Plateau State is among the states in Nigeria that are 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 has no reason to be in this financial mess.

However, the people on the plateau have found themselves in this predicament because they 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 should 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 the empty projections of political sloganeering, with its empty promises of projected internally generated revenue and jobs to be created, without specifics on how to deliver on such.

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 to generate N170 billion in revenue if the government can commit just 10 per cent of its arable land to the cultivation of this agricultural commodities.

Let me also point out that the facts stated 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 per cent, this state 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 these include that: the state is using just 10 per cent (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 $600/MT FOB Lagos (even though it can be as high as $750), cost of farming was put at N250,000 per hectare based on some research works and 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 $1,424,471,040. Using a conversion rate of N285 to 1$, this amount to N405, 974,246,400. The unit cost of farming sugarcane and exporting are N250,000 per hectare and N40,000 per MT. The total cost of farming plus 50 per cent profit on the sales to the government (or to the trading company engaged by the government) comes to N44,514,720,000 and the total cost exporting (transport, documentation, freight forwarding etc) comes to N94,964,736,000. The total project cost (farming and exportation) will be about N139,479,456,000. The estimated profit that can accrue to the state on this project comes to about N266,494,790,400.

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 per cent 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 purchase of improved varieties of seedlings and other farm inputs for registered farmers and cooperatives, train the farmers on the best farm practices using Agriculture professionals and extension officers, provide a guarantee to the farmers to purchase the harvested crops from them at a pre agreed price, partner with a trading company for marketing and export of the commodity and share proceeds and 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 improve the economy of the state to the part of greatness within few years.

The state will not only become self-sufficient but numerous jobs will also be created with several socio-economic benefits. As Africa’s leading export consulting firm, we will be willing to partner with governments to explore the export potential of each state.

Culled from The Nation

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Simple ways that Plateau can quadruple its internally generated revenue