…Speech Delivered by Dr. Debo Akande on the 86th Birthday of H.R.M Oba Murtala Adebayo Akande (MFR) and 18th anniversary of Splash 105.5 FM, Ibadan on the 22nd of July, 2022 at the Alumni Hall, University of Ibadan
I am humbled and delighted to be here today to celebrate our father, His Royal Majesty the Ekarun Olubadan of Ibadan land, Baba Bayo Akande (eeeepe fun wa), and to deliver the 18th anniversary lecture at this epic occasion in this great citadel of education.
I wish to thank everybody present here today, both physically and virtually, for their participation. Your presence shows that you share a deep interest and commitment to development discourse around the renaissance of agricultural industrialization and national development.
We chose a lecture topic that resonates strongly with our country’s existential situation. For several decades, we have struggled to develop a nation consistently focused on economic development and growth. I am deliberate in using both economic growth and development separately; I will elaborate more on why this is important.
In this part of the world and in our day-to-day use, even among policymakers, we erroneously interchangeably use both economic growth and development as one area of discourse, and this reflects even in decision-making in our country.
Although both are very related, they are distinct concepts. Economic growth focuses on the quantitative increase in a country’s production of goods and services, often measured by GDP. Economic development broadly implies improvement in the overall well-being of a population, the standard of living, quality of life, and progressive changes in the country’s socio-economic structure.
Our narrative as a nation has been that of one that has struggled with a systematic and consistent economic growth strategy and inability to translate any economic growth that has occurred in history into economic development. Poverty reduction, which is one of the primary goals and measurements of economic development, is a major paradox to economic growth in Nigeria. The poverty and economic growth paradox in Nigeria is not new. During most of the periods that Nigeria’s economy was growing, the poverty level was also high.
Between the late 1970s and 1990, Nigeria’s poverty level, which was already 27%, subsequently jumped to 46% in 1996, and it currently stands at 40.1%. Nigeria represents 10% of the total world extreme poverty. If we compare Nigeria to a country like Indonesia, it is rather the opposite of what we are experiencing in Nigeria. During the same period, Indonesia’s economy was growing consistently at an average of 3%, and they were able to reduce poverty by 20-30%. In the 1990s, through cotton to garment industrialization, Indonesia created more than 100,000 new jobs within the garment industry and not on the farm.
Indonesia’s poverty level is currently 8.5%. Its per capita national income rose from $200 in 1965 to close to $5,000 today, while Nigeria’s is around $800. Today, more than 50% of Indonesia’s exports are manufactured goods; in contrast, Nigeria’s manufacturing contribution has never risen above 10%.
So, how did this nation with so many similar indicators as Nigeria do it? What did they do differently from us? Primarily through what the academics refer to as sectoral sequencing, development is generally achieved through robust agricultural development, industrialization of the Agricultural sector, and expansion to other industrial sectors, especially for the economy with agrarian and agricultural comparative advantages, even those that are not agrarian driven economy eventually focuse on reverse sequencing development that priorities agricultural industrialization as being embarked on by UAE recently.
So let me delve a little into the historical context of our agricultural sector in Nigeria, and we will see the missing link—or, as my boss (HE Makinde) will say, we made a curve that created the limitation in harnessing our agricultural sector for our national economic development.
How did we get it wrong? Where did we get it wrong
Colonial and Independent: As early as 1950, towards 1960, the classical development economics theory and agricultural growth were seen as the key pillars of our economic and national development (FAO 2010,5).
The assumption during the period was that diverse surpluses from the agricultural sectors, such as labour, lower food prices, foreign exchange earned by agricultural exports, or forced savings on agriculture, were transferable from the agricultural sector to industrialisation. But industrialisation where?
Most policies during the colonial period were focused on issues that were of paramount importance to the colonialist rather than for the country, with the encouragement of output growth to satisfy the demand for raw materials in Britain.
The primary emphasis was placed on a policy that strengthened forest matters, which is of paramount importance to the Colonialists, and there was less emphasis on food and animal production, which would be crucial for the local community. Iwuchukwu and Igbokwe (2012,11) noted that the impact of the policy was reflected in the fact that during this period, until the end of the colonial era in the early 1960s, there was only one documented agricultural scheme termed “Farm Settlement Scheme” that evolved in Nigeria. The British established plantation-style farm settlements focused on cultivating cash crops like cocoa and oil palm. These settlements were designed to generate revenue for the colonial administration through taxation of agricultural products and exports.
There was limited private sector involvement, which was partly due to perceptions about the capacity and capability of the private sector to drive the growth agenda of the agricultural sector. The private sector was generally considered weak to take on the task, with the lack of organisational capacity, access to capital and human resources, and incentives to make large, risky, and unattractive investments in the rural areas (Lundy 2002, 2; Dorward et al., 2019,14).
