Economic Recovery: Restructuring Nigeria’s farming industry

“We are a farming nation that imports most of our basic food staples”- President Buhari, on June 14th, wrote in an article titled “The Three changes Nigeria needs” which was published on America Wall Street Journal, WSJ.

Despite the fact that government levies imposed on farmers are soaring and the rate of farm bankruptcies is growing in developed countries, farmers are not willing to relocate to the developing nations where their costs can be much lower. This is striking given that foreign industries in the business of non-farm product and services progressively move into some developing nations where they can save costs and also sell at high prices that gives them room for a high profit margin.

Accountably, numerous foreign owned or affiliated telecommunication, technology, entertainment, chemical, petrochemical, petroleum, civil engineering and other manufacturing organizations have relocated outside of their home countries to many developing part of world, like Africa, due the cost- benefits they tend to get. However, across Africa and Nigeria in particular, it is still quite difficult to find expatriates or foreign organisations that are into the farming.

Notably, the oil and gas industry in Nigeria is a huge employer of foreign resources like funds, labour and other technical support. It goes without denying that both the foreign resources and the foreign oil economy significantly helped Nigeria’s economy to tower increasingly. Oil became too relevant to our economic as the nation became overly dependent on petroleum for its prosperity and survival. In fact, reasons as to why Nigeria is regarded as a mono-product economy is because of the quite important role oil played in the formation and transformation of Nigeria’s economy.

Historically, before the advent of the oil boom in the nation, farming was the principal booster of our economy. Thus, oil took the place of agriculture in the nation as a major shift between oil and farming in our nation dates as far back as the discovery of oil in the Niger-Delta region. However, oil did not only takeaway the resourceful attention of our leaders from farming, it took-out farmlands from the oil communities as the mining activities of the crude oil constituted the degradation and infertility of the communities’ land – particularly the Ogoni community where oil was first found.

Oil spillage and environmental pollution that were as a result of the mining activities of crude grossly depleted the environment, paralyzing both land and water farming activities. Fishing activities which were a major source of income for the community and the indigenes was stalled as the water became unhealthy for both the fish and the fishers. The land was also made unfit for planting and the farmers. Today, we are an oil-rich nation that imports most of our gasoline. Worse off, we are also a farming nation that imports most of our basic food staples.

Commendably, even though series of compensation in cash and in kind have been periodically given to the affected communities which have suffered from environmental degradation for many years, the Ogoniland witnessed the flag-off of the Ogoni clean-up exercise launched by Vice President Yemi Osinbajo today 2nd of June. As if a dejavu, the flag off was launched on the same spot to President Buhari commissioned a fish farm project in Bodo, Ogoni land, 32 years ago. The project was since destroyed as result of oil pollution.

However, the cleaning up of the Ogoniland and other affected communities is not sufficient to restore the significant role farming played in region and nation at large. The restoration of the glory days farming can only be regained via effective structural reforms that are capable of catapulting Nigeria into astonishing economic heights.

Re- structurally, there ought to be an increase in the engagement of foreign organisations or experts that are into farming. Concertedly, they can bring-in their resources, technical support and other forms of assistance to facilitate our farming system. Their engagement will successfully help in growing our farming system like our oil and gas industry was helped by foreigner experts to boom. They will teach us how to practise sustainable farming both in the urban and rural areas in a way that will increase our actual exportation of farm goods and services and also improve the quality of the outcome of our farming practices. Together with the help of our natural fantastic climatic conditions, the integration of international efforts into our farming system will help the nation to maximize her large expanse of agricultural dry- land, water-land and the water bodies in a way that will evidently benefit the economy.

The engagement of the foreign farming organization will also facilitate the involvement of our indigenous young graduates in farming as they will be interested in working in foreign-based farming organizations where o proper structures and world best practices is often adopted and observed to the latter. The involvement of our youth in farming will further enhance the realisation of the dreams of youngest graduates and other young people in the nation. The absorption of young people into the farming Industry will further help in tackling our national employment crises as youth(graduates) can be adequately trained and positioned for the overall growth of the nation’s GDP. In the same light, on the platform of foreign engagement, more and more young graduates will easily see the bright future of the nation’s farming sector as the youths’ sense of gainful employment will be improved.

