By Azeezat Olaoluwa & Cecilia Macaulay
In recent years, many farmers, especially in northern Nigeria, had to stop their farm work because of consistent violent threats from criminal gangs who kidnapped for ransom. As a result, the cost of foodstuffs in Nigerian markets skyrocketed astronomically across the country, triggering off massive discontent among both the rich and the poor. The escalation of the cost of foodstuffs also came in the wake of President Tinubu’s removal of fuel subsidies and exchange-rate reform, which saw the naira fall by 40% after its peg to the dollar was removed in June 2023.
On Thursday, 13 July 2023, Nigeria’s President Bola Tinubu declared a state of food emergency aimed at tackling rising food prices and shortages. He said he would use part of the money saved by his recent removal of fuel subsidy to provide fertilizer and grain to farmers. In addition, protection for farmers would be increased and made more visible. Many of the farmers had abandoned their farms after they became targets of kidnapping gangs. Commenting on the situation, one Nigerian observer noted that no other country in the world, apart from Nigeria, deploys its army to protect farmers in their farmlands, which he said, was quite worrying.
According to Mr Tinubu, the ordeal of each of the poorer Nigerian families would be cushioned with N8, 000, the equivalent of £8, a month for six months. And 12 million families would be affected by this exercise. “I assure all Nigerians that no-one will be left behind in these strategic interventions,” he said. The move triggered a range of measures, including clearing forests for farmland to increase agricultural output and ease food inflation.
In January this year, a United Nation report projected that 25 million Nigerians were at high risk of food insecurity this year – meaning that they would not be able to afford enough food every day.
Concerns about food insecurity have been longstanding in Africa’s most-populous country, battling widespread insecurity for several years. More than 350 farmers were kidnapped or killed in the 12 months leading up to June 2022 alone, according to a Nigerian security tracking website. Many of these attacks took place in the north of the country. But new security measures would mean farmers could return to their farmlands without fear of attacks, government adviser, Dele Alake, said on that Friday. No further details were given about how the government intended to tackle the obnoxious organization of criminal gangs, whose members are categorized as ‘bandits’.
From what President Tinubu told the country, the all-important point was that all essential matters relating to food and water would now to be the responsibility of the National Security Council, which is made up of the country’s security chiefs, headed by the President.
Mr Tinubu’s first major policy move after he took office on 29 May was to remove the fuel subsidy that had been in place for decades, which also kept the price of petroleum products relatively low. Its removal led to increases of up to 200% in some parts of the country. The new President defended the move, saying it was only prudent to judiciously utilize the money saved from the removal of oil subsidy.
After the removal of the subsidy, the rise in fuel had a knock-on effect on the economy. Many Nigerians had to depend on generators for electricity. The Association of Master Bakers and Caterers of Nigeria warned that bread prices would soon escalate by 15%. But some families said categorically that they could not afford to buy bread anymore. “My monthly pension cannot cover the cost of buying bread every day, so we have switched to another more affordable food,” Mallam Ado Yahaya, from the northern state of Kano, said.
President Tinubu’s new monthly stipend was planned to cushion the hardship expected to be experienced by 12 million families via a scheme known as the National Safety Net Programme. The more vulnerable citizens were also likely to continue getting access to grain and fertilizer offered to farmers by government – although the statement was not clear on number. President Tinubu said it is expected the programme will stimulate economic activities in the informal sector and improve nutrition, health, education and human capital development of beneficiaries’ families.
One writer, Adaobi Tricia Nwaubani took a look at why some of those keys that President Tinubu wanted to use in boosting agricultural output in Africa’s most-populous country were very likely to give up. According to her, one Rotimi Williams was seen as one of Nigeria’s most successful rice farmers seven years ago, but now the 42 year-old’s land stands idle. His problem had to do with insecurity that grounded his farms to a halt. In 2012, Mr Williams left his career as a banker and ventured into agriculture. He was profiled in international media and described as the second largest producer of rice in Nigeria, with thriving farms across the north.
But the threat to his life and the lives of his workers grew too much. “There was a time my car was shot at, on my way back from the farm,” he said. “There were also kidnap attempts.” In the past three years, a sharp rise in insecurity has led gangs to kidnap hundreds of people for ransom in Nigeria, and staff of prosperous agricultural enterprises have been particularly targeted, forcing many farms to abandon or reduce operations.
The majority of attacks took place in the northern region where there are swathes of uncultivated lands and some of the country’s largest farms. In January 2022, five people were killed in an exchange of gunfire between security agents and armed gunmen on motorbikes, gang members known locally as “bandits”, who attacked the premises of GB Foods, a tomato-processing plant in the north-western state of Kebbi. When the multi-million dollar factory, partly funded by the Central Bank, launched to great fanfare in 2020, it was described in the media as Nigeria’s second largest food processing plant and included the country’s largest tomato farm. Bandits then tried to kidnap some of the staffs. They failed, but since then, the plant has been out of operation.
“There’s nowhere else in the world where people require armed security to go to the farm,” said Mezuo Nwuneli, the managing partner of Sahel Capital. His agricultural investment firm is in its ninth year of a 10-year contract to invest $66m (£54m) in the farming sector on behalf of the government and its partners, including the UK government and some Dutch investors. On one of Sahel Capital’s farms, a security officer was killed during a kidnap attempt. “They used to be comfortable working till 10 pm but because of the attack, they don’t feel safe to work late. In other parts of the world, you can run a farm 24/7.”
Prior to the discovery of crude oil in 1956, Nigeria was known for a long list of cash crops that included palm oil, cocoa and groundnuts, but the government’s focus on the booming oil sector led to the underdevelopment of non-oil sectors, such as agriculture. This began to change after Olusegun Obasanjo was elected as President in 1999, and he made efforts to revive agriculture. His government offered farmers improved irrigation as well as new machinery and crop varieties to help boost agricultural productivity.
