Post by Trade Coach on Dec 26, 2017 18:41:58 GMT 1
The recent invasion of a Kaduna warehouse belonging to frontline agribusiness entity AFEX Commodities Exchange Limited (AFEX Nigeria) by officers and men of the Nigerian police is an immediate cause for concern in the Nigerian agribusiness community. while it is not uncommon to hear news of warehouses raided by robbers or razed by arsonists, when the Nigerian Police, the national symbol of protection and security, makes a dramatic incursion upon a warehouse belonging to a corporate citizen with firearms and in uniform, it raises cause for concern, of a different kind. This is all the more because of the importance of the agricultural sector to the Nigerian economy, as exemplified by the current emphasis placed on it by the present administration. Beyond agriculture, it also has implications on the larger economy, particularly in relation to the state of the Nigerian business environment.
Between the term and the practice
Coined in 1957 by Goldberg and Davis as a portmanteau of “agriculture” and “business,” denoting the business of agricultural production, the term has gained prominence in Nigeria in recent years Ndidi Nwuneli, a sectoral specialist, defines agribusiness as “… businesses engaged in all aspects of agriculture, from the provision of inputs such as seeds and fertilizer, to farming, processing, marketing, distribution and retail sales.”
Accordingly, agribusiness when utilized refers to the range of activities and disciplines surrounding modern food production. From a conceptual point of view, the term agribusiness hinges on the notion that for agriculture to be sustainable, it needs to be viewed as a business. Thus, all aspects of the food and fibre value chain and those institutions that influence it are part of the agribusiness system. Hence, the scope of agribusiness is a complex value-added chain that begins with the farmer’s purchase of inputs and ends with a product sitting on the consumer’s table.
How conducive is the Nigerian environment?
Year after year, the Nigerian business environment had been adjudged by global statistical records to be unfriendly to business. While countries like India (ranked 130 in 2016) and Russia (ranked 51 in 2015), among others, are taking measures to better their chances of attracting Foreign Direct Investments, Nigeria’s polling has consistently diminished, falling from 124 in 2008 to 169 in 2016. Other African countries like Rwanda reversed their negative business image from 142 in 2008 to 56 in 2016 and Ghana has hovered around 87 in 2008 and 108 in 2016.
While it may be urged that there is disequilibrium between the Ease of Doing Business (EDB) ranking and real economic performance in some countries, the examples of these three African countries give credence to the plausibility of the ranking. It is pertinent to state that the purpose of the ranking is to juxtapose countries against each other based on the amenability of their legal and regulatory environment to business operations and the protection of property rights.
Economies with a high rank have simpler, predictable and consistent frameworks for regulating business while those with a low rank, like Nigeria, present a more complex and topsy-turvy state of affairs. This implies that since 2008, the complexity of setting up agribusinesses in Nigeria, ranging from bureaucracy, infrastructural deficit, riotous taxation regime and insecurity have all but spiked, making it difficult for agribusinesses to thrive. As earlier noted, Ghana is largely stable while Rwanda is ascending unprecedentedly. Little wonder that Rwanda is currently the fastest growing economy in Africa.
Between the term and the practice
Coined in 1957 by Goldberg and Davis as a portmanteau of “agriculture” and “business,” denoting the business of agricultural production, the term has gained prominence in Nigeria in recent years Ndidi Nwuneli, a sectoral specialist, defines agribusiness as “… businesses engaged in all aspects of agriculture, from the provision of inputs such as seeds and fertilizer, to farming, processing, marketing, distribution and retail sales.”
Accordingly, agribusiness when utilized refers to the range of activities and disciplines surrounding modern food production. From a conceptual point of view, the term agribusiness hinges on the notion that for agriculture to be sustainable, it needs to be viewed as a business. Thus, all aspects of the food and fibre value chain and those institutions that influence it are part of the agribusiness system. Hence, the scope of agribusiness is a complex value-added chain that begins with the farmer’s purchase of inputs and ends with a product sitting on the consumer’s table.
How conducive is the Nigerian environment?
Year after year, the Nigerian business environment had been adjudged by global statistical records to be unfriendly to business. While countries like India (ranked 130 in 2016) and Russia (ranked 51 in 2015), among others, are taking measures to better their chances of attracting Foreign Direct Investments, Nigeria’s polling has consistently diminished, falling from 124 in 2008 to 169 in 2016. Other African countries like Rwanda reversed their negative business image from 142 in 2008 to 56 in 2016 and Ghana has hovered around 87 in 2008 and 108 in 2016.
While it may be urged that there is disequilibrium between the Ease of Doing Business (EDB) ranking and real economic performance in some countries, the examples of these three African countries give credence to the plausibility of the ranking. It is pertinent to state that the purpose of the ranking is to juxtapose countries against each other based on the amenability of their legal and regulatory environment to business operations and the protection of property rights.
Economies with a high rank have simpler, predictable and consistent frameworks for regulating business while those with a low rank, like Nigeria, present a more complex and topsy-turvy state of affairs. This implies that since 2008, the complexity of setting up agribusinesses in Nigeria, ranging from bureaucracy, infrastructural deficit, riotous taxation regime and insecurity have all but spiked, making it difficult for agribusinesses to thrive. As earlier noted, Ghana is largely stable while Rwanda is ascending unprecedentedly. Little wonder that Rwanda is currently the fastest growing economy in Africa.