Pathetically, just like farmlands are typically appraised at rates below their true market value to keep levies affordable for farmers, the farming profession is also appreciated below it’s true value which has made both young and old people to unfairly marginalized the profession. Though this is quite due to the negligence and lack of due diligence by youngest people, it is at the general detriment of our economy. As such, graduates are urged not to marginalize the farming profession for whatever reason that is based on today’s status-quo of farming in our economy. Farming holds the future of our nation and the early we resume the future with our hands, the better.

However, while the profession of farming is increasingly devalued at the detriment of our national growth and development, the devaluation of farming lands may not be as dis-advantageous to our economy. In other words, in order to boost economic activities in the farming sector, farm lands may be undervalued in an effort to make it affordable for farmers to buy or bear other imposed levies. High cost of farmland and operational cost stalls farmland deals and general farming activities. When costs are too onerous, business becomes too tedious or strenuous.

Turning the table around, farmlands may also be optimally valued. It may be advisable to value lands that are being used for farming with a method that is not only based on Current Agricultural Use Value (CAUV). That is, adequate consideration should also be given to Potential Agricultural Use Value (PAUV) of the farmland. In other words, farmlands should not only be appraised on the current net income farmers earn from their farms. The appraisal should also be based on the future income the farmers can earn having optimized their farming resources and practices.

The optimum valuation of farmlands will enhance the use of farmlands as collateral and further stimulate the interest of both local and international investors. Also, because the high value of a property indicates its increased feasibility, investors can trust or dare to pump in more money into farming business, having seen or perceived farming businesses to have less risk and high yield. Also, banks can progressively gain inroads into the farming industry and launch fully into the agricultural space.

Generally, farming at the Current Agricultural Use Value (CAUV) or the present incomes of farmers is comparatively low to other booming industries. However, farming holds a high Potential Agricultural Use Value (PAUV) or future income that is even greater than the petroleum industry. Farm incomes are now on the rise due to higher export demand and increased prices of farm produce. That is, current agricultural use value (CAUV) and present the income of farmers is already increasing as the Potential Agricultural Use Value (PAUV) is steadily being realised.

The government must also endeavour to keep imposed levies, like tax, minimal both during the period of boom and burst. Government may grant relief especially when prices of farm produces begin to fall. They also should be modest in their legislative movement towards imposed levies. In an attempt to reduce the prices of imposed levies like farm taxes and other levies, the tax values may be calculated only on current agricultural use value (CAUV) or present the income a farmer which is likely to be low. In corollary, Infrastructures that enhances farming should be put so that cost of operation becomes reduced as high cost squeezes profit margins of almost any business. Thus, the government need to focus on the farming industry in a quite strategic way that will give adequate incentives to farmers.

In conclusion, importantly, we need to restructure the farming sector via the progressive engagement of international and our government support in a way that will enhance our locally grown foods and thrive our export market. Also, we need to restructure the farming sector in a manner that will promote the involvement of young graduates in the farming industry. A good rise in the number of farmers between 25 and 34 years in our farming industry will further create a bright spot in the present economic darkness Nigeria is undergoing.

Farming is quite imperative following the huge fall in oil prices, global warming, and other effluents of globalisation that are increasingly affecting the world, particularly Africa. More so, bearing in mind that even though Africa contributed comparatively low to the growth of global warming, we are at the receiving end of it. As such, in other to attain a sustainable and diversified economy in our nation, farming is a great way to marry our socio-economic and environmental goals. We have remained at the crossroad of the diversification of our economy for too long, farming is the way to go.


The perfection and imperfection of the proposed 4th mainland bridge

While basking in the euphoria of the announcement about the signing of a Memorandum of Understanding (MoU) to commence the construction of the 38km 4th Mainland Bridge by Lagos State Governor, Mr. Akinwunmi Ambode, on Wednesday the 25th of May, 2016, we need to be mindful of the tiny foxes that may spoil the vine.  In other words, our government need to be watchful so that they do not oversight the important details that may cause the pen of undue diligence to overwrite the major advantages of the bridge.

