The state of Plateau is among the states in Nigeria that is currently
running on deficit according to BudgIT. This is really unfortunate because this
state is among the few in Nigeria that has a double in the sense that it has
huge deposit of solid minerals with export potential in addition to its
agricultural potential.
Plateau state has no reason to be in this financial mess. However, the
people on the plateau have found themselves in this predicament because their
leaders have not learnt how to harness the state potential in both agriculture
and solid minerals to generate enough revenue to meet her obligations.
This article therefore was written to show the state a way out in
practical sense with the numbers that are well researched and not just
speculation on what could be done. This article is a departure from what our
leaders are used to. They make promises of projected internally generated revenue
and jobs to be created. They give us numbers which have no foundation, no basis
and are therefore not realistic and we the citizens have failed to ask the
question "HOW". We are usually indifferent and do not bother about
the specifics. Then, they get elected and begins to tell us their challenges
and why they cannot fulfil their promises.
The time has come for us to begin to tell the leaders what they need to
start doing in order to redirect their various states to the path of economic
progress. In this article, we will be examining how the farming and exporting
of sugarcane can help plateau state to generate N170 billion in revenue if the
government can commit just 10% of its arable land to the cultivation of this
agricultural commodities.
Let me also point out that the facts raised in this paper are based on
the data obtained from different research done by Central Bank of Nigeria,
National Bureau of Statistics, Ministry of Agriculture and some universities in
Nigeria.
Plateau state produced about 28,000MT of Sugarcane in 2012. Using the
national average of about 38%, this state currently has arable land that is
about 1,187,059.20 hectares of lands. We have made some reasonable and very
conservative assumptions in this analysis and this include that:
-the state is using just 10% (118,785.92 hectare) of this land for
sugarcane plantation
-the yield per hectare of sugarcane is 20MT per hectare (even though,
there are varieties that can yield more than this) this yield was used to make
provisions for losses that might occur during harvest
-the unit price of sugarcane is USD600/MT FOB Lagos (even though it can
be as high as USD750)
-cost of farming was put at N250,000 per hectare based on some research
works
-cost of exporting per metric tonne was put at N40,000 base on the
export projects I have handled in the past
With a yield of 20MT per hectare, this means that the state can produce
2,374,118.40MT of sugarcane on the land size stated in the assumptions above.
If this sugarcane is exported at a free on board (FOB) price of USD600/MT, the
total proceeds will be USD1,424,471,040.00. Using a conversion rate of N285 to
1USD, this amount to N405,974,246,400.00. The unit cost of farming sugarcane
and exporting are N250,000 per hectare and N40,000 per MT respectively. The
total cost of farming plus 50% profit on the sales to the government (or to the
trading company engaged by the government) comes to N44,514,720,000.00 and the
total cost exporting (transport, documentation, freight forwarding etc) comes
to N94,964,736,000.00. The total project cost (farming and exportation) will be
about N139,479,456,000.00. The estimated profit that can accrue to the state on
this project comes to about N266,494,790,400.00.
According to data obtained from government sources, the IGR of the state
for the year 2014 was about N8,280,000,000. from the analysis we have done on
farming and exportation of sugarcane, the state could grow her revenue by about
2000% from this source alone.
To implement the option put forward in this article, here are some of
the steps that the state will have to take. The state government should:
1. Purchase of improved varieties of seedlings and other farm inputs for
registered farmers and cooperatives
2. Train the farmers on the best farm practices using Agriculture
professionals and extension officers
3. Provide a guarantee to the farmers to purchase the harvested crops
from them at a pre agreed price
4. Partner with a trading company for marketing and export of the
commodity and share proceeds
5. Buy the farm produce from the farmers on credit and pay them upon
receipt of export proceeds from buyers abroad
We strongly believe that if the government of Plateau state can adopt
this commodity as a means of revenue and implement the strategies suggested, it
will naturally rebound the economy of this state to the part of greatness
within a years, the state also becomes self-sufficient and numerous job will
also be created as collateral benefits.
For questions on
this thought, you can reach me via email to bayemibo@3timpex.com
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