 Welcome once again to the breakfast on plus TV Africa a few days ago in an interview President Obama the Buhari made certain statements that have created conversations across the country and of course it is the president's Regular reminder that Nigerians should focus on agriculture and go back to the farms. They have of course been numerous arguments For and against there's also people who say that agriculture is doing pretty well in Nigeria FAO reports says that Nigeria's agricultural sector contributed about 25% to his GDP and That basically should say that agriculture is really not the answer to Nigeria's economic challenges but this morning we're going to be speaking with Shagun Shopitan who's an economist and Kenneth Obiyajulu is the CEO of Agrocore. Good morning to you both. Thanks for joining us Thank you All right, I'm going to start with Mr. Shopitan Get your thoughts on this argument with regards the Use of what agriculture really offers and what it does for Nigeria's economy and Nigeria's GDP Do you think it is doing enough and do you agree with President Obama the Buhari that We need to focus more on agriculture people need to go back to the farms if we need to improve on a on our economy Okay, so Thanks for having me once again and happy new year to Nigeria's You know to answer this question, I think we have to first of all ask what the objectives You know what what were his objectives was it talking about when he was talking, you know, and if you remember The question he was responding to was about the economy performance under his administration, you know, like Yes Statistics were real doubt about inflation about the GDP, you know Exchange rates and all of that and then he responded with this, you know, and a lot of people are criticized even that response Was to many people. He wasn't even answering the question But if you if you look at it With a broad mind, you realize that he was actually Responded to the question but from his own worldview and from his own Mindset, you know, so I think to the president the answer to everything is agriculture So he believes that once you're farming and people are insane, you know, then people can have what they can eat I've heard him say this several times You know, people can have what they can eat and then what's left over you can then sell or export My problem is that this is a very very simplistic Approach to the question and a very simplistic with all apologies to him and his advisors and a very simplistic Approach to the overall economic performance question So if you rate if you look at how do we begin to assess, you know, his statement For me, I think the easiest way would be to do a comparative analysis So you look around the world and say to ourselves For example, what's our objective this single mentor said they want to be top 20 Part of the top 20 economies. I think they said by 20. I think the target has shifted in 2030 now, right? Now if you take the economies in the top 20 Ranking globally and look at the contribution of agriculture as a percentage of their GDP You find that the most prosperous nations have A lower percentage contributions of agriculture to their GDP So so that begs the question is that the culture the question Or is it the answer to the economic question and I think that the answer is no Now am I saying that we don't need to go back to the lands? No, that's not what I'm saying We do need agriculture because we have to eat but I think the problem we have is The manner and approach that we are going about this whole agriculture question is wrong What the government needs to focus on if you want people to go back to the land Then you have to provide the primary imputes that would ensure that our productivity is heightened significantly so that even as we're farming with our large Proportion of arable land And our huge population which are both advantages when we farm the productivity from that farming activity would increase the output Contributions to economic growth in the soul right now the way it is and I think that if we go about it the way The president is is looking at it. Yes, we'll go to the to the plant. Yes, they'll produce what they will eat But unfortunately it will not create wealth and that's what we're looking at We're looking at how to bring people out of poverty if you are doing Subsistence family right you will not take people out of poverty. You will simply give them maybe Maybe enough to eat Okay, so I'd also like, you know, Kenneth to be a quote to also weigh in on the same I mean the same question Do you agree with the president that? Nigerians need to get to farm and do you think that this is a solution to all of the economic challenges that were faced with as a country? Thank you so much and yes, happy new year to everyone so I agree with the concept of you know focusing on agriculture as one of ways of Boosting the economic activities in the country, right? But like, you know, my the other speakers said you know, that is an oversimplification of of the Importance of agriculture and how we can bring about that impact you look at the contribution to GDP at 25% It's it's relatively, you know commendable, you know Giving all the challenges that smallholder farmers would have to go through and they face currently, right miss commendable You see issues around productivity being low post harvest losses being high Access to finance we've been beginning to see a little bit of boost to access to finance to smallholder farmers commercial farmers And what have you and then you know access to market is also increasing you see our cultures contribution, you know By export, you know, non-oil and you know export numbers, you know, it's also