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Why the RUGA settlement initiative never made economic sense

Thanks to the public backlash that heralded the Federal Government’s proposed plan to implement a policy establishing Rural Grazing Area (RUGA) settlements for Fulani herdsmen, President Muhammadu Buhari announced, yesterday, that the plan is hereby suspended.

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Thanks to the public backlash that heralded the Federal Government’s plan to establish Rural Grazing Area (RUGA) settlements for Fulani herdsmen, President Muhammadu Buhari announced, yesterday, that the plan is hereby suspended.

Why was there ever the need for RUGA? 

The Government’s decision to introduce the RUGA settlement initiative was informed by the seemingly endless dispute between Fulani cattle herdsmen and farmers. As you may well know, the dispute has caused the deaths of thousands of Nigerians.

In defense of the RUGA, the Presidency had promised that the initiative will bring about a drastic reduction in the conflict between herders and farmers. RUGA was also envisaged to boost animal production. But despite these positives, many Nigerians were not quite happy with the move. Little wonder the initiative was met with widespread condemnation. Some Nigerians even alleged that the initiative is a preconceived attempt to “Islmatise” some parts of the country.

President Buhari and his cattle in Daura

President Buhari in Daura

A “No-Good” Policy

Without a doubt, there is a pressing need to amicably resolve the farmers versus herdsmen problem once and for all. However, Nairametrics believes that the RUGA move by the Buhari-led Federal Government could not possibly have been the best solution. This is mainly because the initiative does not make any economic sense. Below are some of the economic blunder the RUGA initiative could have triggered.

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[READ FURTHER: REVEALED: Why some states may not get World Bank’s $700 million]

1. First of all, the billions of naira worth of “investments”: Note that the Presidency had earlier made it clear that the National Livestock Transformation Plan (NLTP) which was introduced in June 2018, is not the same as RUGA.

  • The NLTP is a whopping N170 billion initiative by the Federal Government to champion ranching as the way forward for cattle rearing in the country. While this is already huge, more billions will go into RUGA.
  • The billions will be assessed by cattle herders as they are expected to be registered with a cooperative for the purpose of the ranching schemes.
  • Note that according to the Presidency, 13 States are already in the process of implementation of NTLP to transform the livestock production system in Nigeria along a market-oriented value chain while ensuring an atmosphere of peace and justice.

2. Too expensive for the Government to fund: According to statements recently released by the Permanent Secretary of the Federal Ministry of Agriculture and Rural Development, Mohammed Umar, RUGA settlements have already started springing up. A total of 11 states have so far been designated as pilot states.

  • These states include Sokoto, Adamawa, Nasarawa, Kaduna, Kogi, Taraba, Katsina, Plateau, Kebbi, Zamfara, and Niger.
  • As stated by the Presidency, the RUGA settlement initiative would secure land from “willing states” to build schools, clinics, houses, and other infrastructure which would facilitate the nomads’ settlement in those locations.
  • To say the least, the plan is for these RUGA locations to become mini towns. Providing these facilities will obviously gulp billions of the country’s already depleting revenue.

3. No clear-cut pathway to investment recovery: It is unclear how the Government intended to recoup the billions of naira worth of investments that would have been made if the RUGA initiative had been implemented. In other words, this could as well have been another socialist initiative, characterised by  “Jamboree” money splashing by the Government.

[KEEP READING: Petty traders in Niger State gets FG’s TraderMoni fund]

4. The threat of increased insecurity: There is the probability that the implementation of the RUGA initiative could eventually encourage insecurity. This is because as herdsmen increasingly multiply within communities, the possibility of friction between indigenes and immigrant herdsmen abounds.

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In other words, full-blown conflicts may ensue in some states, especially those whose citizens are were gearing up to vehemently resist the Federal Government’s attempt to secure the states’ lands for herders’ settlements. The sovereignty of states’ lands resides in the state governments who can choose to allocate such lands to the Federal Government.

