Harnessing Nigeria’s maize potential through AfCFTA

African countries expend about $4 billion on maize importation annually. With crude oil revenue on the slide, Nigeria can shore up her revenue by bridging the African maize production gap. In this report, NCHETACHI CHUKWUAJAH analyzes PwC’s report on how Nigeria can deploy her abundant resources in agriculture to position herself as the largest producer of maize in Africa using the instrumentality of the African Continental Free Trade Agreement (AfCFTA).

GIVEN Nigeria’s large population, demanding food needs, available land for agricultural purposes and huge market for agricultural products within and outside the country, it stands a chance of positioning herself as the largest producer of maize in Africa, especially through the instrumentality of the Africa Continental Free Trade Agreement (AfCFTA).

Maize is considered a staple food in most Nigerian homes and used for other purposes. According to a September 2021 publication by PricewaterhouseCoopers (PwC), titled ‘Positioning Nigeria as Africa’s leader in maize production for AfCFTA”, about 45.5 per cent of maize produced in Nigeria is used to manufacture animal feeds, 6.5 per cent used by brewing companies, 13 per cent used for the manufacturing of industrial flours, corn flakes and other confectionaries, while household consumption of maize stands at between 10 and 15 per cent.

Despite the huge consumption of maize produced in the country, Nigeria has not fully harnessed her production and export potential. As the second largest producer of maize in Africa and 14th globally, Nigeria is still not at par with countries like South Africa, which, according to PwC, “accounts for nearly two-thirds of maize export on the continent.”

Also, there is a demand gap of between 2-4 MMT of maize in Nigeria which leads to maize importation. The country produces 11 MMT annually while records have shown that the demand for maize in the country is between 12-15 MMT annually.

In order to meet up with demand of maize in the local market, Nigeria depends on maize import. “Maize import into Nigeria doubled from 0.5 MMT to about 1 MMT between October 2019 and October 2020. In Q3 2020 alone, Nigeria imported about N26.6 billion worth of maize from Argentina, China, the United States and Brazil following the scarcity of maize that emerged as a result of production shortfall…,” according to the USDA. This underscores the need to expand maize production for local consumption and export.

Of the world’s maize production, Africa accounts for only seven per cent while the United States of America, China and Brazil account for 62 per cent and produced a combined 709.1 million metric tonnes of maize as of 2019.

In 2019, South Africa, Nigeria and Ethiopia were the top three producers of maize with a combined maize production of 32 million metric tonnes, representing 39 per cent of the continent’s maize production. Of this number, Nigeria produced 11.0 million metric tonnes. However, due to the consumption rate of maize in Africa without the commensurate production rate for the crop, African countries spent $4 billion in maize importation, $125 million and $82 million on corn meal and corn starch importation, respectively from America and Europe apart from other maize by-products.

 

Nigeria’s maize production over the years

Nearly two-third (64 per cent) of the 11 MMT of maize produced in Nigeria in 2019 were from ten states of Bauchi, Borno, Gombe, Kaduna, Katsina, Kogi, Niger, Plateau, Taraba and Oyo. This was gotten from a maize yield of 1.7 tonnes/hectare, which is relatively low when compared to South Africa’s 4.9 tonnes/hectare and Ethiopia’s 4.2 tonnes/hectare.

In 2009, 7.4 MMT of maize was produced in the country. The figured moved to 7.7 MMT in 2010, 8.9 MMT in 2011, declined to 8.7 MMT in 2012 and further declined to 8.4 MMT in 2013. There was a boost to 10.1 MMT in 2014, 10.6 MMT in 2015, this was further increased to 11.5 in 2016 but decreased to 10.4 in 2017. In 2018, production increased to 11.0 MMT and remained so in 2019.

 

Challenges to maize farming in Nigeria

The inability of Nigeria to meet her expected maize production and exportation rate is not without reasons. There are so many bedeviling situations that have undermined both individual and government efforts to shore up maize production.

The PwC identified six major challenges which are inadequate capital given that most maize farmers are unable to secure loans from many deposit money banks for lack of collateral; poor agronomic practices from maize farmers who are largely subsistent-based and do not practise such things as the use of fertilizers, pesticides and herbicides for better soil management and pest control; use of poor maize seed variety like the Open Pollinated Variety, which are of low-yield and not resistant to diseases and other harsh conditions.

Other challenges include insecurity in key maize production belts; impact of climate changes leading to unfavourable weather conditions like inadequate rainfall, drought, etc and inadequate storage and distribution facilities which result in the wastage of almost 30 per cent of maize produced in Nigeria.

 

Government policies to boost agricultural production

In view of the huge potential in maize farming, the government has made efforts towards improving agriculture and by extension, maize farming, one of which is the Anchor Borrowers Programme of the Central Bank of Nigeria.

Launched in 2015, the progamme provides nine per cent interest loans, farm inputs (like fertilizers, seedlings, pesticides, etc) for small-holder farmers, while linking agro-processors with farmers to buy up produce. It covers crops such as rice, maize, sorghum, millet, cashew, oil palm, cassava, etc.

The CBN targeted over 70,000 maize farmers to be given N182,000 per hectare for the 2020 wet season but ended up empowering 150,000 maize farmers through the Anchor Borrowers Programme with loans, farm inputs, etc.

Another effort made to increase maize farming and production in Nigeria is the ban in 2020 by the CBN on foreign exchange for the importation of maize into the country. The ban is aimed at helping maize farmers by boosting local demand for maize, increase local sales and mitigate market depreciation by maize imports.

According to PwC, another way government is supporting the agriculture sector is through initiatives and development of infrastructure that will bolster the agriculture value chain. “The government is establishing a Special Agro-Industrial Processing Zones (SAPZ) that would foster agricultural processing and boost end-to-end productivity of agriculture crops like maize from the farm to the market. More so, the existing rail infrastructure is being upgraded and new ones are being built to link agricultural communities with the market and the port”, the PwC stated.

 

Reaping from AfCFTA

Beyond Nigerian government efforts, there is the need for Nigerian maize farmers to tap into the opportunity created by the AfCFTA to become Africa’s largest maize producer.

To achieve this, PwC identified what government and farmers must do. These include; review of tariff and non-tariff barriers on commodities like maize (cross-border embargo) to enable the country access markets within and outside Africa, which is the aim of the AfCFTA; the use of better variety of maize seeds with high yield, disease-resistant and adaptive quality to ensure more maize are available for the market; promote mechanized maize production that will reduce human effort and ensure more work is done and strengthen value chain linkages for maize-based products that will ensure maize produced are adequately stored, distributed and marketed.

Others include scaling the power of commodity exchanges; aggregation and backward/forward integration; supporting agricultural research and development; and reducing the risks associated with maize farming by ensuring funding and bounce-back strategy in cases of loss.

Pwc advises that “governments, maize producer/user associations and other relevant stakeholders across the maize value chain must recognize the importance of maize in industrial production, household nutrient needs and generation of export earnings. Efforts should therefore be geared towards ramping up production to meet domestic needs. Actualising this would require subsidising improved maize seed varieties for massive adoption, developing alternative sources for maize production financing in addition to the CBN’s intervention programmes, amongst others.”

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