The agriculture sector has been stunted, no thanks to disruptions, caused by the poor power supply, DANIEL ESSIET reports.
Unless something is done urgently to address the power crisis, Nigeria’s foreign exchange earnings from agro export would continue to be affected.
One of the affected areas is the Federal Government’s $7 billion cashew export target.The cashew value chain is considered one of the most lucrative sub-sectors, with the global cashew kernel market expected to grow from $5.394 billion in 2019 to $6.932 billion in 2025 at a compound annual growth rate (CAGR) of 4.27 per cent, according to Research and Markets, the world’s largest market research store.
Speaking with The Nation, the Managing Director, Vertex Agro Limited, a cashew processing and exporting firm, Daniel Gemana, noted that cashew processing had been quite challenging and that they had been forced to reduce their production, considering that the low power supply, one of the two most crucial components of the process.
As a result of power outages, he said the company had been forced to run on diesel, which it buys at N800 per litre. He said Nigeria’s inability to supply and distribute sufficient electricity has left production at the mercy of alternative energy sources such as generators that consume diesel and petrol. Sometimes, it takes 40 per cent of the total production cost, hence agro processors are forced to pay more to keep up production.
His company has built a cashew processing facility to promote exports of cashew products. This was in response to the development that more than 90 per cent of raw cashews grown in West Africa are exported for processing due to poor processing infrastructure.
Gemana explained that the company is into processing and exporting of sesame seeds, adding that the company has markets in Brazil and Dubai.
He pointed out that many of the processors were operating below the installed capacity due to erratic electricity supply.
According to him, many agro businesses had suffered a decline in production owing to power cuts, while others have been forced to change their production plans.
He alleged that he hardly get four to five hours of electricity per day, forcing him to use generator which cost so much per unit of power consumption, which will increase with rise in diesel rates.
Since export is priority, Gemana noted that agricultural enterprises should be given consideration in power supply.
Chief Executive, Niji Foods, Kolawole Adeniji, agreed that power supply to the agriculture sector is unscheduled and unpredictable and that this had raised production costs.
He noted that farmers were badly hit by power cuts, which burdened them financially.
Analysts said power cuts pose a threat to food safety due to the average temperature of a freezer or a refrigerator being affected.
The Nigerian Rural Electrification Agency (REA) and RMI, a non-profit organisation, have launched the Energising Agriculture Programme (EAP) to stimulate the use of mini-grid electricity in agricultural productive uses.The EAP focus is on enabling market-led solutions and breaking the silos separating electrification and agricultural development.
Over the next three years, the EAP initiative will foster a pipeline of agriculture-energy projects that demonstrate the impact of collaboration across the energy and agriculture sectors. .
As part of the GEAPP’s efforts to bring reliable electricity to one billion people by decade’s end, avert four billion tons of greenhouse gases and 150 million green jobs that generate inclusive economic growth, the EAP will build on agriculture and electrification initiatives in Nigeria and then accelerate the deployment and adoption of the most effective solutions for rural communities across the country.
Experts estimate that Nigeria’s agricultural sector, which provides nearly one-quarter of the country’s Gross Domestic Product (GDP) and employs two-thirds of the labour force, has the potential to generate $40 billion in exports.
”As the renewable energy space improves yearly, we have continued to keep a keen eye on the deployment of programs and solutions geared toward socio-economic impact in unserved and underserved communities across Nigeria. The EAP is one of those programmes.
“This programme encourages the productive use of energy to deepen our objective of organising and managing the agricultural sector in Nigeria. Leveraging renewable energy technologies for productive use in off-grid communities greatly helps to strengthen production capacity of the average farmer in rural communities. The EAP is in line with our mandate at the Federal Ministry of Agriculture and Rural Development toward strengthening agriculture and rural development across the country,” said the Minister of Agriculture and Rural Development Dr. Mohammed Mahmoud Abubakar.