increasing, you know But I think there's a need for us to also look at it from a full security point How is agriculture being able to? Ensure that what we consume we produce a lot of it locally, right? You look at the expenditure on food, you know Or the expenditure of households and in Nigeria, you see that in excess of 56% is spend on food alone, right? and spending on food alone Largely over 60 percent of those food items are imported into the country And so you see the hemorrhage and the hemorrhage and the effect on the economy in itself So I think where the the president was caring towards You know, or if I were to, you know Put shed more light on on the comments, you know and and you know put it into proper context It would be more around ensuring that what is consumed is also what has been produced locally That can boost the economy that can help in creating jobs, you know Over, you know 50 60 percent of you know the workforce of the nation, you know Is in one way directly or indirectly, you know employed by the agricultural sector So there is a need for us to be able to ensure that what is being consumed Especially when over 56 percent of that expenditure is on food should be produced locally, right? It would have a ripple effect across all boards of the economic indicators and that's you know We will be able to post on the economy Well, we've continued to make statements with regards diversifying our economy and the likes, you know And there's people who argue that endurance are currently doing enough, you know with regards agriculture Mr. Ashokutu, I'm going to come to you in a bit but Mr. Obiyajulu, you are already an investor in agriculture But I want you to speak with regards, you know, the idea of a country that is serious about agriculture If you've been looking at the screen, there are different slides of I'm very high-tech agricultural engineering equipment Mechanized agriculture to be precise People have argued that the idea the president has is for everyone to buy a hoe and a cutlass and go back and You know, have this cassava every a couple of months But a country that is serious about agriculture, how do we get Nigeria to a stage where this What you see on screen now Is the picture of Nigeria's agricultural sector And is that where we are currently? Okay, so I'll start with the last question. Is that where we are currently? I'll say that Nigeria is tilting towards, you know, more of mechanization, right? But the challenges are 80 percent of the farmers engaged in agriculture are small holding, right? Those are cultivated on less than zero points or less than one hectare, right? And then a The next chunk are middle class, you know Farmers and then a very tiny percent of them happen to be large-scale farmers So we will not be able to get to the area where We are at that level of of production, right until we're able to bring the smallholder farmers towards commercial agriculture And commercial agriculture's principle is more around you're cultivating for As a business and not just as a culture, right? They're cultivating to sell and what is left to consume Whilst subsistence farming is you cultivate to consume and what's left to sell? So the orientation has to change because commercially We need to be able to ensure that we're increasing the productivity of farmers. How do we increase productivity of farmers? Ensuring that they have the right set of imputes, high yielding imputes, have the right variety seeds, have it at the right possible time Increase mechanization, right? Mechanization has the capacity to increase productivity drastically, right? Studies have shown that the use of tractors and for pre-planting, planting and post-planting activities Can reduce man-hours combined by over 80 percent You know and you look at the youth's engagement in agriculture The orientation and perception of the youths towards agriculture is that of subsistence and very crude In a very crude way that it requires the use of whole and cut losses. So the more we're able to drive the Narrative around mechanization and how it can improve efficiency How then how we can improve productivity how we can reduce post harvest losses you look at Value chains or commodities like tomatoes Rice and post harvest losses for tomatoes is in excess of 40 percent You know how are you able to reduce those post harvest losses and ensure that that money Translates the money in the pockets of the farmers and in return would ensure that they're able to increase their productivity So I think there's a long way to go We have started we have started moving towards that those engagements currently Lots of commercial farmers and processors like ourselves You know beginning to spare head those activities and show people how it can be done and agriculture can be profitable But beyond one two three If you some subset of of the players in the market, I think that We need I culture has a perception problem right and this perception problem has to be tackled by individuals and professionals Speaking to the integrity of how the challenges can be addressed and how productivity can be increased how post harvest losses Can be reduced how markets can be connected to superior systems? You know that guarantee that all year round farmers are happy and they're able to get You know decent living for what they've thought all year round All right, so let's also have shagun shopato come through here Niger is has been recorded as the largest producer of yam globally and second thought producer of sweet potato among others Respectively, but being the largest producer exports is still very low at two percent and my concern is Is agriculture still the solution and why do we have this? um