Agribusiness for Africa’s Prosperity. Country Case Studies
Senegal
1,564,587
977,712.76
-60.9 per cent
Sierra Leone
1,061,153
2,081,584.93
96.16 per cent
162,569,694
228,595,863.77
49 per cent
Total
Source: Ibadan Chambers of Commerce and Industry: Destinations of Nigeria’s Non-oil Exports, Business Voice, Vol. 2, No. 06, p.18.
Importance of the Sector As already emphasized above, for most Nigerians agriculture is the means of livelihood. Nearly two thirds of Nigeria’s labour force has agriculture as the primary occupation. They work as crop producers, livestock keepers, fishermen, and gatherers of forest products. Because of the preeminence of agriculture in the life of the ordinary Nigerian the sector determines the standard of living of the people and, therefore, the poverty configuration of the society. This is especially so because, as the sector is the income generator at the household level, agro-industrial production is crucial for access to other goods and services needed by the household. Determining the contribution of agro-industry to the national economy is blurred by lack of data on key areas of processing and on value addition but, nonetheless, the significance of agro-industry to the economy can be ascertained in the following way. Contribution to GDP If the definition of agro-industry includes not only agro-processing but also distribution and trading activities, it would roughly account for a share between 20 and 25 per cent of GDP in subSaharan countries, including Nigeria. The entire food system, including the production of primary goods and commodities, marketing and retailing, would account for more than 50 per cent of GDP (World Bank 2008a and FAO 2008b). In a low-income country like Nigeria, the agro-processing sector contributes more than 10 per cent of total manufacturing value added. In other words, agroindustry contributes a share of 61 per cent to total manufacturing (World Bank 2008a). As a matter of fact, many experiences in Latin America, Asia and Africa have demonstrated the potential of agro-based small and medium enterprises (SMEs) for value-adding, employment generation, and the improvement of farm and rural non-farm income, food security, and rural living standards. In Nigeria, particularly where a weakening and even collapsing of public services has resulted in dysfunctional input and output markets and a breakdown in the delivery of agricultural services to small scale farmers, local agro-enterprises have been found to be increasingly filling crucial institutional gaps, particularly for commercial crops. The agro-processing sector therefore occupies a significant position in overall turnover and value added in developing countries within manufacturing, though huge heterogeneity may exist among them. On average, productivity levels in food processing are above the manufacturing average, making it one of the most efficient economic sectors in developing countries (UNIDO 2005). As such, incremental investment here could benefit the overall competitive position of Nigeria. Contribution to employment and income generation According to the International Standard Industrial Classification (ISIC), agro-industry consists of: i) food and beverages; ii) tobacco products; iii) paper and wood products; iv) textiles, footwear and apparel; v) leather products; and vi) rubber products. Agro-industrial activities include processing, preservation and preparation of agricultural production for intermediate and final consumption. The sector performs a number of crucial functions that support development and poverty reduction in Nigeria. Given the importance of this sector, agriculture in connection with industry needs to be recognized by policymakers and industry leaders as a competitive, value-adding business sector that has a positive development impact and contributes to economic growth. Thus, instead of focusing on agricultural productivity only, policymakers must consider the competitiveness of the entire agro-industry value chain. 186