The Federal Government of Nigeria is desperately in search of alternative sources of foreign exchange following the lingering impact of the coronavirus pandemic on the country’s FX position.
Although there has been continued mention of diversification, no real efforts have been made to achieve the goal.
One of the areas identified where Nigeria could improve productivity and reduce import dependence is Agriculture. Being a leading producer of cassava in the world (20.0% of global production as of 2017), opportunities abound for Nigeria to diversify its foreign exchange inflow through the increased cultivation and export of cassava.
Last week, the Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, while commissioning Rivers Cassava Processing Company, said Nigeria imports over US$580m worth of cassava annually. In his words, “according to the Food and Agriculture Organization (FAO), our country’s cassava production is by far the largest in the world. This means that we are throwing away precious money while outsourcing services that we could comfortably carry out in our backyard.”
Notably, in 2001, the Olusegun Obasanjo administration instituted the Presidential Committee on Cassava Export Promotion (PCCEP). The committee had the mandate to ensure that Nigeria churns out 150mn metric tonnes of the crop while earning US$5bn for it. Although the program generated significant euphoria, sadly, like many other programs over the years, it was not successful, hence, the country currently imports US$580m worth of cassava annually.
Over the years, we have seen series of interventions by the CBN in the Agricultural Sector, but these have not significantly improved output in the sector.
According to FAO, cassava is one of the fastest expanding staple food crops in cassava-consuming countries with increasing industrial demand. Globally, cassava has grown by about 3% annually (FAO, 2018).
As of 2018, world cassava production stood at about 278 million tonnes with Nigeria producing about 60 million tonnes according to FAO data. Despite being the largest producer of cassava in the world, almost all the cassava produced in Nigeria are consumed locally.
FAO data also noted that China imports more than 80% of the total world cassava products processed into pellets and starch. Increased production of cassava could be a viable source of FX, but the current production level falls below local consumption and industrial use.
In our view, commissioning a national agro-industry survey would be a first step to unlocking the potentials in the cassava subsector.