Yeah, I mean agriculture is a part of the solution right um, but I think like um My colleague has said One of the challenges is that we are simply not maximizing our output Right. So for example, if you talk about mechanization if you want agriculture to contribute significantly um to Either revenues or your gdp now those are two different questions. By the way you What for the government the question is contribution, you know, the most important question would have to be revenues How much is agriculture contributing to revenues? um As against gdp, which speaks to the issue of diversification However, the problem we have is that we're simply not mechanized enough and like my colleague has said, you know people In the mind of the president, I think What he sees is people with cutlasses and holes Meanwhile, what we what he should be seeing is people with tractors, right? So you need to mechanize now From a statistical point of view, Nigeria's um tractors per 100 hectares of arable land is 9.8 9.8 tractors per 100 hectares of arable land Now compare that to South Africa in the same Africa that has 44 Yeah, which is still terribly low by the way Then compare that to other countries across the world. I mean the highest um number of tractors per hectares per 100 hectares of arable land Is from Iceland. They have got 15 000 15 000 tractors, you know Of course, this is you know, it's a function of how much arable land you have and how much tractors you have So obviously in an Iceland, for example, it simply means that the arable land even though it's small um Almost every single blade of grass there is done is is is cultivated, you know with with with mechanized equipment That's where we need to be heading and the woman needs to come up with a policy So that in that direction that would you know elevate that number significantly so that output And then increase now that is one issue. The other issue I have is Agriculture, you know the question you ask this is agriculture the answer and I say It's a part of the answer, but it is not the answer What we need, you know So if you look at all of the economies across the world and just do a comparative analysis and a correlation You do a correlation between for example gdp per capita, which measures the wealth of nations, you know And and has speaks to the poverty question GDP per capita has an inverse correlation with Agricultural contribution to GDP so the countries that have the highest wealth per citizen Depend the list on agriculture in terms of contribution to their to their to their GDP So for example, the united states is less than 1 percent of their GDP that comes from agriculture And then you also find that The same correlation you find that the countries where there's high poverty prevalence They have a high dependence on agriculture as it was as a contribution to their GDP So that that clearly tells us that we can't be looking at agriculture for the answers to the economic performance question And to the poverty alleviation question Agriculture can only be a part of the solution But the president cannot be telling us oh night. We have a lot of variable land Nigerians should go back to farming No, no we need to go and find a way to industrialize one industrialize agriculture itself Industrialize our productive base as a whole and then move our economy to dependence on services That's the answer to the economic question. So I think the president really really needs to depend on his economic team I know he has a fantastic economic team, you know, the his current economic advisor that is just appointed is a highly respected person You know, Dr. Dwayne Salam is you know, he's an amazing guy. He's he's ridiculously intelligent So the president needs to lean on people like that or advice on how to move economy out of the doldrums You know, he's still got a bit of time, you know, and I think that some impact can still be made in that direction Well, um, now let's let's talk about and I'm going to stay with Mr. Shopiton here Let's talk about, you know, a country that More president rather that is advising Nigerians to go back to agriculture or go back to the farms And also, you know, I want you to speak with regards What role the government should be playing if they are serious about encouraging Nigerians to go back to farms one of the Pictures that on that slide, you know, is a John Deere. I think that's how it's pronounced John Deere tractor Averagely cost about $400,000 for $150,000 So that of course is, you know, with regards that that brings to your mind funding But what role do you expect the Nigerian government to have played in the last few years if we were serious about Actually boosting the contribution of agriculture and encouraging Nigerians to get back to You know, to agriculture So, so, um, I think it was about, um, I can't remember precisely about five years ago The government came out with a statement that they had going into partnership with the brazilian tractor manufacturer We're going to set up plants in Nigeria, you know, and then those those tractors would then be made available to farmers through some sort of Um, um, cooperative working with the cooperatives and all of that Um, unfortunately, as of today now, we still don't know what has come of that And it seems to have gone the way of a lot of things that government talks about nothing has happened um, so That type of initiative is what we need to see but we need to see a whole lot more of it, you know So we need to see policies that encourages private sector investment into mechanization of agriculture Um, we have just like my colleague. I said, we have a lot of smallholder farmers You know, and that problem is not