benefit to everybody both individual and government. Even the countries we are on the same level are doing far better in export than us which would not have been so if they had followed what we have been preaching for years. But today, we are talking of oil. I remember in 2004, 2005, I made a representation telling them that it was time to develop the non oil sector especially agriculture, especially when we had excess crude money that they were flushing away. We suggested to them that they should put it back into agriculture. If they had done that, by now we would have become the next exporter of rice, fruits and vegetables.

People have been shouting about yam and we are still the largest producer of yams in the world, but we could have multiplied our production by now. We must export to survive, because if we give oil five years or 10years it would be consequential. Land would never finish, especially our fertile land in Nigeria, as far as I am concerned, some people are saying how can we be exporting yam? More people will come into the business. As long as we have good infrastructure and all that to back it up. People keep talking, youths are not ready. Youths are now ready for farming because they now know there are no jobs. We have been preaching to them youth are ready, but they cannot do things like cocoa for now because it takes long time to grow, but crops like sweet potatoes, rice, beans, sorghum, cassava, vegetables, all these can also be taught in school. I am happy with what is happening in oil and gas now because our government is begin to think and diversify and we need to go back to our real goldmine which.

What more can the government do to get other stakeholders to make Agriculture the cornerstone of our economy?

The government needs to involve the stakeholders in the bank which is a welcome decision and we are waiting for it. We know that before the end of their first tenure, they will ensure everything will be done. I am looking at between now, January, February, we would have seen the bank to have been fully restructured. And that is all we are waiting for because we need a special bank to fund Agriculture. It is the bank the farmers will go to, and know that they can get money for 5%. Because in Japan they can get for 1%, in China they can get for 2% but we are not even looking at that even in some cases in Japan they can even give you at 0%. as long as it is agriculture Government also has to strengthen the insurance scheme in Agriculture too, because we really need it . If the insurance scheme is well strengthened, the farmers will not have to take their great grandfathers’ properties to use for collateral before they can borrow money.

About the Author

Samed Olukoya
Samed Olukoya is the CEO/Founder of investorsking.com, a digital business media, with over 10 years' experience as a foreign exchange research analyst and trader. A graduate of University of East London, U.K. and a vivid financial markets analyst.

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