Nigeria is enmeshed in a self-inflicted food crisis, even if it is one that is partly externally induced by the nature of the international economic order in which poor, but endowed countries, are reduced to exporting what they have, unrefined, in exchange for what they do not need, but have been conditioned to desire. No where is that as pronounced, especially in the area of agriculture, as Africa. With an estimated 65% of yet to be cultivated arable land in the world, Africa spends over 30 billion dollars importing food, much of which it has no business importing. “As it does, it decimates its own agriculture, spends scarce foreign exchange importing what it can and should produce, exports jobs and makes itself subject to price effects from global commodity supply shocks”, says Dr Akinwumi Adesina.
The situation is particularly pathetic and ironic for Nigeria. Though she has over 80 million hectares of arable land, with over half yet to be utilised, with almost 300 cubic metres of water available from four and other smaller ones, allowing for a large expanse of this land to be irrigated, she spends about 10 billion Dollars annually importing food and agricultural produce, most of which are wheat, rice, poultry, fish and consumer-oriented foods. One of the adverse effects of high food importation bill is imported inflation, with the pressure on the exchange rate leading to devaluation-triggered inflation with prices of food items shooting up, beyond the reach of those at the bottom of the ladder.
Nigeria’s importation of food and agricultural products from the US only averaged $537 million in the last 5 years, with about 70% of that wheat. In 2020, Nigeria imported 1.29 million metric tonnes of wheat from US, being the fifth largest US wheat importer in the world. Yet, that was only 40% of what Nigeria imports, as the hold on the market by US-origin wheat. Whereas Nigeria is a beneficiary of African Growth and Opportunity Act (AGOA), she is not able to take full advantage of that due to concerns about the country’s SPS/food safety system, with exports of Nigerian food and agricultural products averaging $50 million annually.
Importation of wheat, according to some estimates, is $4 billion per annum, having become the highest single imported commodity for Nigeria for over a decade. But the Central Bank of Nigeria (CBN), puts the annual cost at $2 billion. For 2020, import bill was estimated at $2.1 billion and projected to hit $2.5 billion for 2021, which might be overshot, given the increased importation recorded earlier in the year, as a result of switch in demand towards wheat-based foods. But, it is not just how much Nigeria spends on importation of wheat that is of concern, it is the annual growth rate in consumption, projected at 5%, that is even more worrisome. “By the year 2030, Nigeria will be importing 10 million metric tonnes of wheat every year”, according to a projection in 2014 by the then Minister of Agriculture, Dr Akinwumi Adesina.
Wheat stands out from other commodities, not only for its unique properties and high gluten content, but the multiple uses to which the flour is put, serving as base for much of the activities in the baking and confectioneries world, as well as in the production of noodles, biscuits, spaghetti and other foreign food items that have gained wider acceptance over the years. But as with other transplanted or acquired tastes by Nigeria, especially worse with wheat, the local capacity for production is at variance with the huge appetite and consumption. Yila Yusuf, a Director with the CBN, estimates that “only one percent or 63,000 MT of wheat, out of the five to six million metric tonnes of wheat consumed annually, was produced locally.” As it is with data on importation, there is no consensus on actual figures. Dr Solomon Asefia, Coordinator of the SARD-SC wheat project had in 2017 disclosed that Nigeria’s local production figure had increased from 70,000 metric tonnes as at 2012 to 400,000 metric tonnes in 2016. But even with 400,000 metric that would still be an insignificant percentage, placed side by side with import figures which have been on the increase over the years. From 350,000 tonnes in 1971, imports have grown at an average annual rate of 10.21% to 6.5 million tonnes in 2020.
Whereas the Wheat crop is indeed more adapted to temperate climates, where they grow more easily while they struggle to grow in the tropics, with the added disincentive that the varieties here are not as suitable for the demands of the market due to their low gluten content, the problem actually runs deeper, reason for which availability of improved seeds have not magically impacted on local capacity and acceptance of their products. Rather the foundation of the wheat conundrum lies in what Andrae and Beckman identified in a book of the same title as “the wheat trap”, which leads developing countries into dependence on imported foods, which become staple, while the local conditions do not favour their production. Their thesis is that “the supply-side shortages in Nigerian food production were, to a large extent a result of policies which allowed the massive importation of foodstuffs.”