going to go away very quickly because it's just the way we are. It's where we are for now We have a large population who are Subsistence farmers How can we help those large those subsistence farmers to move into economic farming? Where they are producing not what they eat. They're producing and eating and then they're selling Significant chunks of what they're producing it's by mechanization on the one hand So government needs to find policies to make this equipment available in a manner that these people can afford And I think the easiest way for that will be to have some sort of combined effort economies of scale leveraging on Corporatives and other groups like that. That's one question the question of mechanization The other question is the question of transportation of produce storage of produce, you know, so we have A ridiculously high percentages of wastage in in in agricultural production because they get spoiled Before they even get to the markets, you know, in some cases you have a So tomatoes, for example, you have as high as 80 percent Wastage before you get to the market, you know, there is no way you can expect any serious economic contribution Or output when you have those types of numbers So government needs to find a way to improve on the transportation question the rail the ongoing rail Infrastructure project is is one, you know, but it's only a part of the answer Then how will these farmers be able to get their products to sold? Get their products to market, you know in good time even without the question of transportation And I think again the issue of commodities exchanges I remember, you know, in in those days used to have Popo boards that will take produce from from farmers Pay them off and then, you know, sell on sell those products So government needs to look at the entire value chain of of the agricultural sector and coming with policies that will encourage private investment You know, I'm a believer in private sector Participation in economic growth to get private sector investment into Various value chain sectors All right, so let's also bring in a connect at this point Now my concern is as much as we're saying that it's very important that We begin to look at earnings gdp and what have you for agriculture contributing Do you think that we have the capacity to produce enough for I mean local consumption? Because I would rather think that a country that would want to make earnings out of You know agriculture should be able to produce enough for you know the locals to consume now according to a report in 2019 Great on production of maize at the time. We had the production capacity of 10,500 Tons and the consumption capacity at order rate was at 10,700 So it therefore means that you know, you have 200 above. I mean, what did we get that from the extra? So my my question is as it is right now this administration Do you think that we have the capacity enough to produce for local consumption? Have we been been producing enough for home consumption? so the issue or the conversations around supply and demand, you know, and Capacity has has been out there for quite a while Personally, I believe that Nigeria has the capacity to work to produce what it consumes Right. The issue is not about the capacity, right? It's about the every other variable like mr Shevon has said every other variable bought that You know, we have if you look at the factors of production for most african countries and specifically Nigeria You know, it is more than favorable, right? presence of arable land, right presence of water resources presence of entrepreneurship people low capital, right? You know capital. Yes Half and half, but in terms of capacity, I think we have it. It's about every other variable That supports the system, right? There are several you look at when there was a partial ban or a full ban on the impotential rise as far back as 2016, right? We saw that the the national import the annual import bill for for rise as far back as then was over 700,000 metric tons, right? And when there was a ban, there was a lot of pressure on the local market to see how we can meet up with the requirements Of consumers, right? And we saw that the numbers kept going down, right? And the production kept going up issues around quality came up issues around the price came up, you know But in terms of the capacity it was readily available So I think one of the things that is very very important and what the economic team of the president has to also look at is agriculture is Recording in progress. The culture is not just about What happens on the farm is an entire value chain is a continuation of activities The closer you are to the farmers the poorer you are you will be or the poorer you will be, right? The farther away you are from the farmers The more prosperous you will become what I'm saying in essence is why we focus so much effort on production activities What is the essence of producing ginger? Exporting ginger and then importing ginger tea. What is the essence of producing cocoa? Exporting cocoa and then importing chocolates, right? What is the essence of producing a whole lot of activities? But importing value added products at the end of the day We are losing value every single time that we refuse to process or move farther away from the primary activity So the issue is not about capacity The issue is about how do we have how do we add value to every single thing that we produce? How do we create a strong chain from production to marketing to transportation to warehousing? You look at government's contribution to ensuring infrastructural Solutions are in place like connection of the roads. You look at countries like Ghana Ghana has been