Obasanjo blames high food prices on devaluation, poor debts management
Calls for deployment of technology in agriculture
A one-on-one with former President Olusegun Obasanjo, who for no clear reason is not too compatible with the press, is a big deal actually. And two things are involved: getting him to talk and managing the process so that Baba is not provoked to abandon the dialogue halfway through. The questions must be right and their presentation must follow a pattern that is agreeable. On this day, in Iowa in far away United States, The Guardian’s experience matched the billing. The Guardian needed only 10 minutes, but the prologue occasioned mainly by the antics of some overzealous aides of the former president had taken twice as much time. The aides warned against asking “any questions relating to politics and economy; only agriculture and what happened here in the World Food Prize.”
Truce was made, and although Obasanjo did not look scared of any questions, The Guardian stuck to the agreement. Alas, it was the General himself who raised a lot of economic issues regarding devaluation, debts management, inflation, and policy inconsistency when he was asked to place the puzzle of rising food prices in Nigeria, in spite of all the interventions in agriculture.
He began with when I observed that the one take-away for me at this World Food Prize is the efforts to eliminate global hunger. But that when you looked at Nigeria, the common man remains very hungry as he can no longer afford to buy essential foods with prices hitting the roofs, which has also been confirmed by the Nation Bureau of Statistics.
To this he said: Well you have hit a very important point. For any country, the management of the economy must take two things very, very seriously – inflation and debts. What inflation means is that it reduces the value of the money you have in your pocket. What you are buying for 10, once your money is devalued, which is what inflation means, now you will be buying for 20, if it devalue by 100 per cent. If you devalue for 200 per cent, you will be buying for 40 what you should be buying for 10, and that is what has happened to us. It is not the prices of food as such, but the value and it has affected everything because there is nothing that you produce that doesn’t have some element of external input, nothing. So that external input affects it.
The other thing is debt. One of the things we learn in our culture is that a man of sense dread debt, and runs away from debt, because debt is excruciatingly debilitating. It’s ticking like a clock, you get debt, and the interest keeps on going on. It doesn’t matter whether it is Sunday or Monday, it has no holiday.
Expectedly, the journey even on the agreed terms wasn’t without hiccups. The General would want it always on his own terms in spite of the bilateral understanding earlier reached. He was interrupted twice and thankfully, there was no eruption.
But he became a bit ruffled when I noted that he is in agriculture as well as Africa’s richest man, and yet Nigeria is not gaining the kind of momentum expected from agriculture.
In his characteristic style he bluntly retorted: Well I don’t think you are right because agriculture is a difficult thing. As an enterprise to go into, it’s not easy or even glamorous, but even in spite of that we have made some progress, and you shouldn’t underrate that progress. For instance, even the time that I came in, cocoa had gone down to 150,000 metric tonnes a day. By the time we left office, it had gone up to 400,000 tonnes a day. Our cassava production was at 30 million metric tonnes when I came into government as the elected President, by the time I left, we had gone up to 50 million metric tonnes a day. And in fact, that was what made us to say, add 10 per cent of cassava floor into bread. Well when we left government, they didn’t continue with it. I think now we are trying to continue with the scheme. But I think that part of our problem is to start, stop, start again, then stop again; so there is lack of continuity, so you are not right to say that we are not making any progress.
… I said gained enough momentum, the kind that we were expecting (I cut in) and then we agreed on a point:
Yes, we haven’t made as much progress as we wished, but I have also said that may be God wanted us to make the right progress that’s why the price of oil has gone down. That’s why they have misbehaved and squandered the money that we should have kept, so that so that we would be more sensible than we have been.
