Tag Archives: Nigeria agriculture

Nigeria – presidency says agriculture pulling the county out of recession

Premium Times

Rice Farmers
Photo Credit: Agro Nigeria

Rice Farmers
Photo Credit: Agro Nigeria

The presidential spokesperson, Garba Shehu, says efforts to get the nation out of its present economic challenges are beginning to yield positive results, especially in agriculture.

The presidential aide said this in Abuja on Sunday.

According to him, an increase in the volume of rice production and processing across the country is already saving the country a lot of foreign exchange.

Mr. Shehu, who is the Senior Special Assistant on Media and Publicity to the President, said that Nigeria only imported 58,000 tons of rice from Thailand in 2015 as against 1.2 million tons in 2014.

He revealed that due to the country’s growing rice production occasioned by the Central Bank of Nigeria’s decision to deny foreign exchange for the importation of rice “parboiled rice mills’’ in some Asian countries were shutting down production.

According to him, this is because Nigeria, which is one of the world’s largest importers of rice no longer, buys rice from them.

“Five of such mills in Thailand servicing Nigeria have stopped production due to the withdrawal of our patronage,” he added.

According to him, government is watching with keen interest the growing investment in rice milling by the private sector.

He said government would continue to encourage the Ministry of Agriculture on such efforts through BUA Industries in Jigawa and Dangote in Kano.

He said such encouragement would also be extended to OLAM and WACOTT in Nasarawa and Kebbi as well as a consortium of businessmen led by a former governor in Anambra.

The presidential aide noted with delight that the price of a bag of fertilizer had been reduced from over N9,000 per bag to 5,500.

“This country has about 32 fertilizer blending plants that have remained idle for many years, but that about half of that number is now in production with many of them running three shifts a day.”

He said some of the blending plants have now provided direct employment to hundreds of workers and indirect employment opportunities to thousands of others.

Mr. Shehu said that the Buhari administration’s agricultural revolution was bringing about other socio-economic changes in the country.

He said that a recent survey carried out in two urban areas of Jigawa and Kiyawa showed that jobless young men were migrating from commercial motorcycle business known as, `achaba’, to farming.

“In Kiyawa, it takes a long wait to catch a commercial motor cycle because they are rapidly disappearing.

“The young men are moving to the farms. These are development issues in the country that our media should pay attention,” he added.

The presidential spokesman frowned at the way and manner some elites have continued to attack some government policies and programmes in spite of their positive impact on the ordinary Nigerians.

“Because the elite don’t care for ordinary people, they are saying that government is doing nothing but we are doing a lot for ordinary people.

“They don’t want us to talk about the 14 solar power projects that have been licensed to boost electricity supply in the country; the Mambila power project which will soon leave the drawing board and the many Chinese projects including the standard gauge railway.

“This country has more important things to talk about instead of dwelling on trivialities,” Mr. Shehu said.

Nigeria – Buhari’s agricultural policy and increasing rice production

Premium Times

Bello on his farm, ready for transplant

At eight every morning, hundreds of farmers throng Birni Sala, an upland farming area along Gubin Ka (River Ka), in Jega town of Kebbi State. At about the same time, thousands more head to their farms in other Kebbi communities like Argungu, Bagudo, Augie, Kangiwa, Kalgo, and Yauri.

Although farming has always been a popular profession in Kebbi, it was, until recently, not considered a lucrative vocation, especially among educated folks.

All that changed in 2016.

In late 2015, President Muhammadu Buhari launched the pilot phase of the Anchor Borrowers’ Programme (ABP), spurring thousands to debut as rice growers on at least one hectare of land each. Even for existing farmers, pre-ABP, the programme, despite its downside, helped improve operations.

One of the debutants, Umaru Salihu, is a level nine health worker in the state civil service where he earns about N34,000 monthly. “Month to month,” Mr. Salihu said, “I was suffering. Before the end of the month, I would have finished my salary and be waiting for the next one.”

Encouraged by Umaru Alhassan, the Chairman of Jega Rice Farmers’ Association to enlist for ABP, Mr. Salihu got one hectare of land at Zariyar Kala-Kala in Bagudo to grow rice. Now, he has 10-hectare farmland, five of which he currently cultivates. He started with one hectare in the beginning of 2016 when he became an ABP beneficiary.

“Now, I have confidence. I have hope. I can support my family very well and buy what I want,” he said, but quickly added, “Not that I am very rich; but whether they (government) pay or not, I don’t care. Wetin concern me? I have hope!”

Mr. Salihu’s story is not unique. It offers a window into the experiences of many others who only depended on meagre salaries from poor employment or were unemployed.

“Apart from civil servants, many of our youth involved in thuggery and drug abuse, or those doing petty jobs in Lagos or Abuja, are on the farm now since the (Anchor) Borrowers’ Programme was introduced,” said Mr. Alhassan, speaking at the family compound he shares with a former electoral chief, Attahiru Jega, after the day’s toil.

The ABP?

Days of investigation by PREMIUM TIMES across farms in Kebbi State show that through the ABP, Nigeria, under the leadership of Mr. Buhari is making a silent but fast-paced, revolutionary march towards self-reliance in rice production, the most popular staple food in the country.