living off the activities of the Ghana cocoa board for god knows how long So but my question but my question which is you know the second part of that one. Yes You say we have the capacity, but are we have we been producing enough for you know home consumption? Of course not, you know just a few months ago last year We saw that the the government the CBN had to give a way back to I think four companies to import 240,000 metric tons of maize You know to be able to meet with the requirement of the livestock industry because we couldn't we couldn't produce well enough and you know that deficit was capable of paralyzing the entire economy because maize and sour bean happens to be one of the major Commodities required by almost everyone in the livestock industry components for feed feed Contributes and you know the livestock sector in itself is a 1.4 1.6 trillion Naira estimated at 1.4 to 1.6 trillion Naira market right and In itself contributes to about six to eight percent of the GDP You know so that was a major issue where the government had to intervene because we weren't through reasons sufficiently enough To be able to meet with the growing demand of of of the value added products that comes out of it To answer your question. Yes. We we are we still have a lot of Activities to to put in place to ensure that we hit food sufficiency at you know very closer All right. Mr. Chopiton final question goes to you. I want you to speak with regards We're Nigeria. Well, you know like you said, you know, it tells The mindset of president Muhammad Abu Ari That's of course his statements concerning agriculture, but I want you to speak with regards What you think, you know Nigeria should Be focused on if we're hoping to be among the top 20 economies in the world by 2030 If there's any chance of that There's other directions that the country should maybe also be you know focused on or try and invest in That we still aren't So quickly also share that with us um Yeah, so so I think it's um It's we don't need to reinvent the wheel You just look around you you the answers are there just look at the economies that you're benchmarking What are they doing and then we simply Strive to do that one of the advantages of being a late comer is that you don't have to make the mistakes Of people that are ahead of you so we don't need to go through the whole process again Um We need to encourage innovation. We need to encourage creativity Right. So right now. We know that the world is moving in the direction of technology You know social media spaces Amazing things are happening there. We have a vibrant Tech industry in Nigeria, you know, go down Silicon Valley in Yabba Yabba Con or as some people will say, you know And across the country So that's being just an example of so many other sectors that we need to focus attention on The government needs to look at manufacturing because you know, there is no way that Just like um, my colleague just said earlier We must add value and the only way to add value is through production So, um, all of those agricultural outputs that is coming out very very important for us to focus on agricultural Mechanize it increase the output Be confused self-sufficient and then take the the that output and add value to it In fact by doing just that if the government can just focus on Ensuring that we can add value to our agricultural space to that value chain and take it from the farmer and now move to finish products Our our GDP will double In the period that the the government is able to and I'm just saying that of the cough Probably will be more We'll double in the period that the government is able to achieve that and I think that that can be achieved Say in a five-year period, these things are not so hard. They're not as difficult as we make them sound You know, so with very very carefully targeted policy Um instruments regulations you can move Private funding into productive sector manufacturing sector to ensure that our Greek space Can then be come Um input providers into the manufacturing space so that we don't need to import so it's it's a double one So all of a sudden your dependence on foreign exchange Um to bring in things that we produce drops Which has a direct impact on the exchange rates with that means that inflation can begin to drop You I mean it's look these things are not really very very difficult And like I've said before I'm glad that the president now does have a very very competent economic advisor I will just advise that the government listens to him. I think well, you know, I I believe he's always had You know an economic team, you know that had some level of competence in it You know, it's really just about the level of interest Because this is the same government that has not been able to address properly the insecurity challenges that have also affected agriculture There's the same government that has still not been able to understand the value of ranching for cattle It's still talking about grazing routes for for cattle across Nigeria And so it basically just tells or paints a picture of what the mindset of the government really is with regards agriculture and Basically, but we're out of time for this discussion. Kenneth or be agile to see you. I'll record. Thank you very much for joining us Mr. Shegun show Peter also. Thank you also for your time and for This conversation we've just had looking forward to speaking with you both again Thank you All right, we'll move away from the discussion on agriculture and we're going to Zamfara state to have a conversation with persons with regards the insecurity challenges the death of about 200 persons And what the Nigerian government is saying or not saying we'll be back