Not only did they foresee the situation of large scale importation, as we currently have, they traced the history of Nigeria’s journey of wheat importation to as far back as the pre-colonial and colonial era. Even though the cultivation of wheat started in the 16th century, the diverse uses of was not known to local farmers and the quantity produced, between 3,000 and 5,000 metric tonnes met local consumption level (Haruna S.A. et.al.). But the colonial masters would ignore local varieties and production to start importation of foreign wheat, introducing this to the elites, touting its “superiority and diverse uses”. So rather than solve the problem of local production through a provision of a variety with higher percentage of gluten content and help the farmers to improve on their yield per hectare, Nigeria fell for the trap. The 1970s saw beginning of the entrenchment of the imported variety, which would catch on with population growth, increased urbanisation and copycat fast-food consumption patterned after Western lifestyle, with resistance from vested interests who lobbied against restriction of importation leading to Nigeria’s overt dependence on foreign wheat, mainly for industrial use as consumption of wheat-based products spiralled out of control.
As the pressure to meet up with the consistently rising bill, which according to Haruna and co. saw agricultural import bills, including those of wheat, increased 13-fold from US $192 million to US $450 million between 1971 and 1981 on account of they referred to as ‘kangaroo importation’, alarm bells started ringing and government was forced to come up with policies to address the problem. That led in 1982 to the establishment of river basins and provision of dams to support local production with irrigation facilities. Following the introduction of the Structural Adjustment programme, the Babangida government in 1986 placed a ban on the importation of wheat and launched the “Accelerated Wheat Production Programme” to drive local production. That shot up local production to about 150,000 metric tonnes which plummeted to 50,000 metric tonnes when the ban was rescinded in 1990.
But what that short-lived ban established was the presence of local capacity for production if encouraged. While some are of the view that Nigeria cannot successfully produce wheat in commercial quantity because of the inclement weather, Dr Akinwumi Adesina argues that it is only a myth. In 2014, as Minister, he launched “two new high-yield, early maturing, heat-tolerant and drought-resistant wheat varieties developed by the Lake Chad Research Institute (LCRI), in conjunction with the International Centre for Agricultural Research in Dry areas (ICARDA), International Maize and Wheat Improvement Centre (CIMMYT) and Institute for Agricultural Research (IAR), Ahmadu Bello University, Zaria, with assistance from the Federal Government and grant from the African Development Bank”. The government had in 2012 increased import duties from 5% to 15% to discourage importation, while also pushing out a cassava-inclusion policy, mandating a 10% inclusion of cassava and a proposal for 40% cassava-wheat composite flour, going forward.
A number of factors stemming from poor policy implementation, resistance from stakeholders, weak supply chain will contribute to see to the failure of the policy, in spite of the provision of subsidies, improved seedlings, credit facilities and inputs such as fertilizers, tractors and implements to farmers under the Wheat Transformation Agenda with the objective of raising local production from 70,000 metric tonnes in 2013 to 1.5 million metric tonnes in 2017.
Nigeria did not come close to meeting that target, which the Minister had assured will create one million jobs and generate income of N42 billion for the farmers. The situation has worsened with farming incapacitated by activities of terrorists and bandits. The North East has been set back by the insurgency there, which has displaced millions from their traditional homes and farms. In the North West, bandits, criminal herdsmen and different elements, have made it difficult for meaningful faming activities to be carried out. Yet, these two regions, along with the North Central, which is also not spared, are better placed in terms of climatic conditions and experience for wheat production. The insecurity challenge has compounded the problem making the task of finding a way out of the wheat trap or attaining self-sufficiency even more difficult.
By official figures, which might not be the full picture, Nigeria has spent almost N3 trillion in the last 5 years importing wheat. Rather than backward- integrate in the direction of wheat farming, industry players have largely moved in the direction of ‘forward-integration’ by setting up facilities for the production of wheat-based products, as the opportunities triggered by increased consumption is difficult to resist. With wheat milling capacity in Nigeria estimated at over 8.2 million metric tonnes, some claim that flour millers are not quite keen on off-take of wheat from local farmers, who have found a way to informally export some of their products to neighbouring countries.
