The economics of cassava, agbado (Corn), yam and others

BY ADOLPHUS ALETOR  

Adolphus Aletor, FCA, MCIB, , MCIB, a banker and finance analyst, is the managing director/CEO, Rigo Microfinance Bank; he can be reached on +2348033410380 (WhatsApp only) or jiyere@yahoo.com

A famous politician, during a speech, recently made what has become popular among comedians and content creators in Nigeria. Nigerian musicians have also used it to spice up their music. Listening to the baritone, woody, and cracky voice genuinely gives an unintended comic relief. It is like listening to a Warri man speak. Though the content of his message may be severe, everything from the tone to gesture is an unconscious comic. That is how it is, especially with all the challenges we face in a country where vacation and relaxation are not a culture; everyone gets to ease tension.

I have listened to the speech repeatedly where he said, “recruit 50 million youths into the Army. What will they eat? Cassava, Agbado, Corn, Yam……it is grown here”. Though now turned comical, the message should not be lost on the government and the entire citizenry. This article intends to focus on the import and not on political orientation.

Firstly, Nigeria is a country with a high unemployment rate. The latest report shows that people below 30 years constitute about 70 percent of the population. Broken down, below 15 years is 42 percent, while 15 years to 30 years is about 28 percent. While the United Nations defines youth as those “persons between the ages of 15 and 24 years without prejudice to others”, the Nigeria Youth Policy (2009) defines youth as 18 – 35 years, though a new policy (2019) now puts it at 18 – 29 years. To put it in perspective, Nigeria has a youth population of about sixty-one (61) million if we go by an estimated total population of 219 million.

The unemployment rate is the share of the labour force without work. However, they are available and seeking employment. It currently stands at 33 percent (2022). It has grown over the last five years against a population growth rate of 2.6 percent.

Secondly, the Nigerian Army is said to have a total of two hundred and twenty-three thousand (223,000) personnel with an average annual growth rate of 1.6 percent in the last seven years. Compared with other countries like Brazil, Indonesia, and Pakistan, whose populations are within the same range of 200 million to 300 million as Nigeria, the size of their army far exceeds that of Nigeria. For instance, Brazil has a population of 213 million and an active military size of three hundred and sixty thousand (360,000) personnel, while Indonesia and Pakistan, with a population of 275 million and 238 million, have army sizes of four hundred thousand (400,000) and six hundred and forty thousand (640,000) personnel, respectively. In comparing the size of Para military, the three countries of Brazil, Indonesia and Pakistan have 400,000, 280,000, and 500,000, respectively, while Nigeria maintains 80,000 personnel.

Thirdly, Wikipedia puts the unemployment rate in Brazil at 9.5 percent, Indonesia at 5.8 percent, Pakistan at 4.4 percent, and Nigeria at 33.3 percent. If this is anything to go by, we may be able to draw an inference that there is a relationship between the size of a country’s army and the (Un)employment rate. I consider this my assumption.

Fourthly, in a country where managing the foreign exchange rate has become more physical, having “defied all known economic theory” or even spiritual rather than the interplay of demand and supply, Nigeria needs to, more than ever before, look inwards. Looking inwards will reduce the pressure on the foreign reserve. It means the consumption of locally made goods and services. It will lead to self-sustenance. One way this can happen is to produce our food and kill our penchant for foreign-made goods and services.

Common staple foods in Nigeria are Cassava, Corn, Yam and permit me to add Beans. They all have by-products that we can make into different flavours and diets. It graces the table of families from the North, South, East and West of Nigeria. All of them are grown in Nigeria with no soil preference. They can be for subsistence or large-scale commercial applications. They have also proved to have high export value.

For instance, Cassava has an annual export potential of $2.9 billion. Nigeria’s production capacity for Cassava is 59.5 million metric tonnes. It is unable to meet demand by a shortfall of 775 metric tonnes combined for flour and starch. The sum of $427.3 million is what we realise from domestic value addition and $2.98 billion in export. Nigeria contributes 21 percent to global output in terms of production.

Another instance is Corn; Nigeria’s production capacity is 11 metric tonnes while our consumption stands at 15 metric tonnes, leaving us with a four metric tonnes gap. Of the production, only 10 percent is for household consumption as food, while the rest is industrial, ranging from animal feed to breweries. An example is in Q3 2020 alone, when Nigeria spent N26.6 billion importing maize from Argentina and three other countries. Experts project that Nigeria will pay $285 million on maize importation by 2029.

Lastly, the alternatives to these products consumed in Nigeria today are finished products of the same food items packaged abroad and imported into the country. For instance, we import sweet corn and cornflakes into Nigeria under different brands worldwide. Nigeria spends an estimated $22 billion on food importation annually, which is about five percent of GDP. Most of these foods are produced locally. Some critical sectors are begging for that allocation. The government and citizens should think of the mileage we can all collectively derive from engaging in habits that will not only generate employment but motivate local production; export; consumption of locally made goods and services.

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