[READ THIS: FSDH explains why the Government should issue zero-coupon bonds]

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In Conclusion…

RUGA’s suspension is a move in the right direction. The Federal Government of Nigeria should probably consider learning a few things from other countries around the world who, through very strategic private sector participation, have been able to turn around their Agric sectors. Typical examples as regards cattle production are Brazil, Israel, Singapore, and Australia.

  • Brazil, for instance, is the world’s highest cattle producer with 1.46 billion herds.
  • Singapore tactfully introduced measures to stop open grazing which has ultimately resulted in the modernization of the country’s cattle industry.
  • Also, Israel is reputed to have the highest milk yield per cow, all thanks to the cutting edge techniques it adopts.

In order for any country to truly diversify its economy, the need to fully engage the private sector can never be undermined. Therefore, it is high time private sector investors are encouraged to tap into the opportunities offered by the cattle industry. The Government’s role here should be to regulate.

 

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Samuel is an Analyst with over 5 years experience. Connect with him via his twitter handle

1 Comment

1 Comment

  1. Anodebenze

    July 5, 2019 at 12:54 pm

    The main issue here IS THIS GOVT HAVE A MAJOR ISSUE OF TRUST AND THE NEXT IS TRUST AND ANOTHER IS TRUST,before this ruga IDEA,i did read that this govt will fund this herdmen like they did with small-scale farmer..i thought the govt will give those herdsmen some money to buys some land for their ranching just like Mr buhari,he does have a ranch or not he have have about 189 cows in Daura
    Now no matter,how noble this ruga idea will become,people are kicking against,and the next major issue no herdsman was arrested for any killing,nobody was brought to justice.THIS GOVT IS BRINGING AND CREATING THIS NEW PROBLEM FOR THEMSELVES
    Now we have vigilantes in Taraba and Benue State doing this freelancing killing against herdsmen and their cattle.now this reversal of killing is being done as vegenance,instead of the govt nipping this killing in the bud,they grew into this bigger problem for this govt

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Business

Sanwo-Olu speaks on need to resolve community’s agitations for tank farms relocation

Sanwo-Olu called stakeholders to come together in order to provide a lasting solution to the issue.

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Lagos introduces Dropbox facility for land documentation, China Development Bank, Sanwo-Olu sign $629m facility to complete Lekki Deep Seaport , Lagos State Government seeks partnership with insurance operators, Bond Issue: Lagos State Government to raise N100 billion for infrastructural development, Lagos State threatens to shut down Adron, Almond, 103 other estates for lacking approval

The Lagos State Governor, Babajide Sanwo-Olu, has listed conditions that must be met, in order to bring a lasting solution to the dispute between petroleum tank farm owners at Ijegun-Egba area of Amuwo Odofin and the residents of the host community.

One of these conditions is that tank farm owners and petroleum tanker drivers must subscribe to operational regulations that limit the loading of tankers beyond their weight capacities. Also, all Federal Government’s regulatory agencies operating in the area must stop working at cross purposes with the state’s agencies, in the bid to address the environmental degradation in the area.

The governor also stressed that both the federal and state authorities should collaborate on the regeneration efforts of road and infrastructure in the area.

This disclosure was made by the Lagos State Governor on Thursday, August 13, 2020, in Marina, while receiving members of the House of Representatives Ad-Hoc Committee on the Relocation of Tank Farms. The Committee, which was constituted by the Speaker, Femi Gbajabiamila, was also intended to investigate and make recommendations on the issue.

The Hon Sergius Ogun led Ad-Hoc Committee had initially gone on a two-day inspection to Ijegun before sharing the findings with the Governor.

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During the meeting, the governor pointed out that the regeneration of Ijegun-Egba was as important to the community as smooth transportation of petroleum products was important to the tank farms’ owners. He warned that the country could not afford to allow the host community’s agitation to hinder the operations of the tank farms, which, he said, supply 45% of petroleum products consumed in the country. The governor said:

“The Ijegun-Egba tank farms are strategic national assets created by the private sector to serve the whole country. Between 40 to 45% of the entire petroleum products that go across the country pass through that corridor. Even if it is to cater for our own need, we must take care of those assets, because they are like a strategic reserve for us as a nation.