But the flour millers insist otherwise, debunking the claim that they are not ready to support local production. Olam, Nigeria’s foremost miller, has a record of supporting local farmers and only recently announced her plans to introduce the findings of research trials it conducted on the cultivation of a heat-tolerant variety of wheat, assuring the Minister of Agriculture that the new seed varieties will help to drive growth and expansion of wheat production in the country. But backward integration is a long-term affair. As noted by Mukul Mathur, Country Head, Olam Nigeria Limited, “Typically, investments in agriculture on the production side require high investments, up front investments and long gestation periods. The uncertainty can be a big determinant of the stakes you put on the table.”
There is no doubt that Nigeria has found itself a trap, even if as Ade Adefeko, Vice President, Olam, maintains that the Nigerian problem is one of palate crisis and not food crisis. But the argument is made with respect to the preference for wheat-based products on the part of Nigerians, as Bread and other products have become an integral part of the diet. As Dr Idowu Sobowale argues, “We cling to wheat based products, not necessarily because we like then better than cassava based foods, but because they are actually often cheaper and more convenient to prepare and serve. But, price is key to the preference we have demonstrated for those food items.”
The focus has to shift to ways of resolving the logjam, rather than seeking who to blame. Indeed, the problem is akin to that with rice. But with wheat, it is not only worse; it is more difficult and almost intractable, yet solutions must be found. Perhaps, there is a cue from some of the solutions adapted in resolving the rice problem. Linking import allocation quota with the extent of investment in backward integration is one that has to be considered, along with a sleuth of other incentives and initiatives on crop improvement as well as with adoption of composite flour, to help drive local production of wheat while also reducing dependence on the product.
The Indian example is one that recommends itself; especially with respect to the impact import restriction can have on level of importation as well as local production. An increase of import duty from 30% to 40% saw importation by flour millers drop from 5.7 million metric tonnes for 2016/2017 to 1.65 million metric tonnes for 2017/18. Wheat production in the country for 2019/20 was 102.2 million tonnes, with only 100,000 tonnes imported. One of the initiatives that have helped in boosting local production is that the government buys about a quarter of what is produced at state-set prices to build stocks, which is used to run a major welfare programme. With purchase guaranteed, production is encouraged.
Indeed, attaining self-sufficiency, as Nigeria desires, is not unattainable. With adequate preparation, determination, political will and a re-orientation of Nigerians to accommodate the shocks that might come in terms of a change with food preferences, taste and lifestyle, it can be achieved over time. There are definitely lessons to learn from the way the rice problem was handled that has seen Nigeria getting to the point of self-sufficiency in local production. But even for rice, it has taken almost a decade of consistency in terms of policy and governmental support to get to where we are and Wheat is definitely not Rice. Not only is wheat a critical component in the production of bread, which is a staple, it is also used in the production of so many other food items, such as noodles, spaghetti that Nigerians have had to embrace. But it is not a problem that can be solved by fiat or an immediate ban on importation. That will definitely trigger a dislocation not only in the production value chain, but its impact will be felt across many sectors of the economy with grave impact on the already precarious unemployment nightmare, with a steep rise in the price of bread and these other food items capable of triggering social upheaval. No doubt, Nigeria would still need to continue to import wheat until local production reaches a certain level, only that the process has to be carefully modulated and coordinated with backward integration plans by importers.
But more importantly, the existing gap between local production capacity and present requirement is not only huge; the crop variety is also different, which would need for the mills and bakers to make necessary adjustments. But these adjustments on the part of government, growers, millers, producers of by-products, bakers, consumers have to be made, and urgently too. We cannot keep pushing the can down the road, hoping for a magical turn-around. Nigeria is definitely in a trap and getting out of it, starts with recognising and accepting the fact. But it will take a strategic and concerted plan, backed by the right political will to get out of the trap. It won’t be by fiat, lest we are consumed by something else in a bid to flee from consuming what we ought not to have been consuming in the first place.
That the paradox of our obsession with rice is finally being resolved offers hope that we should be able to get out of the wheat trap, with sincerity and purposefulness. It is time to have a serious conversation, starting at the highest level of government about the wheat trap. An emergency declaration with a clear roadmap has become a necessity. That is the only way to overcome this externally induced, self-sustained trap Nigeria has found herself, characterised by the prioritisation of consumption of what she does not have at the expense of what she produces or capable of producing.
