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Saturday, 5 August 2017

Trouble looms if we don’t earn $15billion from non-oil export by 2020 – Audu Ogbe

Non-oil export is generating controversy as some Nigerians argue that the export of agricultural produce like yam would create scarcity in the local market and lead to price hike. Some even argue that Nigerians don’t have enough of the agricultural produce to eat not to talk of exporting.
But the Minister of Agriculture and Rural Development, Chief Audu Ogbe, justifies the export, saying the nation produces 61 per cent of global yam but that 30 per cent rot away each year. According to him, with dwindling price of crude oil from which Nigeria earns the bulk of its foreign exchange, especially as many countries are now turning to electric cars, if the nation does not meet its target on non-oil export, it would be doomed in a few years’ time.

Justification for non-oil export

Almost 30 per cent of the yams grown in Nigeria rot away because we have no facilities for preservation. At the time we started exporting yams, new yams had started coming out. There was a fight in Kwara and it was about new yam festival. So, new yams are here. The old yam stock is still heavy. So they are going to rot away if we don’t do anything. I saw someone on TV who also tweeted that it was not a great achievement and that it would have been wiser if we converted the yams to yam starch so that pharmaceutical companies can buy it at a higher price. In his argument, he omitted something. He didn’t tell Nigerians the price of a 3kg tuber of yam in London or in the US. I was in the US last year. I went to North Carolina University and a group of Nigerians gave me lunch. A 3kg tuber of yam was selling for $15. Multiply that by 350. They say these things and confuse people. That critic even said he was not sure the yams will not be fed to animals. That is a very bad point and totally unrealistic and illogical. And then there are about 4 or 5 million Nigerians in the UK and they are looking for yams. These are Nigerians who are entitled to feed, to benefit from what their country produces. From Texas to North Carolina, Nigerians have been calling,
 ‘Why are you exporting only to the UK?’ The world yam market is worth $10 billion. Why shouldn’t we be part of it? We embarked on yam export because we have capacity to do so… and because the demand for our products abroad is very high, other than oil and gas. We need to be bold in what we are trying to do. If there is such a huge demand, rather than bemoan the export, let us grow yams. We have 45 million hectares of land-a hectare is a football field-lying fallow. What are we afraid of? Let us grow yams. The only challenge in the way of yam production is labour. If you are in Benue, you have to get young men to make the heaps and if you are in Ebonyi, the yam heaps are very high.
 This is why Ebonyi yams are this high (gesticulates), very large because they are soft tubers. Ebonyi , Delta north and Onitsha area produce big yams.
 How to tackle obstacle Making the yam heaps is the challenge because young men are leaving the villages to ride Okada in the towns.
And the cost of making the yam heaps are going to increase, so we are designing a new plough at the Nigerian Centre for Agricultural Mechanisation, Ilorin. We are building new tractors and ploughs for yams. Once we mechanise, if the world want $20 billion worth of yams, we give them. Petrol dollars going India announced two weeks ago that by 2030 no single car made or brought into India will be using diesel or petrol. They will all be electric. Germany is passing a law along that line.
The French are wiring up their highways for vehicles; the US is working on the shale fields and of course the Chinese will soon start their own. So if we are waiting for oil and gas thinking that a miracle will happen, none of you, in another six, seven years, will be a happy human being. You can’t, because we don’t have the money and we are borrowing heavily.
Implications for debt servicing How do you repay the loan in dollars? There is a very wealthy Nigerian, you all know him but I won’t call his name. He is very rich. He is a very unhappy man now.
 He said to me,a few days ago, that he was owing $3 billion abroad on his investments. He has mountains of Naira here but he couldn’t convert the money into dollars and his partners abroad are angry with him. So we have got to earn dollars, Euros and Pounds Sterling.
 We have got to change gear a little bit. Rice self-sufficiency By the end of this year, we will achieve self –sufficiency in rice. Rice farmers came to my office this afternoon (Thursday), we are distributing 200 rice mills nationwide. We will not need to import a grain of rice into this country by December. By the end of the year, anybody talking of foreign rice is joking. We will have more than we need. In 2015, we harvested five million tons of paddy rice. In May, a report came out from the DFID -we grew 17 million tons of paddy rice. November 17 will be Rice Day in Nigeria.
 In another one year, the quantum of rice grown by farmers will be beyond what we can eat. So the next stage in our operation is the export programme. What are we going to export? We are going into plantation first, shear butter. The shear butter we are harvesting now is wild. Farmers are going to start growing shear butter in plantations. We are going into massive cashew processing and export. Wallmart, the super market chain, officials came here two years ago to ask us to produce cashew nuts for them. They wanted 130, 000 tons of roasted cashew nuts. The total value is $7 billion dollars. Right now, we are exporting raw cashew nut to Vietnam. They are roasting there and selling to Europe. We want to roast the cashew here ourselves and before the end of this year, there will be six factories roasting cashew. Then we go into coconut oil. Ladies will tell you it is very good for cosmetics and all of that; castor oil is also good for cosmetics and cooling of electricity transformers. Foreign debt Sesame seeds, bananas and Gum Arabic are those things we don’t really consume here. They are for export. If, by 2020, Nigeria doesn’t have the capacity to earn between $10billion and $15 billion from agriculture, we will be in serious trouble.
 This is because many of the debts we are taking now will be due for re-payment. And if you don’t have the dollars, you can have all the Naira in the world, nobody wants your Naira. Then of course the Indians came here about six months ago with their Vice President asking us to grow beans for them plus the black-eye pea, brown beans and all of that. Do you know that the Indian market is worth $100 billion per annum? If we can tap up to 25 per cent of that, we will be quite happy. And we can do it. Agriculture is the lowest hanging fruit.

BOA restructured What are the challenges we have? Banks are lending money at 18 per cent, 25 per cent. That kind of loan is not for agriculture. It is not for anything productive. Do you know what we are doing? We have restructured the Bank of Agriculture. We have applied for a micro -finance licence for the Bank of Agriculture because the licence they have is a development finance institution licence. They can’t take deposit. We are looking at 50 million farmers to become shareholders and depositors in the Bank of Agriculture. Just this afternoon, 12.2 million of them decided to transfer their accounts to the Bank of Agriculture. They will put all their money in that bank, and you know farmers don’t withdraw their money on large scale unless there is need.
We want to bring all farmers under that umbrella. We are targeting something in the range of N200 or N300 billion in the coffers of BoA. We are following the example of the Bank of Agriculture in China. It is the largest bank on earth….800 million depositors. The bank is so rich that it has 5-star hotels across China. The World Bank has been telling them to split but the Chinese said no. They told the World Bank they were happy with the bank the way it is. The bank charges only 3 per cent interest when they lend to farmers. That is the same percentage of interest in Europe. So 18 per cent, 19 per cent in Nigeria cannot work. We are pushing this seriously in the next 12 months by which time we will have tidied up the Bank of Agriculture. The Universities of Agriculture have been brought under our ministry now and they are going to concentrate on seed research, livestock research and processing.

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