The state’s intervention during this period generally focused on price intervention (through input and finance subsidies and produce price stabilisation and support) and organisational intervention (through parastatal, state-sponsored cooperatives, and agricultural finance organisations) (Dorward et al., 2019,14).
The first missing link: The very high involvement of the states during this period and the lack of consideration for the private sector’s involvement along the agricultural value chain, limited the implementation and did not allow for the approach’s sustainability, as most states’ machinery in the developing region became inefficient during this period. Political interest overshadowed national development interest.
Between 1947 and 1954, the four marketing boards in Nigeria mobilised nearly 120-million-pound sterling, over 100-million-pound sterling (net) of which has been realised as trading profits in the four commodities (Cocoa, Palm, Groundnut and Rubber), while the import duties accounted for only 93.5-million-pound sterling and export duties totalled only 56.7-million-pound sterling in revenue (Helleiner 1964, 584) within the same period.
The accumulated fund from this period until the mid-1950s was used for agricultural development projects and the construction of roads for market access. The fund was also used for research and development of key crops for improved production, distribution of improved varieties of seeds, stores, and cooperative marketing schemes (Helleiner 1964, 594).
Second missing link: Our focus was on the export of raw commodities, small-scale processing of agricultural products, both for local consumption and exports, development of structured commercial agriculture for exportable raw commodities, and fragmented systems for our food systems.
There was, however, a shift in the approach from commodity-specific to regional-specific operations from 1954 onwards. The marketing boards were separated based on the different regions where they were produced in Nigeria. The separation was influenced by the Nigerian constitutional review of 1954, and the 1957 Constitution that followed, where the British colonialists gradually devolved sovereignty in Nigeria to regional governments, and extra power was vested in the regional governments. As a result of the changes, each regional marketing board took over the responsibilities of handling the exporting of all products within its region.
The regionalisation of the marketing board brought a decline in barter regarding trade and a reduction in the exporting prospects. Between 1954 and 1961, the total accumulated revenue of the marketing board was less than one-quarter of the size of the aggregated trading profits of the previous seven years (Helleiner 1964, 585).
This decline came because the marketing board’s primary objective shifted under regionalisation from ensuring price stability and subsidising agriculture to supporting infrastructural building in a different region.
Third missing link: The infrastructural development during this period was urban-biased, and this became worse as the nation eventually focused and channelled all its energy to Oil exploration to the neglect of the agricultural sector.
Independence to the 70s: From Independence, the focus of Nigeria’s government policy shifted from the extraction policy of the colonial era to export-led growth and import-substitution policy for industrialization. This policy was put in place to replace the foreign importation of domestic goods and increase the local citizen participation in the engagement of employment in diverse areas across the value chains, in the production of goods and services for domestic needs.
This policy influenced several interventions on poverty alleviation and rural development in Nigeria. Some of these interventions include the National Accelerated Food Production Program in 1972; Operation Feed the Nation (0PFN) in 1976, which was launched to bring about food sufficiency in the country through the involvement of all citizens; provision of input by the government and making use of all available lands in the rural and urban areas for agricultural purposes. Other interventions include the River Basin Development Authorities (RBDAs); this was established in 1976 to boost economic growth through the development of irrigation and rural infrastructures. And the Green Revolution Program (GRP) was created in 1979 to support the increase in production of raw materials for food self-sufficiency and export ( Ayoola, 2001; Iwuchukwu and Igbokwe, 2012,13).
Fourth missing link: The policy and these programs had an impact on the seasonal increases in agricultural output during the period. However, the value chains in agriculture were handled in isolation, with little attention to comprehensive and holistic management of rural agriculture along with its value chains and minimal focus on industrial agriculture.
1970-1990s: By the 1980’s Government and public-sector dominated approach of the 1960s and ’70s came under criticism because of their poor performance. It was only able to cater for a small number of the population in Nigeria, even when the country was not as densely populated. Dorward et al. (2005, 80) noted that during this period, large government expenditure in Nigeria did not lead to significant development. In an ODI report (2006, 7), by 1982, structural adjustment was introduced to most of the developing countries as part of the global economic agenda. The use of agriculture as an instrument of development was relegated in favour of other approaches to development like open economy industrialization to accelerate growth and cash transfer or workfare programs to reduce poverty, focus on macro fundamentals and promote the role of markets force as against the sectoral policies under the import substitution industrialization (De’Janvry 2010,17).
Most of the existing State-led support collapsed under SAP, and the governments reduced public expenditure and support for public services.
Fifth missing link: The shift in policy and practice under SAP created a substantial institutional and infrastructural support gap for agriculture, generally in the developing region (De’janvry 2010, 32).
