Budget is the second most important legal document in any country after the constitution because it is a tool for allocating the country’s resources to every sector of the economy. JOHN OBA, who was at the budget analysis of the allocation to Federal Ministry of Agriculture and Rural Development by ActionAid and Oxfam, reports.
ActionAid and Oxfam has revealed that the recently signed 2018 budget especially allocation to the agriculture sector falls far below required expectation.
Presenting the analysis of the budget to the sector to stakeholders at the meeting recently, the Food and Agriculture Programme Coordinator, Mr Azubike Nwokoye, said budgeting demonstrates government commitment and prioritisation among sectors, programmes and projects through the share of the budget that each gets.
The sectors’ allocations usually reflect government policy and programme as detail in policy document adopted by the administration as the time. The present government adopting the economic recovery and Growth Plan (ERGP) as the blueprint for the nation’s socio-economic development, it is expected that agriculture will be a key drivers of the economy.
The role of agriculture in transforming Nigeria is particularly significant because the sector contributes most to Nigeria’s GDP about 4000 employs about 66% of the labour force provides 80% of food consumed in Nigeria and provides at least 50% of industry raw materials needed in the country. But notwithstanding, the demonstrated contribution and potentials of this sector, governments over the years have relegated it to secondary levels behind other less sustainably impacting sectors like oil and gas. With the ERGP and Agricultural Promotion Policy (APP) of the present administration, agriculture comes to limelight as a potential vehicle for creating employment and improving the GDP growth rate of the country.
Given the established relation between government’s sector priorities and budget allocations, the budgetary allocation to agriculture becomes of interest for review so that government’s real commitment to the sector can be tested and since this 2018 budget is the third in the life of this present administration, the budgetary trends would provide enough indication of government’s practical commitment to the sector and realizing the targets of the EGRP through agriculture.
Mr Azubike, while analysing the budget established how compliant the budget is against internationals benchmarks; ascertain the capital-recurrent budget size relation; review the capital budget and identify
Budget lines and allocations that represent deviations from good budgeting practice and make recommendations that will assist NASS in reviewing the budget assented to by President Buhari
Giving the highlight of the budget, he said with total budget of over N9 trillion, the agriculture sector got a bit above N172,796,092,743, with N118,984,139,037 for capital project, N53,811,953,706 for recurrent for the budget while the percentage of capital allocation within the sector is 68.86 per cent and 31.14 per cent for recurrent.
He said having proposed only 2 per cent expenditure, it leaves a huge gap of N688,427,602,578.4 and that the National Assembly could redress the inadequacy and if it requires external borrowing to fund, it would be worth it given the potential merits. “The percentage of recurrent and capital expenditure of the 2018 budget of the federal government and the allocation trend since 2014 to 2018.
The real value or the purchasing power of the proposed federal government’s allocation to agriculture is important because it shows what the budget can procure in real terms. So for year 2018, though Nl72, 796,092,743 was nominally budgeted for the sector, the budget can only procure goods and services worth N10,722,539,630.08. To achieve the desired investment impact in monetary terms, the gap of N2,073,553,112.92 needs to be filled either by providing additional budgetary resources or reducing inflation.
“Also we most focus analysis on the sub-sectors that may potentially impact on women promotion and development of value chains. This policy has our support considering the role of value chains development to the agriculture sector which will ultimately increase the diversification of the economy,” he said
Research and development
He said allocation of 2.93 per cent of the capital allocation to research and development shows low commitment level and that this negative development of allocation of N3,484,188,931 from N11, 323,702,475 in 2017 is fast becoming a trend as it dropped from N37,287,261,529 in 2016.
The agency commended the zero percent allocation to the ministry from the 88% it was in 2016 and 100 per cent of the research and development budget allocated to research related department and agencies. This according to him will empower them and the ministry can use its monitoring and evaluation budget to oversee their activities.
According to him, the allocation of about N8.12 billion or 6.83% of the agric sector capital expenditure for agricultural inputs is a good development as this reflects an upward increase from the amount of N1.3billion of capital allocation in 2017 but that this needs to translate to greater access of small scale farmers to inputs required for the 2018 farming season.
“And it seems that the Growth Enhancement Support Scheme (GESS) is yet to be reactivated despite recommendations by concerned civil society groups workings to improve the sector to do so in 2017 by increasing allocation and activities to support growth in the sector, instead the amount proposed for 2018 N1.67 billion dropped from the 2017 proposal N1.9 billion by about N3 million.
“While it could be argued that some government programmes have improved some smallholders’ farmers’ access to affordable inputs, majority of the farmers still do not have access to these inputs. Government needs to hasten the activation of the GES scheme that proved to be an effective platform to reach smallholder farmers with affordable farm inputs in their communities in 2014 and 2015.”
Extension support services
N6.4 billion allocated for extension service in 2017 is a far cry from adequacy but that with the N1,8 billion allocated in 2018, the sub-sector is bound for the outcomes for poor extension services.
“We note that only seven MDAs allocated resources for extension support under this year budget down from the 20 that did in 2017. “We hope that more relevant MDDs will find extension related activities interesting in subsequent years so that the sector can be revived.
According to him, MDAs in the agric sector did not budget for agricultural credits as also in 2017. Though the Central Bank of Nigeria and the Bank of Agriculture in all the 36 states and the FCT may have some programmes for supporting farmers, small scale farmers do not benefit ther initiatives either for lack of awareness or lack of capacity to undergo the usually rigorous and demanding processes of accessing such facilities. It is worrisome that small scale farmers who produce the bulk of food for man, animal and raw materials for industries in Nigeria still do not have easy and smooth sources of credit from government. The relationship between access to credit and increased productivity is easily discernable.
On the government allocation for labour saving technologies in the sector, he said N3 billion allocated for this in 2018 budget from N5.7 billion in 2017 signify a negative downward trending that needs to be reversed. Of greater concern according to him is on the appropriateness of the technologies available to smallholders a farmer.
“For Instance, majority of the labout saving technologies proposed in the 2018 budget may be tractors that may not be affordable and appropriate to the smallholder farmers. Littered in the ministries of agriculture of states and in the federal agricultural instutitions are abandoned tractors and farming equipment that are not in use. The federal and states governments should work with the smallholder farmers in determining appropriate and affordable farming equipment that would meet their needs.
He said most small scale farmers still farm with crude utensils such as hoes and knives, thus limiting their ability to improve productivity.