LACK OF INCENTIVES HINDERS NIGERIA’S AGRIC DIVERSIFICATION DRIVE - AGRIC GIST

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Monday, 11 July 2016

> LACK OF INCENTIVES HINDERS NIGERIA’S AGRIC DIVERSIFICATION DRIVE


Inability of the Federal government of Nigeria to provide incentives and create an enabling environment for agro-allied companies may constitute hindrance in the wheel of economic diversification drive through the agricultural sector,

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BusinessDay investigations reveal. Diversifying Africa’s largest economy away from oil will require paying more attention to establishing agriculture, which constitutes bulk of the country’s non-oil exports, and value adding manufacturing export more competitive, experts say. The sector contributed an average of 22 percent to Nigeria’s GDP in the last five years. In 2015, its contribution to nominal GDP was estimated at N19.64 trillion, BusinessDay Data shows. However, government’s inaction in providing good infrastructure and incentives for agro-allied companies has made it difficult for agricultural produce to compete favourably with imported products, as high costs of production filter through to prices. “The government of the day is out saying all sorts of things on how it intends to leverage the agricultural sector for economy diversification, yet no one is looking at the entire value chain. No one is looking at addressing the challenges of transportation and storage, which render most agricultural produce useless,” a government official said on condition of anonymity. Local players are not incentivized, it even makes more business sense to import some items produced locally in some cases,” the anonymous government official said, as she poured out her emotions in an interview with BusinessDay. The government official stated that government must rise to the occasion and do more in building a vibrant, competitive and profitable agricultural sector if the sector would play a role in diversifying the economy. Sliding crude prices have mounted pressure on oil producing countries from Saudi Arabia to Angola, and are revealing deep cracks in the ranks of Africa’s second largest producer, Nigeria. This has prompted policy makers in the estimated 180 million countries to open up other sources of revenue inflow to sectors like agriculture, information and communication technology (ICT), among others. “Government has not supported the agricultural sector sufficiently that it may grow and be profitable,” Taiwo Oyedele, a partner and head of tax and regulatory services, PricewaterhouseCoopers, said, in response to questions. “The few investors in the agricultural space could make 50 times more in yields than they do now, but government’s failure to create an enabling environment for agricultural investments to thrive is clearly at the country’s detriment,” he said.

BY........ JOSEPHINE OKOJIE and LOLADE AKINMURELE

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