Can Nigeria Escape Recession by Investing in Agriculture?: Babban Gona MD, Kola Masha, Interviewed on CNBC Africa Power Lunch West Africa
Kola Masha, Managing Director of Babban Gona, was recently invited to CNBC Africa’s Power Lunch West Africa to discuss the potential role of the Nigerian agricultural sector in bringing the country out of its current recession. He notes that although the 2016 season was a bumper year for smallholder farmers, demand for agricultural commodities may likely remain flat or rise only slightly because of the weak spending climate. Farmers were encouraged to expand their hectarage due to relatively high commodity prices and increased liquidity in the sector from government interventions to channel capital to farmers via the Anchor Borrower Programme. Consequently, agro-input prices rose rapidly in response to the increased demand from the additional hectares cultivated. A weak naira continues to boost domestic demand as manufacturers have been forced to source raw materials locally. Meanwhile, as a result of the improved security situation across the country, cross-border trade picked up.
Kola comments that the government should be lauded for its focus on using the sector to tackle youth unemployment, however, its current seed and fertilizer subsidy policies are stifling private sector growth. Improving seed quality, rural road network and access to credit facilities will remain the biggest levers by which to raise domestic agricultural production and expand the sector’s role in tackling the recession.
Watch the interview here.