Obviously the many years of awaiting the bridge were not wasted as the government ensured the scoping of quite suitable paths for the bridge. Accordingly, the proposed alignment of the bridge will pass through Lekki, Langbasa and Baiyeiku towns along the shoreline of the Lagos Lagoon estuaries, further running through Igbogbo River Basin and crossing the Lagos Lagoon estuaries to Itamaga Area in Ikorodu. Further, the alignment will also cross through the Itoikin road and the Ikorodu – Sagamu Road to connect Isawo inward Lagos Ibadan Expressway at Ojodu Berger axis.

Recently, the Lagos State Government also disclosed the new alignment will also save 2,200 houses from demolition as against old alignment which was to claim over 3,000 houses. By implication, just about 800 houses will be demolished for Fourth Mainland Bridge. In other words, the new alignment of the bridge has reduced the huge economic losses to state as the government has saved over 73 percent of cost of demolition and resettlement of indigenes. In the same way, the social cost to the state has also drastically reduced as fewer persons/households and communities will be displaced from their present location.

Also, the attributes of the bridge itself adequately compliments the suitability of path, the scope of the bridge promises to cover or comb. It is given that the bridge will feature a four-lane dual carriageway with each comprising three lanes and two metres hard shoulder on each side which will incorporate a generous median to allow for both future carriageway expansion and light rail facility. The bridge, among others would also accommodate cyclists and pedestrians and feature two service areas as well as additional pedestrian crossing.

Truly, there is no gainsaying on the fact that magnanimous benefits will be derived from this project as the features and the scope-path or alignment of the bridge ensures that it will cut travel/commute times and ease roadway traffic. The bridge will create shortcuts through notable routes that will redirect traffic from the overly congested exceeding roads and bridges. It will serve as an alternative route to the eastern axis and decongest traffic in the State.

Also, the axis the bridge is destined to cut across will also improve trade as it will provide the required transportation compliment to the rapidly growing industrial activities on the Eti-Osa – Lekki – Epe corridor of the State. Objectively, the bridge is a broad project aimed to strategically re-direct the haulage of goods on roads and decongest traffic amid concerns that vehicles, particular heavy trucks, are increasingly destroying the roads of the state. In addition, the bridge will save time as movement can now be done faster. It will increase the number of persons, goods and services that can be carried through the roads in the states. Thus, the bridge is principally geared towards economic growth of the state via increased commercial activities, especially considering the phenomenal population growth of the State with over 21 million people.

Quite importantly, the alignment of the bridge has a global impact as it will also reduce the air pollution spewed from traveling vehicles and huge trucks as travel time reduces. In line with sustainable development goals and the U.N. climate change summit held in Paris last year, the bridge will effectively reduce greenhouse gas emissions.

The alignment of the bridge will lead to increased unity among the adjoining axis and the state as a whole. The construction of the bridge will enhance connectivity as it would be made up of eight interchanges to facilitate effective interconnectivity between different parts of the State. The alignment of bridge will not only eclipse one area or axis to another but will further unite the areas like never before to areas across the third mainland bridge- which generally make up the major Central Business District of the state.

Interestingly, despite the current discord in the other part of the country and the world in general, the bridge will bring about inclusive growth vide the unity the bridge promises. Thus, the bridge will help to build a future that is inclusive — not divisive. That is, the bridge promises a future that is not only favourable to higher income earners,   but  it also  promotes increasing upward mobility and less inequality. Though,  the bridge may contrast  the disparity of the society, it expands the peoples’ diversity as it recognises evenness among the people and locations. Suffice to say, the bridge is honourable to the common man in the state.

Also, the bridge will make the  life of Lagosians, particularly the people in that  axis, more and more comfortable as it will bring convenience into the road-transport system in the state. That is, the quality of life of the people will be improved as the imputation of convenience into the transport sector in the state is also a key requirement for the sustenance of economic growth in the State.