However, the magic really began to happen when the subsequent administration in 2010 appointed the sleek, bowtie-wearing, charismatic Akinwumi Adesina, as the minister for agriculture. “When Adesina was minister, he was able to communicate the opportunities in the sector in a way that was exciting for people,” said Mr Nwuneli, a graduate of Harvard Business School, who launched Sahel Capital in 2010 when he was 35 years old. “Around that time, there was a lot of excitement and interest in the youths and the many people coming into the sector at the same time.”
The next few years saw the emergence of many young Nigerian agriculture entrepreneurs, like Mr Williams and Mr Nwuneli, in a period that many reports described as Nigeria’s era of “green revolution”.
“We had 20 million youths entering the oversaturated workforce in two decades, from 1990 to 2010. For us, we were committed to unlocking the power of agriculture and job creation with the goal to create 10 million jobs by 2030,” said Kola Masha, another Harvard graduate who founded Babban Gona, which means “Great Farm” in Hausa, in 2010. His firm used innovative technology to help its more than 20,000 smallholder maize farmer- members to improve crop yields, reduce the cost of production and increase the sale price.
In 2017, Mr Adesina, by then head of the African Development Bank, was awarded the World Food Prize “for driving change in African agriculture” and “his breakthrough achievements as minister of agriculture”. All that progress now seemed to have somersaulted, with nearly 25 million Nigerians at risk of facing hunger between June and August 2023, according to the UN.
“We’ve lost about 300 farms,” said Stella Thomas, who in 2011, at the age of 32, founded Techni Seeds. Based in the north-western city of Kano, the company applied scientific research to produce quality seeds that it then distributed to thousands of farmers across Nigeria, whose work they supervised from planting to harvesting, to ensure maximum yield. “We call them ‘out growers’. We found out that because most farmers used saved seeds – they recycled their seeds – and over time, they didn’t get enough output. So, we gave them the seeds that they used, and we were responsible for ensuring that they did the right thing.”
Insecurity has forced hundreds of her “out growers” to drop out of the network of supervised farms.
Mr Williams used to enjoy spending months at a time on his farm, organising barbecues for the farmers at the end of a hard day’s work, complete with a stereo and loud music. He is now in the process of moving his rice production to other West African countries, such as The Gambia and Senegal, which also consume rice in large quantities. His current calculations show that transportation costs would make it unprofitable for him to supply rice to Nigeria from those countries, and he predicts that the rising food inflation in Nigeria will only get worse – if the government continues to slack in its handling of security. “If there’s no security, there’s no agriculture,” he said. “It’s that simple.”
“Bola Ahmed Tinubu was sworn in at the end of May as the new President taking over from Muhammadu Buhari – and the insecurity is his problem to solve. We all have hopes that this issue will be dealt with,” said Mr Williams, reflecting on the future, “but we will see.”
But even before Tinubu cut subsidies, consumer-price growth had accelerated to an almost 18-year high of 22.4% in May, with the rate of food inflation rising more than two full percentage points faster in the same month. While reforms were causing pain on the streets, they had led to a rally in the country’s dollar bonds and a surge in stock prices to the highest level in 15 years as investors saw the government’s decision on the currency as necessary to boost economic growth.
The World Bank forecast of economic growth could quicken to 4% from 2024 from an average of 2% since 2015. Nigerian Eurobonds continued to rally on Friday, with yields on those due in 2031 declining for a fifth day to around 10.46%. Still, currency weakness had added to pressures on the cost of living in the West African country, where spending on food is a large part of most family budgets.
The price of food surged by more than 20% in sub-Saharan Africa in the period between 2020 and 2022, according to the International Monetary Fund, partly reflecting global trends and the fact the region imports many of its top staples. For Nigerians, it is becoming unaffordable to a majority of the country, Alake said. “This has led to a significant drop in demand, thereby undermining the viability of the entire agriculture and food value chain,” he said.
Africa’s most populous nation also witnessed a jump in the cost of food and transportation when the fuel subsidies were ended, which were costing as much as $10 billion a year but made gasoline prices one of the cheapest globally. Even though the government has said it would use the savings from the removal of the subsidies to revamp the agriculture sector, the measures might not go far enough, according to Ayo Teriba, the Chief Executive Officer of Economic Associates Ltd., a Lagos-based advisory firm. He emphasized that the new government should declare an emergency in all sectors of the economy including power, security and petroleum, as well as food, because they all need urgent attention. “We can’t continue to be doing it piecemeal,” Teriba said.
Under the emergency measures, a National Commodity Board will be created to continually review food costs, maintain a strategic reserve and moderate spikes and dips in prices while the Central Bank will continue its funding of the farming sector. In addition, the government plans to release 500,000 hectares from land banks, including by clearing forested areas, to increase available farmland and boost agricultural output.
The removal of fuel subsidies could lead to a further acceleration in the price index to nearly 30% by end of the year, according to Bank of America’s sub-Saharan Africa economist Tatonga Rusike. Years of insecurity and recent flooding in the country’s north central region, which is the nation’s main food producing area, have also reduced farming activities, leading to the prevailing sharp rise in prices.
An indication of the emerging price pressures can be seen in the sharp rise in food costs in Borno State in northern Nigeria, where prices jumped 36% and transportation fares 78%, just one week after the subsidies were cut, according to a report by Mercy Corps, a humanitarian organization operating in the area. This has led to increase in hunger and petty theft at the community level, according to the report. “More people are resorting to walking long distances instead of using motorized transport, and some students have stopped attending school due primarily to high transportation costs,” according to the report.