Nevertheless, some countries in SSA went back to engaging in some forms of state-led approaches after the implementation of SAP due to the alluded failure of the market approach under SAP.
Where we are
Overall and in general, while there have been efforts at times through accidental means, Nigeria has rarely been deliberate with its policy, program, and finance regarding the industrialization of its agricultural sector; rather, we have been strongly focused on developing the agricultural sector for the exportation of raw commodities and support for food security.
I have heard statements like, “Agriculture accounts for a substantial 25% of Nigeria’s Gross Domestic Product (GDP)”. The measure of the growth of countries should not just be GDP. Nobody eats GDP…. Akinwunmi Adesina. How does your GDP translate to economic development?
In Q4 2024, Nigeria’s agricultural exports were valued at N1.54 trillion; however, they were primarily from raw commodities and not a single major processed product. Superior-quality cocoa beans were the largest agricultural export, contributing N836.2 billion, followed by standard-quality cocoa beans (N269.3 billion) and sesame seeds (N202.9 billion).
We also say agriculture provides employment for approximately 48% of the labor force in Nigeria.” What kind of labor force? Those who have been entrenched in poverty for decades. The sub-regions of this country where they have prided themselves in the highest labor force in Nigeria are the same regions consistently with high percentages and number of poverty consistently for decades. In the North East and North West, wage jobs account for less than 10 per cent of total employment, while almost two-thirds of the population remain in farming (WB 2016,73). This is the same region with the highest poverty rate. I’ll be concerned with such a labor force.
The majority of the players in our agricultural sector are smallholder farmers with an average of 0.5-2 hectares of Land (FAO). I agree with this figure because I also collected data from over 45,000 farmers in five years using GPS, and the average size we got was 0.76 hectares per farmer. These farmers are on fragmented land and are mostly above 67 years old on average.
Brazil, a developing nation with many similarities to Nigeria, has less than 10% of its 215 million people in agriculture. In comparison, Nigeria has over 37% of its 218 million people in agriculture. Yet in Brazil, production growth has exceeded growth in domestic consumer demand, leaving surplus production for more exports. The value of Brazil’s agricultural exports in 2022 reached $125 billion, with close to 72% of processed foods derived through the industrialization of their agricultural sector.
What should we be doing ?
· A DELIBERATE Agro-industrial policy, strategy, and program: The deliberate action will require a strong policy drive, leadership that is not just short-term driven alone, but understands it as a value-chain and from an Agribusiness perspective. Creating a strategy to harness the potential at the downstream, midstream, and upstream of agriculture, rather than the past focus on the upstream (production of raw commodities for consumption and production for export). The initial approach was a focus on the involvement of the private sectors in the marketing of goods produced primarily for export, rather than the participation of the private sectors in the production and processing of the agricultural commodities (NEPAD 2013, 29)
· Deliberate and well-channeled agro-industry financing: The Comprehensive Africa Agriculture Development Programme (CAADP) focuses on boosting agricultural investment and productivity to achieve food security and economic development across Africa. A key aspect of CAADP is the commitment from African Union (AU) member states to allocate at least 10% of their national budgets to agriculture and rural development. This commitment, along with the goal of achieving at least 6% annual agricultural growth, is outlined in the Malabo Declaration and aims to transform African agriculture by 2025. The Federal Government of Nigeria’s public expenditure is on average 1.6% of the total annual budget in the last 10 years, with less than 50% utilisation, a high percentage of which is recurrent expenditure.
Multiprong approach: Agriculture is not just food security, as important as it is, but also a means for economic growth and development. We need to design policies and programs that are not just focused on food security alone but could also address sustainable economic growth and development. Public-Private and development institutions’ partnership with science and technology is driving the value chains. Agriculture has gone beyond hoes and cutlasses, its innovation and technology driven by science. L’Oréal, one of the largest companies in beauty and make-up, is looking for a scientific solution from IITA on green innovations.
Focus on rural development- There is no agricultural transformation without rural infrastructural transformation. Agriculture is not rural development; rural development is beyond agriculture alone. The development of rural soft and hard infrastructure is critical.
Decentralized agriculture: This will be essential to supporting key comparative advantages and challenges in different regions. Challenges are not generic and homogenous; opportunities are not homogenous. We should focus on a bottom-up approach, working through regions of the state based on their agroecology and comparative advantages. God created these things for a purpose and supported us with science to shape things around them.
Development of the Enablers: The public sector focuses on supporting enablers and implementing integrated policies on agriculture and industrialization. Commercial agriculture is supported through the derisking of private sector investment.
Consolidation of farms: In agriculture, consolidation is the shift toward fewer and larger farms, usually because large farms become larger and smaller farms go out of business. In the late 1950s, U.S. Secretary of Agriculture Ezra Taft Benson exemplified government pressure to consolidate when he called on farmers to “get big or get out.”