“The rudiment of the problem in the area is a logistic issue, which is to ensure the movement of oil tankers in and out of the area without affecting the wellbeing of the community members. We have had to contend with environmental issues and the extent of the bad road network on the corridor is glaring. We have seen how small-capacity tankers are carrying up to 70,000 litres of petroleum products when they should be taking only 30,000 litres. This has exerted great pressure on the roads and the officers that are supposed to monitor them look away.

“These are part of the issues we need to resolve with the stakeholders. If we can let these people run their businesses within the confines of regulations, part of the solutions would have been achieved in the process. Also, there is a need for total regeneration of the roads in the area. We want the environment to be conducive for business, but we must do that in line with the safety of lives and property. We have talked with tank farms’ owners and we all need to come together. It is important for the Federal Government’s agencies to have an agreement and we are ready to play our own part.

The committee was set up following the agitations and demands by residents of Ijegun Egba Satellite Town for the immediate relocation of the tank farms in the residential area. This, according to the residents, would help to prevent further environmental degradation and loss of lives and property in the area.

The host community accused tank farm owners of disrupting the drainage system, damaging roads within the community, and even converting roads to parking lots for their tankers.

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The Governor stressed that genuine solution would be achieved if the entire network of infrastructure in the host community was cleaned up and regenerated. He, however, revealed that the new regeneration design that the state came up with could not take off because the federal authorities had not agreed with the plan.

Furthermore, Sanwo-Olu noted that it is high time for all the stakeholders to come together in order to provide a lasting solution to the issue.

After your thorough assessment of the situation, I hope you would be able to call all relevant stakeholders and agencies of Government together on the discussion table. We are committed to any effort that’ll bring a permanent solution. We know how much of investment we have in the area, but businesses have to be done under a safe and controlled environment. We want every stakeholder to play their roles,” he said.

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Making his own remark, the Chairman of the Ad-Hoc Committee, Hon Ogun, admitted the inability of the Federal authorities to work collaboratively with the Lagos State Government was part of the reasons the community’s agitation festered. He, however, promised that the House would prevail on the federal agencies to close ranks with stakeholders and bring about lasting solutions.

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FEATURED

Official: Imo State is unemployment capital of Nigeria

According to NBS, 75.1% of the total employable people in Imo State are either underemployed or unemployed.

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Ogun, Imo States give free hand sanitizers

Data from the National Bureau of Statistics reveal Imo State, located in the South-Eastern part of Nigeria has the highest unemployment rate in the country.

In contrast, Anambra State is the state with the least unemployment in the country with 13.1% unemployment rate. The national average for the unemployment rate is 27.1%

Imo State has an unemployment rate of 48.7% as at the second quarter of 2020, by far the highest when compared to any other state in the country.

According to the data, 75.1% of the total employable people in the state are either underemployed or unemployed.

READ MORE: Nigerians react as Anambra lawmakers reject Prado SUVs for Innoson SUVs

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See highlights

  • Total number of employable people – 2.48 million
  • Fully employed people – 618, 481
  • Unemployed people in the state – 593. 347
  • Underemployed – 656, 394

Imo State is largely a civil service town and has been unlucky with state governors over the last 20 years. Private sector jobs are hard to come by in the serene state with most industries setting up show in nearby cities like Aba, Port Harcourt, and Onitsha.

The city was once notorious for ritual motivated murders and kidnappings but has since overcome these challenges.

READ MORE: Ride-hailing: Uber says industry guidelines are inconsistent, unclear

States Unemployment Rates – Q2 2020

Other States

Akwa Ibom State is next on the list with an unemployment rate of 1.14 million people. The state’s underemployed population is about 551k people while the unemployment and underemployment rates combined is 66.9%.

