Agricultural Reforms In Nigeria

Q: Why is agriculture reform so important?

A: Agriculture is the best weapon to tackle the insurgence of poverty in the world and to achieve the Millennium Development Goals (MDGs) by 2015. Every developed country in the world has advanced its economy on the back of its agriculture sector.
Like most African countries, agriculture contributes about 40 per cent of Nigeria’s gross domestic product and employs more than 70 per cent of our people so ensuring the strength and productivity of this sector is critical to Nigeria’s long-term economic development.

While sustainable agriculture can be a key driver of economic growth in Nigeria, farmers face too many constraints right now to raise productivity or to make farming profitable. Policy reforms are mandatory to create a more enabling environment in which farmers can prosper and make a living. This is why Nigeria has embarked on its Agricultural Transformation Agenda.

Q: What specific impact would planned improvements in agriculture have on Nigeria’s economic outlook?

A: Nigeria’s Agricultural Transformation Agenda has very specific targets. By 2015, we aim to:
• Add 20 million metric tons of food to the domestic supply
• Create 3.5 million new jobs
• Be self-sufficient in rice by 2015

Q: What progress has been made on food production since reforms began?

A: In the first year alone, Nigeria’s farmers produced eight million metric tons of food, 70% higher than the target set for 2012 and almost half of the production target set for 2015. Agricultural Transformation Agenda initiatives have also already stimulated the creation of two million jobs all across rural areas. This represents over three quarters of the overall job creation target.

We also set out to replace the two million metric tons of milled rice imported annually and total paddy production for just the 2012/2013 season has accounted for three quarters of that target.

Wheat imports declined from an all-time high of 4,051,000 MT in 2010 to 3,700,000 MT in 2012 thanks to the government’s cassava transformation agenda; goal is to replace up to 40% of the imported wheat with high quality cassava flour.

Q: Doesn’t Nigerian infrastructure need to improve before agricultural progress can be taken to scale?

A: Good infrastructure is essential for a productive agricultural sector and that is why the government has identified 14 high production food areas called Stable Crop Processing Zones in which to create superior investment climates for the private sector. Concentrating on higher value crops and regions with existing markets, Nigeria will create agribusiness opportunities for the private sector through infrastructure upgrades, incentives and favourable regulatory environments.

Q: Many people say there remains large-scale corruption and patronage in the agricultural sector. Is this true?

A: This was something Nigeria’s Minister of Agriculture and Rural Development the Honourable Akin Adesina addressed on his first day in office. Within 90 days of his appointment, the minister ended four decades of corruption in the fertilizer business. Government was taken out of the procurement and distribution of both fertilizers and seeds. The system where government monopolized the supply of foundation seed was also scrapped. Today, all foundation seed supply – the lifeline of a viable seed industry – is now fully liberalized and handed over to the private sector.

Because of these reforms, subsidized inputs went directly to farmers through vouchers on their mobile phones – an Electronic or E-wallet system. These electronic vouchers are used just like cash to buy seeds and fertilizers directly from agro-dealers. Nigeria is the first country in Africa to launch an electronic wallet system for the delivery of subsidised inputs to farmers. Last year, over one million farmers received their subsidized seeds and fertilizers through their mobile phones. The target is to reach five million farmers in 2013.

Q: What is the Nigerian government’s role in promoting investment in its agricultural sector?

A: Governments must create enabling environments by working with the private sector to develop programmes and services that reduce both the perceived and real risk associated with agricultural lending. Nigeria is complementing its agricultural revolution with a financial revolution, expanding farmers’ access to financial services so they can build productive assets, diversify income sources and enhance their resilience.
The Central Bank of Nigeria established a $350 million risk sharing facility (NIRSAL) to reduce the risk of lending by banks to farmers and agribusinesses. The facility will leverage $3.5 billion of lending from banks to agriculture. It will also reduce interest rates paid by farmers from 18 per cent to eight per cent. In 2013, NIRSAL will share risks with banks to lend $ 400 million to the private sector seed and fertilizer companies and agrodealers. This will make agricultural inputs available to five million smallholder farmers across the country in 2013.

Q. How successful has the government been in attracting private sector investment?

A: Since the launch of the Agricultural Transformation Agenda, this administration has been able to secure over $8 billion from the private sector for existing and planned investments in Nigeria’s agriculture, agribusiness and food industry. This is because of a government-enabled, private sector-driven transformation agenda that ensures that agriculture is being treated as a straight-line business, and not a development project. The government recognizes that there are financial returns to be made in the sector, while also ensuring job creation and economic sustainability.

Q: What are you doing to help the smallholder farmer?

A: Smallholder farmers are vital to Nigeria’s agricultural success as they currently produce most of our food. The reason they have not been profitable is because government has not given them the support they need to thrive.
The starting point was to drive an increase in productivity. This meant we had to make sure smallholder farmers had access to affordable agricultural inputs. We started radically reforming our fertilizer and seed policies. We ended four decades of corruption by taking the government out of the procurement and distribution of fertilizers and seeds.

We also launched the first ever database of farmers in the country so we can know our farmers and can better target policies to support them. Last year, biometric information on four million farmers was captured and each farmer now has a unique farmer identification card. This year, we are expanding the database to include 10 million farmers.

Q: What is the outlook for the agricultural sector in Nigeria?

A: Nigeria has great potential with sixty percent of its arable land still uncultivated, untapped irrigation potential with three of eight major river systems in Africa, a large labour force, growing and large domestic market and most importantly the political will to make necessary policy reforms.

Now, we will have the right business conditions and government resources to significantly expand agricultural production and be a major contributor to global food security and poverty eradication.