Between 1950 and 1997, the total number of US Farms declined from 5.39 million to 1.91 million. Over the same period, the average US farm more than doubled in size, from 215 to 487 acres. Many other industries in the food system, including animal slaughtering and processing, also underwent major consolidation.
Largely because of consolidation, most food production in the U.S. now takes place on massive-scale operations. Half of all U.S. cropland is on farms with at least 1,000 acres (over 1.5 square miles). We need to
Development and expansion of agro-Industrial Cluster: The African Union Kampala Post-Malabo declaration 2025 focuses on the development of agricultural industrial clusters in Africa. The African Development Bank (AFDB) is working with governments and the private sector in 11 African countries to create Special Agro-Industrial Processing Zones (SAPZ) that will transform the rural landscape into economic zones of prosperity and harness the power of industrial agriculture.
Few National and sub-national governments in Africa are turning the curve, and we can learn from them. Benin Republic and Oyo State, a sub-national entity in Nigeria.
All kudos go to a visionary leader of our time, HE Seyi Makinde, who, as far back as 2019, saw what many are seeing today. He saw the future yesterday. Today, Oyo is on the verge of industrializing its agricultural sector.
You may say I am biased, but I am speaking the facts, and they say data is sacred. In the last six years, Oyo State has ticked most of the boxes above.
Oyo State, under the visionary leadership of HE Makinde, developed its own agribusiness strategy as far back as 2019. This strategy strongly focuses on agro-industrial development. Copies are available for your citations. It is a multipronged, deliberate strategy that focuses on developing the value chain for food security, economic development, and growth. The PPD (full meaning of PPD) model is already taking place with science through top-class research institute supporting both crops and livestock across the value chain, and driving blended international development fund to the tune of $170 million in the last 6 years, to complement public sector fund with competing needs.
The proof of concept on the agro-industry cluster program has commenced at the first Agricultural Transformation Center at Fasola in Oyo State, showing what is possible here. The center is state-built and private sector-managed. Fourteen new agribusiness companies were established within three years. It has attracted a new investment of N17 billion, primarily in new factories processing diverse crops produced in the state.
Rural infrastructure development commenced since 2020, and close to over 300 kilometers of rural roads were built, over 100 kilometers are ongoing, and 1,000 kilometers of rural roads are in the pipeline. Regional agro-logistic under construction, reducing over 40% of initial post-harvest loss for increased production and driving agro-based industrialists to our State with another N29 billion private sector agro-industry investment, focusing on Sugar, Cassava to sorbitol, Gluten-free HQCF, Cashew processing, Agricultural equipment, etc in the last six years, supporting close to 27,000 farmers cumulatively.
Support for Enabler is ongoing. Investment derisk through Oyo State funding in the BOI is to support the agro-industry in the State. We are providing support for micro farmers to move to small and medium farmers for both crops and livestock through MOARD and ACCOS. We are developing a livestock transformation center in each region as a one-stop shop for the livestock value chain. The rural security through Amotekun and the current procurement process of surveillance helicopters for the rural agrarian community are ongoing. There are also new entrants development with over 5,500 youth trained and 1,000 youths who developed their own small enterprise. Oyo State developed a mechanism for it to move to medium enterprise through enterprise support YEAPFCMB with 1.5 billion soft loan for the pilot.
All these have supported the growth and development of the Oyo state economy by over 300%, mainly through the agro-based sector.
Of course, Oyo State needs to do more to ensure the sustainability of this noble turning point, remain resolute, continue to consolidate, and build strong institutions and policies.
The establishment of two other agribusiness industrial hubs will host over 40 agricultural industries, cumulatively employing directly and indirectly over 100,000 people, supporting the livelihood of over 500,000 farmers from peasantry micro to medium farmers, transforming rural villages into agro-based industrial areas linking to the economy of the peri-urban and urban area, supporting import substitution, development of the wholesale market for standardization, quality control, aggregation and raw materials for industries, the continued development of enablers like rural feeder roads, circular roads, development of community aggregation centers and agro-logistics, energy provision in the rural areas, the airport for cargoes and linkages of all these to the rail are deliberate signal towards agro-industrial revolution.
If Oyo State continues this trajectory in the next seven years, it will become the first subnational in history to be sustained using agro-based industrialization in this country, with the highest indices of economic development, including poverty reduction.
I am extremely humbled to have delivered this lecture on this epic occasion. I once again congratulate and thank Baba for inviting me. I will not go without paying homage to my boss, His Excellency Makinde, for allowing many of us to stand upon his shoulders to fulfill our dreams by serving our state with development and growth.
Splash FM, keep on shining!
Distinguished ladies and gentlemen, thank you for listening
Oyo ko nireyin loju mi.
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