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The best: The state with the lowest unemployment rate in Nigeria is Anambra State with 13.1% out of the total working population of 2.25 million people. The state was 37 out of 37 states in the ranking of unemployment by state. About 1.9 million people in Anambra State are either fully employed (1.57 million) or under-employed (384k) in the state.

READ ALSO: Ekeh, Zinox boss, intervenes in Imo State with N1 billion

Lagos State, Nigeria’s commercial capital and where most graduates rush to for jobs currently has an unemployment rate of 19.5% and sits at 27 in the state by state unemployment ladder. The data shows about 6.8 million people make up the labour force population in Lagos State out of which 3.99 million people are fully employed and another 1.5 million people are underemployed. About 870k Lagosians who are employable did absolutely nothing.

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Concentration: In terms of the concentration of unemployed people, Rivers State came first with a whopping 1.7 million people out of jobs in the state. The state as a working population of 3.9 million. Rivers State unemployment rate is 43.7 and ranks third as the worst. 21.7 million Nigerians are unemployed.

Lagos State had the most employed persona with about 3.99 million people out of a total of 35.5 million.

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Economy & Politics

Nigeria’s unemployment rate jumps to 27.1% as at 2020 Q2

Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1% meaning about 21.7 million Nigerians remain unemployed.

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unemployment

Nigeria’s unemployment rate as at the second quarter of 2020 is 27.1% indicating that about  21,764,614 (21.7 million) Nigerians remain unemployed.

Nigeria’s unemployment and underemployment rate (28.6%) is a combined 55.7%. This means the total number of Nigerians who are unemployed or underemployed as at 2020 Q2.

This is contained in a recently released unemployment data report published by the National Bureau of Statistics. Nigeria’s unemployment rate was 23.1% in Q3 2018 confirming it increased by 4% points between then and the second quarter of 2020.

READ MORE: Nigeria attracts more Bitcoin interest than any country globally

Key highlights

  • The number of persons in the economically active or working-age population (15 – 64 years of age) during the reference period of the survey, Q2, 2020 was 116,871,186.
  • The number of persons in the labour force (i.e. people within ages 15 -64, who are able and willing to work) was estimated to be 80,291,894. This was 11.3% less than the number persons in Q3, 2018. Of this number, those within the age bracket of 25-34 were highest, with 23,328,460 or 29.1% of the labour force.
  • The total number of people in employment (i.e. people with jobs) during the reference period was dwellers, it rose to 31.5% from 22.8%, while the rate among urban dwellers rose to 23.2% from 58,527,276.
  • Of this number, 35,585,274 were full-time employed (i.e. worked 40+ hours per week), while 22,942,003 were under-employed (i.e. working between 20-29 hours per week). This figure is 15.8% less than the people in employment in Q3, 2020
  • The unemployment rate during the reference period, Q2, 2020 was 27.1%, up from the 23.1% recorded in Q3, 2018. The underemployment rate increased from 20.1% in Q3, 2018 to 28.6%.
  • For the period under review, Q2, 2020, the unemployment rate among young people (15-34years) was 34.9%, up from 29.7%, while the rate of underemployment for the same age group rose to 28.2% from 25.7% in Q3, 2018. These rates were the highest when compared to other age groupings.

The data is coming after nearly two years when the last data was published. The bureau last published jobs data in the third quarter of 2018 citing funding as a major challenge.

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READ MORE: Dangote moves to reduce unemployment rate with investments in agriculture 

Key Take-aways

  • Nigeria’s youth remain the hardest hit by unemployment with over 13.9 million people aged between 15 and 34 years unemployed.
  • The data also shows 7.6 million of this subset did nothing.
  • Women also continue to bear the brunch of bad economy with about 12.2 million out of jobs from the 27 million currently unemployed.
  • Graduates and post graduates combined made up about 2.9 million of the total Nigerians that are unemployed.
  • In a surpising data, out of the 35.5 million Nigerians that are fully employed, 28.8 million of them never attended school (6.29 million) or did not have a tertiary education (22.5).
  • In fact, most fully employed people in Nigeria with SSS (Senior Secondary School certificates) are a whopping 13.2 million.

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