Unemployment is winning

How workable is Buhari’s plan to send able-bodied young people to the farms as a way of solving unemployment in the country?

Two weeks ago, President Muhammadu Buhari directed that food and fertilizer importers should not be given access to foreign exchange by the CBN.

The President added that Nigeria has lots of young people (median age of 17.9), hence, agriculture is a means to solve unemployment among youths. 

“We have a lot of able-bodied young people willing to work, and agriculture is the answer,” the President said.

However, Nigeria’s problem in Agriculture is not a lack of personnel, but a problem with productivity. 

Is productivity related to manpower in other countries? 

The Netherlands is Europe’s largest agriculture exporter, boasting of Europe’s most advanced agriculture sector. In 2019, the Netherlands exported €94.5 billion worth of agricultural goods. That is a 4.6% increase in the €90.4 billion export figure for 2018. Around two-thirds of this growth is due to an increase in export prices, while a third is due to higher export volume.  

In 2019, the Netherlands had a labour force of 9 million, and just 2% of that figure is employed through agriculture. Meaningless than 300k people produce €94.5 billion worth of agricultural exports in 2019. 

What about other emerging economies? 

Comparing Nigeria to the Netherlands does not paint a proper picture as the latter is a typical first world nation with most of the labour force out of agriculture.

However, other emerging economies also have large agriculture sectors, which could be comparable to Nigeria’s. 

The top 4 rice exporting nations of 2019 were India ($7.1 billion), Thailand ( $4.2 billion), USA ($1.9 billion), and Vietnam ($1.4 billion). 

The United States is the only top 4 exporting rice nation that is not regarded as an “emerging economy.”  

Does agriculture play a major role in their economic workforce/ productivity? 

India: The Asian giant has a labour force of 494 million, of which 44% are employed in agriculture, the Industry employs 23% of Indians while the Service economy employs 31% of Indians. 

However, despite being the world’s largest exporter of rice, agriculture produce did not even make India’s top ten exports, as industrial goods were responsible for India’s top ten exports. Mineral Fuels made up India’s top export in 2019 at $44.1 billion, followed by Gems and Precious Metals at $36.7 billion, and Computer Machinery at $21.2 billion. 

India’s I.T sector is also a major producer of Indian productivity with domestic revenue expected to hit $44 billion in 2020, while exports revenue was estimated at US$ 147 billion. 

Thailand: The world’s second-largest exporter of rice had total exports of $245 billion in 2019, with a labour force of 39 million which is even less reliant on agriculture than India. 

Agriculture contributes 8.4% to Thailand’s GDP, with Industry at 39.2% and Services being the highest contributor at 52.4%. 

Food is not a major top 5 export from Thailand, as Computer Machinery was its major export in 2019 at $40.2 billion, followed by Electrical equipment at $33.9 billion and Vehicles at $28.9 billion. 

Vietnam: Southeast Asia’s star economy was the 3rd largest emerging economic rice exporter in 2019, with a labour force of 57 million. Vietnam recorded a trade surplus of $11.12 billion in 2019, from exports of $264.189 billion. 

Agriculture contributes 15.3% to Vietnam’s GDP, followed by industry at 33.3% and Services at 51%. 

Vietnam exported $126 billion in electrical equipment in 2019 alone, with smartphones and spare parts making up $51.38 billion of that amount. Footwear exports came at $24 billion in 2019 while clothing was $16 billion. 

Does sending more people to the farms increase productivity? 

Affiong Williams, the founder of food processing company ReelFruits, says that she does not think sending more Nigerians to the farms will increase productivity because “There is very little material productivity to achieve by increasing physical labour on the farms. Productivity increases in Agriculture, which moves the needle on production output, are more impacted by things like fertilizers, mechanization, and increased technical expertise. Manual labour is no match for any of those things.

What does Nigeria need to do to improve yields? 

The over-reliance on smallholder farming, in my opinion, is the biggest hindrance by the government to improve agro yields,” she added.

She added that even though the current model may be seen as a “development activity,” it barely achieves its true aim. 

To improve the output of any crop, one needs to do a lot of testing and control for so many factors to be able to arrive at the right conditions which increase productivity. Smallholder farmers do not have the resources to do this type of ‘A/B testing’ as it were and so it is very difficult to get true information and disseminate the right techniques that all of these farmers can apply.

“I think the government needs to enable more commercial farming by the private sector who are able to acquire the resources to increase productivity and disseminate such learnings at a faster pace,” she said.

Bottom Line: The Nigerian government is not focusing on the aspects that increase productivity in agriculture which experts say are fertilizers, mechanization, and increased technical expertise, components that cannot be replaced with more human capital in the farms. 

Secondly, growth in Nigerian agriculture yields can only be done through large scale commercial farming with the ability to conduct tests to find the right techniques for farmers.  

Finally, compared to contemporary emerging economies, Nigeria is seriously lagging behind in both agriculture exports and manufactured exports,  as Nigeria’s top ten agriculture exports hit just N289 billion between April 2019 – March 2020. 

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