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PRESS RELEASE BY THE COUNCIL OF THE NIGERIAN ECONOMIC SOCEITY
[NES]
A SEARCH FOR FOREIGN INVESTMENT GONE TOO FAR
NES URGES GOVERNMENT TO STOP INVITATION TO WHITE ZIMBABWEAN FARMERS
The Council of the Nigerian Economic Society (NES) views with great concern what appears to be a serious government policy to invite White Zimbabwean farmers to settle in the country under the guise of attracting foreign investment into the Agricultural sector. Going by newspaper reports, not only is this being given serious consideration by the Federal government; some state governments are already working towards its implementation. In fact a delegation of the farmers is already in the country at the invitation of a state government, ostensibly for an exploratory tour,which includes a visit to the President. In the view of the Nigerian Economic Society (NES) this policy represents a search for foreign direct investment that has gone too far. We believe the government at sate and federal levels need a quick rethink and backtracking from this venture that portends great danger to the country’s future.
It is a fact that the country needs every kobo of investment we may be able to attract to the productive sectors of the economy from local and foreign sources. But it is not every form of investment that is likely to add value to out investment effort. If anything at all the value added from this particular category of investors is likely to be negative over the medium term and longer term. We did not need foreign investment to become leading world producers of cash crops like groundnuts, cocoa, cotton and rubber in the early sixties and seventies. Our inability to produce food crops to meet domestic demands such that we have to import food commodities like rice and palm oil among others, has very little to do with lack of domestic investment, or investible funds. Our agricultural sector prior to our discovery oil was thriving sector, which produced enough to feed us, as well as earning foreign exchange by the way of export of so-called cash crops. The decline in agricultural output and productivity has been due to a deliberate policy of neglect, coupled with the national cake-sharing syndrome. Rural farmers have succumbed to the general tendency of everybody wanting to abandon every other productive activity including agriculture, to concentrate on collecting presumed share of the national cake from oil wealth. If our agricultural sector is to be revived therefore, all we need at the moment is a reversal of this deliberate policy of neglect, not invitation to foreign investors to introduce large-scale farming.
The country is not ripe of large- scale farming that would radically transform the agricultural sector and displace smallholder farmers. Effective transition from small-scale farming to large-scale farming often needs to go hand-in-hand with industrial transition or rapid growth in manufacturing. This allows for the absorption of surplus labour that is released from agriculture. In the absence of this simultaneous transformations, artificially and prematurely introducing large-scale farming would either result in an enclave sector that would have little or no impact on the rest of the economy or at best accentuate the level of unemployment as small-scale farmers are thrown out of their small holdings with no where to go. Such isolated large-scale farming has resulted in enclave economies in most of Southern African countries where they have been trailed by complex economic, social and political problems as we are now witnessing in Zimbabwe. There are other countries where this remains a potential point of major future crisis if not tackled effectively.
Secondly large-scale farming succeeds only where it can rely on a thriving industrial sector or large government subsidies to ensure a minimum level of income for large-scale farmers. In addition they require minimum guaranteed income or prices to enable them weather through periods of large-scale disasters such as draught or widespread diseases that easily threaten them with bankruptcy. This is why agriculture in most highly industrialized countries produces powerful lobbies that are behind high level of protective government subsidies. It is true that in the absence of such disasters few farmers produce enough for the domestic market and or for exports. But costly disasters requiring heavy government subsidies are a regular and common occurrence in large-scale farming. The recent foot and mouth disease in the U.K. or the Asian bird flu which lead to the destruction of several birds and animals at the expense of the tax payers, or the occasional wide spread draught in the corn belt in the U.S are good examples. It is an oversimplification that once we invite large-scale farmers, they would increase agricultural output and productivity. There must be a strong industrial sector for the government and society to be able to absorb such costs when they occur. We at the moment do not have such a strong industrial base.
Having dealt with the pure economic arguments there are other areas of potential costs of the Nigerian society that may far outweigh the presumed short-term benefit of attracting direct foreign investment and increasing agricultural output and productivity.
First the farmers being invited are coming from a failed experiment in Rhodesia (now Zimbabwe). One wonders why our governments believe that we can make a success of an endeavor that failed woefully in Zimbabwe for too many obvious reasons. Just to mention some of the potential social costs in the medium term to the longer term:
White farmer settle communities in Southern Africa have remained enclave communities that have been unable to integrate with the rest of society. At best they maintain master-servant relationship with the communities around them from which they employ few casual labour. The potential for future resentment and racial conflict becomes quite enormous in such situations. We have enough of intra-ethnic tensions in the country already, and we live peaceably with the few whites who mingle easily with the rest of society. Must we now add a racial dimension to our national problems by creating white enclave farming communities?
Unlike other forms of foreign investment especially in manufacturing, this is a form of investment that would require re-allocation of a very sensitive factor of production-land. We already have enough communal clashes all over the country arising form claims and counter-claims to land possession such that we do not need to exacerbate this by bringing in foreign investors who would dispossess local communities of their land.
While it may sound too harsh there is a sense in which these white settler farmers may be compared with other negative by-products of European colonial legacy and careless use of resources in Europe. They were shipped to Zimbabwe, which is now rejecting them. Their investible funds and presumed skills notwithstanding, why is Britain or any other country not eager to absorb them other than our country Nigeria?
Finally there is need to examine our foreign dependence syndrome. We believe we cannot make progress on any front or tackle any problem on our own without having to rely on some form of foreign assistance or intervention. What has happened to our policy of self-reliance once enunciated in the past? Aren’t there some areas where we can help ourselves without rushing out to seek foreign assistance? The NES believes there is a lot we can do on our own to be self-reliant and self-sufficient in food production and agricultural production without going after potentially harmful foreign investment or foreign aid. We therefore urge the Federal government to stop this potentially dangerous policy on its tracks. Our agricultural sector does not need Zimbabwean farmers to improve. It is a form of foreign investment that would do the country more harm than good if not in the short run, certainly in the medium and longer term. It would only increase our social, political, as well as economic problems in the near future enormously with little to show by way of benefits.
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Professor S.O. Olofin
President, Nigeria Economic Society NES
C/o Economics Department, University of Ibadan, Ibadan
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