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Business News of Wednesday, 4 May 2022

Source: punchng.com

Ranching, others’ll deliver N2tn return on investment – FG

Picture used to illustrate the story Picture used to illustrate the story

THE livestock programme being implemented in selected states across the country under the National Livestock Transformation Plan is to deliver an investment return of not less than N2tn to the Nigerian economy, the Federal Government has said.

It said about nine per cent of the Nigerian economy valued at approximately N2.9tn was made up of the livestock sector, adding that the NLTP had been planned to deliver adequate returns to investors.

A total of 119 ranches are to be created under the NLTP within a 10-year period beginning from 2019, while pilot ranches in grazing reserves are being developed in seven pilot states including Adamawa, Benue, Kaduna, Nasarawa, Plateau, Taraba and Zamfara.

Explaining the economic rationale for the NLTP in the programme’s strategy document obtained by our correspondent from the Federal Ministry of Agriculture and Rural Development in Abuja, the Federal Government said part of the strategy was to develop a blueprint for sustainable development of ranching in Nigeria.

It said, “Fundamentally, the NLTP is about creating the conditions to launch the peaceful transformation of Nigeria’s livestock ecosystem. If successful, based on internal modeling, the NLTP will deliver an investment return worth at least $2tn to the Nigerian economy, her investors, and households.

“These stakeholders will earn a return in various forms, e.g. improved tax revenues, new job opportunities, protection of life and liberty, etc. While precise pathways may vary, e.g. via improved business context, or the elimination of violent conflict, the end game is the same.”

On the projected impact of the NLTP on the country’s Gross Domestic Product growth, the government explained that livestock currently accounts for nine per cent of the size of agriculture in Nigeria’s economy or approximately N2.9tn in value.

“The majority of that nine per cent is domiciled in the target states indicating that the successful execution of the strategy will have a material knock-on effects,” it stated in the document.

It added, “Note that these are production states, while what modernisation involves is an overhaul and expansion of the entire value chain from production to processing to distribution to retailing.

“That broader value means that while a cow may be raised in Taraba eating fodder grown in Benue, a meat processing/packing plant in Enugu might process it into steaks and sausages, while a wholesale distributor in Benin and Ibadan handles shipments to private buyers like Shoprite and Meat Masters. Thus, the impact of the intended strategy will likely be across the federation.

“Modernisation, including labour capabilities, business models, technology utilisation, and related assets, will result in an average growth rate of about 710 per cent per annum in terms of sub-sectoral GDP growth. By 2028, the sub-sector would be worth approximately N88.16tn, a 2.56 per cent growth over the next decade.”

It further noted that based on current average wage rates and labour force participation rates, a significant level of job growth would emerge from the modernisation of the sector.

“Assuming labour’s share of GDP is about 30 per cent, starting from a job base of 1.08 million jobs, job growth in the sub-sector will rise to 2.12 million by 2028,” the government stated.

It explained that the mix of jobs to be created would largely be a mix of technical roles (veterinarians, plant operators), unskilled workers (farmhands, feedlot hands), and farm managers.

It noted that outside of production, additional job growth would emerge such as processing technicians, factory packing roles, transporters from rail to trucks, and warehouse managers.

The NLTP document pointed out that retail jobs such as supermarket in-house butchers and aisle stocking teams would also be created and would be present across the country.

It said, “Given this anticipated mix, average wages will likely rise to about three per cent during this period.

“Wage growth is expected to be sharpest among unskilled workers who will now have round the year work at stable ranches and meat processing plants.”