However, the questions abound beyond the schedule and cost of the project. That is, questions are not just a matter of if the massive project will be brought in on time and on budget as the bridge is expected to gulp N844billion and is to be delivered in three years. The bridge is unique in at least two ways; one, it is the first time in the history of the state, that the government will be embarking on the construction of this kind of  lengthy  bridge which is put at 38km. Two, the project is to be solely funded by the  private sector as it is also going to be the first time a bridge of this calibre would be created without Federal funding. Presently the longest bridge in the state is third mainland bridge which is among the more than 28 bridges the federal government owns in the state. In other words, the forth mainland bridge  will be dethroning the third mainland and other historic bridges in Africa.

If not for any other reason, the first-time nature of this project to the state government are bound to give room for pitfalls in the planning and construction of the bridge. As disclosed by the  governor, the bridge would accommodate three Toll Plazas incorporating state-of-the-art tolling system which are still being tested from financial point of view. As fancy as this sounds, the reality is highly unfriendly to the masses as it is not pro-people. Thus, the tolling system may negate the crucial advantages the bridge holds. While the bridge may dethrone other historic bridges in Africa in terms of physical attributes, it may be under-rank in terms of social values.

Apparently, the financial motives over the social motives of the bridge is what is significantly responsible for the expression of the commitment of major stakeholders including the government, the consortium of consultants and investors in the delivery of the project. The reason for the toll gates and other financial entry-point of the bridge is not distant from the Public-Private Partnership (PPP) method of funding the project. Though the government may want to take credit for embarking on a project of this volume of money and technicality without federal funding or technical support, the resort to PPP method of funding in this dimension is not innovative, dynamic and sustainable as it poses to be . In other words, albeit the funding has been said to be a testimony to the confidence the partners and investors in the project have in the State Government and the Nigerian economy in general, the initiative is pregnant with a number of backlashes.

Practically, the project can be sustainably funded by taxpayers’ money, fees and levies charged by road transport ministry, agencies, unions, commissions and other road-transport organizations in the state.  Alternatively, or jointly, it might be funded from financial support from external organizations. Imposing a toll fare on tax payers would be quite absurd and unsustainable. The three toll plazas may be impedimental to the bridge’s sustainable goals as they will re-introduce a divisive — not inclusive – policy as it will favour majorly higher income earners, thereby increasing the inequality in the society.

The reasons for the toll gates is not equally distant from the cost of the bridge. The money budgeted for the structure is exceedingly high, especially considering the landscape the bridge will pass through. Analytically, with respect to the limited period of time the bridge is meant to be delivered, the budget of N844billion is averagely in excess of about 30% of required amount the bridge should gulp.

The excessive cost and interest rate on the investment may have further compelled the imposition of toll fare so that expenses and interest can be hastily recovered. In addition to the expensive nature of the project, the out pour of such amount of money on a single project in the limited period has diverse ripple effects. The project may become quite difficult to manage according to its pre-determined baseline; thus the quality of project is seriously at risk.

In other words, it will be difficult for expenses to be kept within targets or budget even if the punctuality or schedule of the project may be certain. The issue of cost in the project is common all over the world but we must continually strive for sustainable costing of the project.

The inclination of the cost and schedule baseline may further boomerang on the quality of the project. Resultantly, it has become necessary to question if the quality of the bridge will be Swiss, German, Italian, china quality or others. The quality gives a broad window-view into the structural and economical reliability of the bridge which further guarantees security. The feeling of security which is a huge function of quality is increasingly demanded by the people.

The relationship between the expense and quality of the bridge may be further explained from the life-cycle perspective. Adequate cognizance has to be given to the entire life-cycle cost of the bridge from this stage of construction. However, the governor promised the delivery of the project within the scheduled time frame, the that impact of time outweighs that of cost in relation to the quality of the project. Thus, in relation to the life-cycle analogy, a project – particularly physical projects-  shouldn’t consume more after it has been constructed than during or before its construction. That is, it would amount to a huge pitfall in planning if the cost of maintenance supersedes that of construction. In other words, both the cost of construction and maintenance of the bridge must be duly and diligently monitored from the stage of bridge process.

