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Importance of Export Promotion in Agriculture

Nigeria has a rich potential for agricultural production and export. The nation is the largest producer of oil palm in Africa and fifth globally. It also ranks sixth in global yam production and seventh in cassava production. Moreover, Nigeria’s arable land is about 21 percent of the country’s total land area which is greater than average for tropical countries. However, Nigeria’s agricultural sector continues to underperform due to several reasons such as fragmented smallholder farms, low adoption of modern farming practices, low adoption of mechanization, lack of investment in post-harvest handling infrastructure, weak market linkages and limited access to finance among others. These challenges have led to stagnation of agricultural value added over the last few decades with only 2 percent annual growth on average since 1980. In order to achieve rapid transformation of its agriculture sector, Nigeria will need a well-structured strategy that addresses key issues such as foreign direct investment (FDI), market accessibility and trade promotion programs amongst others.

Importance of effective export promotion in Nigeria

Nigeria is one of the largest producers of agricultural commodities in Africa and the third largest exporter of primary produce in West Africa. The nation’s agricultural sector contributed about 50 percent of the country’s total merchandise exports in 2017. This export of agricultural produce is said to comprise yam, palm oil, rice, cassava, cocoa, groundnuts and rubber amongst others. However, in spite of these achievements, Nigeria’s agricultural sector has not performed at the expected level. The sector has been unable to contribute to the economy in terms of providing employment, improving food security and generating foreign exchange. This is largely attributed to the fact that Nigeria’s agricultural sector has not been able to tap into the export market due to several reasons such as fragmented smallholder farms, low adoption of modern farming practices, low adoption of mechanization, lack of investment in post-harvest handling infrastructure, weak market linkages and limited access to finance. These challenges have led to stagnation of agricultural value added over the last few decades with only 2 percent annual growth on average since 1980. In order to achieve rapid transformation of its agriculture sector, Nigeria will need a well-structured strategy that addresses key issues such as foreign direct investment (FDI), market accessibility and trade promotion programs amongst others.

Promotion of domestic value chain

A value chain is a chain of processes involved in the production and distribution of goods and services. These activities include cultivation, harvesting, processing and transportation of goods as well as marketing, financing and packaging. Many agricultural commodities and products are traded between different countries. For example, yam and cassava are primarily cultivated and imported from countries in West Africa and exported to other countries around Asia and Europe. This means that these commodities are imported as raw materials or semi-processed produce and then exported as finished products. Therefore, the export of agricultural products from Nigeria is mainly from the finished goods that are produced from imported raw materials. This is not an ideal situation because the raw materials are imported from other countries and the finished goods are exported back to the same countries. This means that the value of goods and services produced in Nigeria is limited to the value added in the final products. However, if the production of goods and services is based on local raw materials, then the value of goods and services is added to the farmer and the related stakeholders in the value chain. This is known as the promotion of domestic value chain. The local value chain approach helps to increase employment, generate more foreign exchange and improve food security. This is achievable by ensuring that the local raw materials are available and linking the supply chain to marketing and distribution channels.

Increase in employment

Nigeria is one of the most populous countries in the world with a population of about 190 million people. There is an abundance of labour in the country compared to other countries with developed agricultural sectors. However, there is a high rate of unemployment in the country mainly attributed to the limited job opportunities in the agricultural sector. The agricultural sector represents about 40 percent of the total employment in Nigeria but it only contributes about 6 percent of the total GDP. This means that the agricultural sector is not contributing to the economy and this is attributed to the fact that most of the workers in the agricultural sector are not engaged in productive activities. The production of agricultural goods and services is mainly done by a small number of producers in the country. In order to provide more employment opportunities, there is a need to increase the number of farmers using modern technologies. What this means is that more people should be engaged in activities that can contribute to the overall production of agricultural goods and services. Modern technologies and methods of agricultural production have to be used in order to increase the number of workers engaged in productive activities.

Increase in Food Security

Nigeria is one of the largest producers of agricultural commodities in Africa and the third largest exporter of primary produce in West Africa. The country’s agricultural sector contributes about 50 percent of the country’s total merchandise exports. This export of agricultural produce is said to comprise yam, palm oil, rice, cassava, cocoa, groundnuts and rubber amongst others. The agricultural sector is also responsible for feeding the country’s population and providing employment and income to farmers and related stakeholders in the value chain. Therefore, the success of the agricultural sector is important to the well-being of the country and its people. This can be achieved if the agricultural sector starts to engage in value addition of the produce and linking them to the export market. This can be done through the promotion of domestic value chain approach.

Conclusion

Nigeria has a rich potential for agricultural production and export. The country is the largest producer of oil palm in Africa and fifth globally. It also ranks sixth in global yam production and seventh in cassava production. Moreover, Nigeria’s arable land is about 21 percent of the country’s total land area which is greater than average for tropical countries. However, Nigeria’s agricultural sector continues to underperform due to several reasons such as fragmented smallholder farms, low adoption of modern farming practices, low adoption of mechanization, lack of investment in post-harvest handling infrastructure, weak market linkages and limited access to finance. These challenges have led to stagnation of agricultural value added over the last few decades with only 2 percent annual growth on average since 1980. In order to achieve rapid transformation of its agriculture sector, Nigeria will need a well-structured strategy that addresses key issues such as foreign direct investment (FDI), market accessibility and trade promotion programs amongst others.