AfDB Investors' Forum:Towards raising the productivity of agro-industry sub-sectors

The broad objectives for the establishment of a Special Agro-Industrial Processing Zones, SAPZs, is to


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AfDB Investors' Forum:Towards raising the productivity of agro-industry sub-sectors

 

The broad objectives for the establishment of a Special Agro-Industrial Processing Zones, SAPZs, is to raise income, eliminate unemployment especially youth joblessness, reduce food import bill to the barest minimum and reduce prices of high-value food products.

This will be done by raising productivity of the following Agro-industry sub-sectors: Agriculture, Forestry, Livestock and Fisheries production and through value addition to these materials by way of agro-industrial processing.

 In specific terms, we want to promote private local and foreign investments in agribusiness, increase the contribution of the agriculture sector to GDP, foster wealth and employment creation especially Jobs for Youth.

We will bring basic infrastructure to rural areas link smallholder producers and SMEs in priority value chains. The SAPZ we believe will lead to a doubling or tripling of the GDP of rural areas in a way that bridges the Rural-Urban Divide.

In High Income Economies (HIEs), the share of agribusiness in GDP is substantially higher than that of agriculture, and the ratio of the share of agribusiness to that of primary agriculture is typically higher the greater the per capita income of the country.

Globally, the agri-food industry which is a sub-set of manufacturing agro-industrial processing is the largest subsector of the manufacturing industries, representing 10% to 30% of this sector.

 With an output of nearly $8000billion ($8 Trillion) and more than 40 million employees in 2018, it is 8 and 5 times respectively bigger than the global IT and automotive industries.

In the 1980s/1990’s, the economies of Southern and Northern parts of Nigeria especially Kaduna and Kano States were driven by agro-industrial sub-sectors namely: cotton and textile production.

These states had several mills; Kaduna, had around ten textile mills with direct employment of more than 10,000 workers and over 20,000 indirect employment from allied industries.

The United Textile Company alone employed over one million workers! This country was on the way to becoming an undisputable player in the and major supplier of, good quality wax-resistant textiles known as Ankara. Today we have become a “Consumption Economy”.

Before the Asian countries took over and dominated this sector as with others, the textile industry was generating on average $2 billion per year with no less than 180 textile factories all over the country.

For many in this hall today names such as: United Textile Company, Aba Textile Mills, Afprint, Arewa Textile Mills, Gaskiya Textile factory and other great agro-industries in oil palm, forestry, fisheries leather are either a faded distant memory or never heard of.

Destiny beckons to us all to return to the sustainable path of manufacturing production. The logic of development shown by structural transformation is that countries that make progress transition from basic agriculture to industry (including agro-industrial processing) and later to Services.

Currently, Nigeria trails in the supply of quality agro-processing products; the African region accounts for less than 3 per cent of global gross output, and less than 1 per cent of global manufacturing output. This is despite growing demand for higher-value processed agro-industry products. Nigeria must take advantage of the opportunities in this sector to create non-oil sector jobs and raise its GDP.

Look at the most developed country in the world, the United States: its food and farming industry was worth nearly a trillion dollars to the U.S. economy in 2015; that's 5.5% of the U.S. GDP. In other words, despite its prolific high-technology industry, the United States exports more food than any other country in the world; it produces roughly 350 million tons of corn per year.

Today the most immediate outcomes are:  Which companies are willing to partner with us on this journey to build the structural legacy of SAPZs?

What locations are ready for us to build our SAPZs?

The SAPZ initiative will be implemented through the following steps:  Identify raw materials and communities/locations engaged in the production of strategic materials;
Agree on and create the knowledge and infrastructure capacity for production enhancement, processing and quality export at competitive prices, sustainable national self-sufficiency and attain food security.

Agree with Anchor Investors on support qualifying communities to dramatically increase their raw materials production and economic output through blended funding support — to Government and its Anchor SAPZ investors — targeted at investments in infrastructure and crop yield enhancing technology.

Clearly define and attribute project specific responsibilities to the actors under the various public private partnerships to be established.

FGN shall be supported [through the AfDB} to invest in farms to market roads, provide infrastructure, improved export capacity at land borders, seaports and airports; and
Crowd in private Anchor investors supported [through the AfDB private sector window] to invest in crop production, crop yield enchantment, agro-processing and other country situated value addition capabilities.

We had a chance to travel the hard but sustainable Road of Industrialization. We took a different road and ended where we are today. We must end the situation whereby Nigeria’s raw agricultural sector products are exported, processed elsewhere and bought back in different forms in the international market. With growing appetite for high-value foods, we cannot continue to import these products at higher prices.

It is not too late. United States and the UK took sixty and fifty years respectively to industrialize, Japan took thirty-five years to double its Gross Domestic Product (GDP); South Korea, eleven years. China doubled its GDP in nine years and within sixteen years grew its GDP sixteen-fold lifting 750 million people out of poverty.

What does this mean? We do not have to wait another 20 years to correct the accumulated errors of the Road not taken. A country can now transform itself under one decade!!

On 12th September 1962 President John Kennedy made this immortal statement on sending man to the moon: “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone….”    

Today is a small step to redressing the imperfect past.

By Professor Banji Oyelaran-Oyeyinka Special Adviser on Industrialisation to The President of Africa Development Bank(AfDB)




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