By Abubakar Inuwa Tata
I want to start this column with a verse in the holy glorious Quar’an as Allah (SWA) said “Verily, Allaah will not change the (good) condition of a people as long as they do not change their state (of goodness) themselves (by committing sins and by being ungrateful and disobedient to Allaah)” [al-Ra’d 13:11]
In 2018, the National President, North East Commodity Associations (NECAS) Alhaji Sadiq Deware, said that the N1.5 billion loan repayment given to the association was part of the N8.9 billion ABP loan granted in 2018 for one year at nine per cent interest rate. If you ask me, government has done its part. But the question is – Does the money go into agric value chain businesses or something else? Is it the responsibility of government to screen beneficiaries or that of NECAS? What is happening to food price (rice, maize, sorghum, soya beans, sesame and cotton) in the north in particular and Nigeria at large? The culprit is dynamics of demand and supply engineered by poor productivity or no production.
In the last two years, the CBN has injected billions into farming business in the northeast region alone for production of assorted produce, but still unable to recover over N36.0 billion from the region. This is apart from intervention through State Government and RIFAN. Gombe State’s farmers got the highest portion of the loan because they farmed the six commodities.
Where does the money go? Agricultural value chain where many people would’ve been hired and gainfully engaged? Not really! Many beneficiaries cornered the intervention funds into creation of jobs abroad. Most of the beneficiaries opted to use the money to buy consumer durable rather than farming – Hejour bike, Bajaj, Big telephonic sets, television sets, marriages, and other conspicuous consumption instead of using the money productively. Our findings in recent survey suggests that:-
✓ Beneficiaries of the program who are expected to repay in kind (with produce) resorted to buying from few farmers that utilized their fund in farming to offset CBN loans. This put pressure on food prices and resulted in price hike;
✓ Secondly, the lockdown of the global economy occasioned with disruption in supply chain push a lot of local companies that operate in agricultural value chain industry to switch their sources of raw materials from foreign input to local inputs. For instance, in the industry I operated personally and in which am a major player, the big five – grand cereal (a major player in the industry and producer of Vital and livestock feeds), Olam, Amoo, Animal Care, Hybrid, Sunseed, Flour Mills of Nigeria (TopFeed) mostly switched their preference for import to use of locally produced farm produce (maize) which led to significant demand pressure and increase in price;
✓ Rising demand for local inputs by conglomerates in confectioneries and infant food industry without corresponding increase in the level of imports to complement domestic production due to global lock-down exacerbated the demand pressure on food price in Nigeria;
✓ The global health pandemic has also led to global economic recession and depletion of many strategic grain reserves and inventories of goods in most manufacturing companies across NIGERIA;
✓ The closure of most industries particularly in the consumer goods segment has led to increase consumption without corresponding increase in production and supply. This led to depletion of inventories without its corresponding build up, which later resulted in upward movement in price level of most of the consumer goods.
Therefore, the current demand pressure and rising food inflation is as a result of our attitude as a people, who undermine everything due to the culture of impunity and selfishness. Otherwise, this administration has pumped in enough resources to change Nigeria, assuming the people want to change themselves.
May Allah increase us in wisdom and knowledge. Amin Ya Allah.
Tata is Executive Chairman, Gombe State Internal Revenue Service.