It was getting interesting. Chief Obasanjo was gradually stepping into a talking mood, and an auspicious moment to burst the agreement and ask this difficult question:
Despite the progress you insist we have made, we are still importing a lot of our food, and the money you said we are saving from oil now that prices are down, we are instead spending on importing food. The pyramids too are not springing up anymore:
Again he disagreed, saying: That’s part of the misjudgment of our situation. When the pyramids were there, we were not processing. I’m not saying that we are processing now, but when the pyramid was there, we were not processing. We were taking groundnuts out of the country to be processed everywhere, and anywhere, so I don’t expect the pyramid now. I expect that we would produce groundnut, and we will process and we would turn the processed groundnut into vegetable oil that will be used locally or that will be exported, or groundnut cakes that will be used for feed in livestock feed production. So, you telling me about pyramid is actually you are not hitting it right. I’m not saying that we are producing as we should but comparing pyramid of the past with no pyramid now is not it.
…The reason I raised the issue of the pyramid is because even the little that we are producing in terms of export since we are talking about adding value, are being turned down at the destination markets and that means that we are not getting the standards right.
Only to agree again: No, because some of the things that we should do, we are not doing them. Let me give you the case of yam. Any yam exported out of Nigeria will be called Ghana yam in Europe, and in America, and you know Ghana has what they call standardisation process. They stamp it as having passed through those processes, and we haven’t built that. Afrexim Bank is just trying to build that for us, so that any agro-processed or agro-product can pass through that standardisation and stamped before it can be acceptable. And so until we do that, we will not be able to.
The General is still apparently vexed by the decisions of his successors to overturn some of his economic policies. And he was blunt in making the point even as he gave his administration a pass mark for the milestones achieved in poultry, cocoa and rice production. Perhaps, it would help to deliver a more direct question:
Then in that case do you think the government of Nigeria for instance, is doing enough to push agriculture forward in terms of policies?
Demonstrating with his hands he said: We do it at one time, we raise it, and then we come down; we raise it, we come down, we raise it and come down.
…Why are we not consistent? (I challenged)
Well because most governments do not continue. You have a government that comes in, and gets it right; and we have another one that comes in and gets it wrong. Let me give you an example. When I was military head of state, we got it right in poultry, and we were self-sufficient in poultry. We got it right in producing rice. We were so sufficient. But the government that took over from me, opened up importation of poultry, opened up importation of rice, and those who were producing rice locally got discouraged. So if what you do (demonstrating with his hands again), is to go up and go down, you go up, and you go down, then you get that type of thing.
Having bared his mind about poor management of some economic issues, Obasanjo ended the session with a call for the use of more technology in developing the agriculture sector, noting that Nigerians are not being resourceful enough, as there are many available technologies to achieve greater milestones than already have.
Since politics was one of the no-go areas, I decided to ask indirectly if the Nigerian government was doing enough to boost agriculture, seeing as Africa is said to host over 65 per cent of the global arable land
He bluntly said no, saying: Actually before we even talk of using that extra 60, the one we have, we are not using it to maximum production, because we have not applied all the technology that we have that is there. We have to, like you heard him (Akinwunmi Adesina, AfDB President) say, now that there is rice that research has produced that can give up to five to six tonnes per hectare, more than what our people are producing. We also have cassava; I just sent somebody to Thailand, and in Thailand they have cassava that produces 70 tonnes per hectare, and I believe the highest we have produced, our IITA said they have one that can produce almost 40 tonnes per hectare. But in the real farm condition, maybe 18 to 20 tonnes. So let us use the technology and application of fertiliser. How much fertiliser are we applying? And when the nutrients in the soil are not there you don’t get as much as you should get.
Regardless, it was a well-utilised 10 minutes, which started with acknowledging his contributions in pushing the African Development Bank (AfDB) President, Akinwunmi Adesina to global limelight, leading to his award of the $250,000 worth World Food Prize, which was the epic of the awards with the attendant glitz and glamour.
Although he tried to shy away from taking the credit, but I insisted on knowing how he felt that one of his protégé brought home the World Food Prize award.
Any Nigerian who gets any accolade particularly global accolade in the World Food Prize should make any Nigerian happy, particularly any Nigerian whom I identified as somebody who should be watched for what he has shown in terms of ability. And as you rightly said, somebody whom I have tried to sort of nurture, mentor, and guide, so I am very happy. And it also shows that even amongst us, no matter what our situations may be, there are people who have such abilities.
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