For so many in advanced economies, it is too easy to forget where our food comes from, how far it has travelled, and that it was produced through someone’s hard work and care.
The combined impact of the pandemic and Russia’s war in Ukraine, however, has found even those who would never typically see beyond their supermarket shelves forced to consider the phenomenal complexity and vulnerability of global food security.
We have all come to realise that industrialised agriculture is the backbone of our civilisation.
That is why I founded Tingo, Inc: to create a food-secure Africa for all future generations. During an era fuelled by international trade and cooperation, we must make use of Africa’s vast natural agricultural resources and begin exporting produce throughout Africa and beyond.
Nowhere in Africa is the impact of increased capacity and investment in industrialised agriculture better visible than in Nigeria, most notably with its production of rice.
Rice, one of Nigeria’s major staple foods, is consumed by people from all socioeconomic backgrounds. In 2017, the nation’s rice production reached a peak of 3.7 million tonnes, with a consumption of 6.4 million tonnes. Despite being Africa’s second-largest producer of rice, Nigeria was the third-largest importer in 2017.
In June 2021, Alhaji Aminu Goronyo, the President of the Rice Farmers Association of Nigeria (RIFAN), stated that with 9 million metric tonnes of annual rice production, Nigeria is now self-sufficient in rice and nearly ready for exportation.
There remain, however, several significant hurdles Nigeria must overcome to fully harness its capacity for rice production and exportation.
The country is suffering from a severe lack of mechanisation: it has seven tractors per 10,000 hectares, falling below the global average of 200 per 10,000 hectares. As the Food and Agriculture Organization of the UN states, mechanisation through tractors is crucial to narrowing yield gaps.
Beyond this, the value erosion of the naira has led to rising inflation rates at 18.6, in turn causing prices of farm inputs to soar. Many smallholder farmers have reportedly abandoned commercial farming entirely.
To take Nigeria’s rice to its full potential will require foreign exchange for national and global infrastructure, plant, equipment, technology, and trade finance.
To this end, Tingo Foods PLC will soon be launching its rice export business in Nigeria. An estimated 2 million tonnes of rice will initially be exported each year thanks to our huge rice production community and factory. We expect this number to increase as operations commence.
Indeed, such rice production and exports will help to make Nigeria a global agricultural powerhouse, significantly improve the lives of tens of millions of farmers, and to put an end to hunger in Nigeria and the surrounding countries.
Since 2015, Nigeria has implemented restrictions in an effort to increase domestic production of rice. In addition to prohibiting rice imports from nearby nations and charging a 70 percent tariff on rice imported from elsewhere, the country has restricted importers’ access to foreign cash.
These efforts have provided protection to the domestic market; there has never been a better moment for Nigeria’s rice production and exports to grow.
This is in addition to the immense impact that the African Continental Free Trade Area (AfCFTA) will bring, which has the potential to double intra-African commerce from 18 percent of global trade to 50 percent by 2030.
According to a World Bank analysis, the AfCFTA has the potential to pull 30 million Africans out of extreme poverty by 2035, increase the earnings of roughly 70 million people, and provide $450 billion in revenue.
This may not be enough, however, without coordinated efforts. Even though the percentage of the population living in poverty is expected to decline, the number of Africans living in extreme poverty (less than $1.90 per day) will increase. There may be 170 million more extremely poor Africans in 2035 than there were in 2016.
Nigeria can lead endeavours to fight poverty in Africa by example, and guide the project to develop a modern, dynamic, productive, inclusive, and sustainable agricultural sector that can help millions on the continent escape poverty and vastly improve the business environment for agriculture.
It was highly encouraging to witness the recent opening of a $2.5bn fertiliser plant in Lagos. Currently, a hectare of rice farm requires four bags of NPK and two of Urea, with a total average cost of N120,000. Increased domestic production of fertiliser will lower costs and assist Nigeria in feeding its expanding population.
Digitisation, too, can help deliver significant access to much-needed finance, through mobile wallets, payment processing and access to specialist lenders, insurers, and pension products.
The unveiling of a brand-new dry port in Kano, into which the state government invested over N2.5 billion, opens Nigeria’s agricultural markets up to the world. By providing easy access to landlocked countries such as the Niger Republic, Chad, Cameroon, and the Central African Republic, Nigeria will gain a long-standing commercial edge over the Sahel, and into CFA currency in the Francophone world.
Furthermore, exports of rice from ports such as Kano can provide huge exchange advantages when foreign exchange is repatriated to Nigeria. Such efforts are crucial when the naira dropped to an all-time-low of N716 to the US dollar only a few weeks ago.
In 2021, only 12 percent of Nigeria’s exports were non-oil-related, compared to other oil exporting economies such as Algeria, with 46 percent, or Angola, with 16 percent.
Nigeria should diversify its exports from a current focus on oil and gas and begin to concentrate on agricultural products, solid minerals, chemical products and more. Nigeria has adequate resources to export to other countries for FX revenues.
With its RT200 FX initiative, the Central Bank of Nigeria (CBN) is making headwind with this goal by increasing non-oil export income to $200 billion over the following three to five years.
Despite having up to 60 percent of the world’s remaining arable land, Africa spent over $90 billion on food imports in 2019, according to Afreximbank projections. This is simply not acceptable.
It is our responsibility as business leaders to ensure that we embrace change and encourage the Nigerian government to formulate fresh ideas for projects that will produce comparable effects, in order to help fight food insecurity, empower our farmers, and strengthen the Naira.
If Nigeria is to be successful in resolving its food problems, it must boost capacity and investment in order to become a significant player in the world market for global rice trade.
