Nigeria imports nearly a shipload of rice every week. But it is one of the most agriculturally fertile countries in Africa. The challenge, says First Bank of Nigeria MD and CEO Dr Adesola Adeduntan, is that the land is used by subsistence farmers, and is yet to be fully commercialised. He explains the work First Bank is doing in this sector, including helping farmers to form cooperatives in order to finance the right agricultural inputs and equipment. The potential of a food-secure Nigeria is huge. This is the second half of our interview with Dr Adeduntan; in the first half, he discusses Nigeria’s general business outlook and First Bank’s financial inclusion targets.
World Finance: I’m with Dr Adesola Adeduntan, managing director and CEO of First Bank of Nigeria, and we’re discussing the country’s agricultural sector.
How is agriculture changing in Nigeria, and what’s driving it?
Dr Adesola Adeduntan: Agriculture has always been a key component of our GDP. What hasn’t happened is to transition agriculture from subsistence farming to commercial farming.
We import, I think, a shipload of rice almost every week. And for every shipload of rice imported to Nigeria, it’s costing us about 15,000 jobs.
Importation of foodstuff into Nigeria is one of the biggest consumers of our hard-earned foreign currency. A country should give or take, be able to feed itself. Especially a country that is as endowed as Nigeria.
So that is actually the revolution that is ongoing now: so that we begin to have agricultural enterprises that have the required skill to be able to compete globally. As a country, it’s an area we must get right.
World Finance: What’s been the economic impact of Nigeria importing a significant portion of its food up until now? And what would be the benefits of that improved food security?
Dr Adesola Adeduntan: Nigeria today is a country of almost 200 million people, so the business of feeding our people alone is a big business.
If we can grow our own food – over and above the security that that provides – the savings in terms of foreign currency could be very significant.
Indeed, it will help us to generate foreign currency because there’s a renewed focus on crops that we can export – and we use that to generate export proceeds.
It also helps us to address the issue of youth unemployment. If you commercialise agriculture, and we can get more and more youth into that sector of the economy, then we address the issue of unemployment. So the benefit of getting agriculture right cannot be underestimated.
World Finance: Tell me more about the work you’re doing in agriculture: what kind of support are you offering specifically in this sector?
Dr Adesola Adeduntan: Over and above making loans available, we have what we call the Outgrower Scheme, where farmers are basically arranged or organised into small groups, and we provide financing to them. And there’s an off-taker who takes their produce off them. So that way the risk of default is minimised.
So we provide financing targeted at helping them to source the right seed, the right fertiliser, the right equipment.
We’re also supporting the large-scale producers – especially those who are in the value-adding section of the Agric chain.
We partnered with the Federal Ministry of Finance to organise an Agric Expo, that brought together key players in the agriculture value chain, where we discussed how would the country sustain the current development that we are beginning to see in agriculture. Agriculture should be the biggest economy in Nigeria: with a population of about 200 million people, huge arable land; with the right policy, with the right type of financing, agriculture and the business of just feeding 200 million people will be a massive, massive business.
So we are focusing our energy, and we are developing the right products, we are developing the right services, to ensure that we support the agricultural value chain.