The balance sheet of the maintenance cost in comparison to construction cost is decided on the quality of engineering of the bridge. This is why it suffices to ask if the bridge engineering would be Swiss, German, Italian, or china quality. Notably, some of the constructed or maintained roads that are being repaired and re-coated again and again showed that some roads can be  poorly constructed or maintained which will result into the increased maintenance cost. Thus, premium quality of the bridge and the roads is necessitated and should be guaranteed as the project is meant to be a long-term big asset/investment to the Lagos State Government. If there is suitable balance between the construction-cost to maintenance cost ratio, a lot of things can be right; the bridge can be funded as suggested above, it can be toll free yet generate adequate revenue for the government. Also, the funding will ensure financial-effectiveness and cost-prudency of the project as government will have to sit tighter to generate revenue and minimize expenses. This would lead to increased sustainability as the government can also recoup expenses and revenue from this method after the bridge has been constructed.  As such, in other to protect both the economic and social interest of the bridge, it is better to make a durable infrastructure with minimal maintenance cost that will make it possible for the project to generate a friendly and long-term interest for the investors.

Bearing in mind that this is going to be the first time  in the history of the state, to embark  on the construction of a long-span bridge and expressway, we can take a cue from the third mainland. The bridge was the longest bridge in Africa until 1996 and the longest of three bridges connecting Lagos Island to the mainland till date as it measures about 11.8 km in length.  However, the bridge which is among the 28 bridges belonging to the Federal Government in Lagos, built by Julius Berger Nigeria PLC and opened by President Ibrahim Babangida in 1990 is said to have never been maintained until 2012 when the bridge experienced partial closure at different times due to repairs and additional works on the bridge’s expansion joints that costed  the sum of N1.05 billion according the Bashir Yuguda, the ex-Minister of State for Works. The bridge which is increasingly used beyond its threshold capability still has a comparatively low maintenance, compared to its construction cost.

Thus, the state may not have required federal funding but may need federal industrial know-how to facilitate the technical support required for the project as it is difficult to find any of the bridges or roads constructed  by the Federal Government with toll-gates,  but newly constructed bridges and roads by the state government are Increasingly being toll-gated.  Rather than toll-gating the bridge for several years, to recover investors’ money at a high interest rate, the Lagos state government can learn from the history of the federal government’s  funding system  and technicality. This would help to guarantee Lagosians  not just   physical convenience but also financial convenience.

Thus, the bridges should ensure a pro-people balance between its economic motives and social motives.  While the government may be more concerned about the Win-Win framework for all investors, they need to align their economic motives with a social motive in order to harness and sustain the goals of the state and the country in general. In as much as the state is the commercial centre of the nation, they must not lose sight of social motives that sustains the economic system of the state. The government has said the bridge is most importantly meant to make life more comfortable for Lagosians, however, it should not just be convenient for the people physically but through the social/economic policies and management practices that oversees the provided physical infrastructures.

On a congratulatory note, in over 50 years of its existence and decades of being  the most commercial state in the country, the Lagos State Government have made another gargantuan move which will impact civilization and urbanization of the state and its environs. The bridge will be a major milestone in the quest for inclusive growth and sustainable development in the nation. Without mincing words, the bridge will be a great western region infrastructure and a connective symbol as the network of the bridge will significantly boost the economic and social growth of the region. Undoubtedly, the impact of the bridge will be felt across western region and the country as a whole for decades to come.

The bridge which is expected to bring a 14-year old dream to reality is quite imperative following series of evidence that shows that our nation and in fact the world is challenged with globalization, urbanization, climatic  change, stagnant economic growth, stagnant incomes, rising inequality and deep arguments over what to do about increasing diversity. However, regardless of the tension and difficult economic realities in the country, Lagos remains the best positioned state for the future of our country and the proposed 4th mainland bridge is a step further in realizing the dream of Lagos.