Dataphyte’s budget review revealedthat Nigeria budgeted N341.570 billion for capital expenditure in the agriculture and rural development sector for 2023, the highest in five years.
This represents 77.1 percent of the N426 billion total budget for the ministry in 2023.
The budget is also a 128 percent increase over the N149.198 billion budgeted as capital expenditure for the ministry in 2018.
Data review of the budget performance report published by the Ministry of Budget and National Planning shows that the funds provided for the ministry have never been fully utilised in the last four years.
In 2019, the ministry got 42 percent of its capital appropriation but spent 93 percent of the cash-backed amount. In 2020, 79 percent of the annual capital appropriation for the sector was cash-backed, but only 15 percent of the amount was utilised.
In other words, in 2020, the appropriation for capital expenditure in the agricultural sector stood at N102.493 billion, but the total amount released and cash-backed was N81.734 billion. However, only N12.546 billion was utilised, meaning that N69.188 billion was not used for the good of Nigerians. In 2021, N102.493 billion was allocated to capital spending in the sector, but N197.008 billion (N94.5 billion higher) was released and also cash-backed. However, only N167.955 billion was utilised, meaning that N29.053 billion was not used to boost the struggling sector.
In 2022, N386.650 billion was set aside for capital appropriation. As of half year, N36.604 billion was released and cash backed, but only N8.342 billion was utilised, meaning that N28.262 billion was not used for the good of the sector.
This utilisation or otherwise is critical for Nigeria’s all-important agricultural sector.
The Nigerian government has been quoted as stating that it would leverage the agricultural sector to ensure job creation in the country.
Data published by the World Bank show that the agricultural sector is responsible for 35 percent of Nigeria’s employment.
Nigeria’s agricultural land is at 70 million hectares, with 34 million hectares of arable land, 6.5 million hectares of land under permanent crops, and 28.6 million hectares under permanent meadows and pastures.
Despite these land masses and capacities, the Minister of Agriculture and Rural Development, Dr. Mohammad Abubakar, said that 56 percent of Nigeria’s arable land was under-utilised.
This development is also blamed on poor agricultural infrastructure in Nigeria, according to analysts. However, more money for capital expenditure in the sector, if fully and appropriately utilised, should ideally mean more developmental projects, experts add.
A Dataphyte report had earlier highlighted some issues faced in the agricultural sector, including infrastructure, that may have been led to the non-actualisation of its potential, with the report citing the need for Nigeria to direct its investment in the sector on critical infrastructures that can help farmers including smallholder farmers.
In a telephone interview with Dataphyte, Chief Executive Officer of Kenfrancis Farms, Ifeanyi Okeleke, said it was aunfortunate for the ministry to fail to utilise funds allocated to it when there were a number of challenges facing the sector.
“Many farmers in Nigeria still use hoes, cutlasses and other crude implements in rural areas. Why not use the money to buy plants and machinery to boost incomes and efficiency of farmers or even investors. Many agricultural areas have poor road infrastructures. Why not use it to rehabilitate those roads or build new ones? Are they not capital releases?” he asked.
He blamed the situation on civil servants who did not fully understand the structure of the Nigerian economy.
“The sector contributes over 20 percent to the Gross Domestic Product. So, it is useless to return the money budgeted when there are a lot of issues to fix,” he noted.