In an official statement that followed the launch of the ABP in November 2015, the Central Bank of Nigeria, which coordinates the programme, “set aside N40 billion from the N220 billion Micro, Small and Medium Enterprises Development Fund for farmers at a single-digit interest rate of 9 per cent.”

The ABP mainly targets small-holder subsistence farmers with a view to helping them scale their businesses to commercial level. It also targets millers with the aim of increasing their capacity utilisation.

At the launch, Mr. Buhari disclosed that Nigeria was spending not less than one trillion naira on the importation of food items that could have been produced locally, a situation the CBN said was contributing “greatly to the depletion of the nation’s foreign reserves, especially in the face of low oil revenue resulting from falling oil prices.”

The Central Bank said it had decided to shift from merely concentrating on price, monetary, and financial system stability to acting as a financial catalyst in specific sectors of the economy, particularly agriculture, in an effort to create jobs on a mass scale; improve local food production; and conserve scarce foreign reserves through the ABP.

The implementation of the programme involves the CBN, the Bank of Agriculture, the Nigerian Agricultural Insurance Corporation, state governments, integrated millers and farmers.

THE POLICY

Enrolment in ABP is two-way. Unlike Mr. Salihu who is engaged under the public sector arrangement, Usman Mayaki works with Labana Rice, a Kebbi-based rice mill involved in the programme alongside Humza, another mill in Kano State.

In Kebbi State, there are 73,941 beneficiaries cultivating 77,583 hectares, according to a document the Central Bank released to PREMIUM TIMES.

But in separate interviews, the Kebbi Deputy Governor, Samaila Yombe; the Commissioner of Agriculture, Garba Dadinga, and the permanent secretary of the ministry, Mohammed Lawal, claimed there are 78,000 beneficiaries in the state.

About 70,000 of these were enrolled under the public sector arm of the programme, with the remaining eight thousand in the private sector level –Labana and Humza.

In terms of local government distribution, there are 21 local government areas in Kebbi State, with each having between 3,000 and 6,000 ABP beneficiaries under the public sector arrangement.

Officials and farmers say beneficiaries were offered loans to cultivate one hectare each. With documents from the CBN showing there are more hectares than beneficiaries, it appears some farmers got support for more than one hectare each.

The General Manager of Labana Rice, Abdullahi Zuru, however said no farmer under the private sector arm got assistance for more than one hectare.

By December 2016, the CBN had disbursed N11.7 billion (N11,722,565,400) in the state to both the government and the private sector arms, the bank’s document released to PREMIUM TIMES revealed.

“About N11 billion was disbursed,” the state agriculture commissioner, Mr. Dadinga, said.

For those in the government category, the CBN disbursed the loans through the Bank of Agriculture, and deposit money banks in the case of the private sector, with each beneficiary compulsorily presenting bank verification number.

“The state came in at the point of BVN (registration),” Mr. Dadinga said.

He explained that the state government provided manpower to ensure all beneficiaries went through the registration in all the local government areas.

But the state government played a bigger role than just helping farmers have BVNs.

Apart from helping in the recovery of the loans and supervising the grouping of the beneficiaries into cooperative associations registered under its Ministry of Commerce, the Permanent Secretary, Mr. Lawal, said the state helped verified the farmlands.

This is to ensure the loan was not diverted to other purposes than rice farming, the permanent secretary said. He said the government officials went to each beneficiary’s farm as part of the identification process.

Mr. Lawal’s claim however appears not to have applied in all places.

In Augie, Aliyu Shehe, who heads a group of beneficiaries, said “they (government) didn’t verify any farm; they gave assistance without seeing farms.”

The remark by Mr. Shehe, an elderly seasoned rice farmer, was corroborated by various farmers, including a university lecturer cum farmer, who asked not to be named, but spoke at Masamatu, Argungu; as well as Hafiz Sanusi and Mallam Kashibu at Kwallaga, also in Argungu.

“Yes, they came,” Mr. Salihu, the health worker turned farmer, said, confirming the permanent secretary’s claim for his area. He has his farm in Bagudo.

For the out-growers under the private sector arrangement, the CBN gave money to the millers’ bankers which in turn credited the farmers, having been asked to open accounts with the companies’ bankers.

For both categories, extension workers provided training, farmers and officials said.

To ensure adequate insurance, the NAIC was brought in, the CBN spokesperson, Isaac Okorafor, said.

However, PREMIUM TIMES did not see any evidence of NAIC’s role and Kebbi officials did not mention the insurance agency at all. Rather, farmers who experienced downturn or could not use the loans during last year’s dry season farming have had their tenure extended in order to reinvest and be able to repay.

The state government, in an effort led by the deputy governor, Mr. Yombe, is now helping to rally farmers to pay back the loans to the CBN through the BOA.

“We are recovering about four million naira weekly,” Mr. Yombe said.

ON THE FARMS…COMPLAINTS, ALLEGATIONS

Alhaji Shehe displaying certificate of participation in an ABP training programme
Alhaji Shehe displaying certificate of participation in an ABP training programme

In the beginning, the beneficiaries believed they would get N210,000 to cultivate one hectare each. This was not disputed by officials of the state in separate interviews. Mr. Zuru, the Labana General Manager, and farmers engaged by his company under the private ABP also confirmed this.

While the private farmers got cash and equipment totalling N210,000 each, those in the public arrangement did not and felt short-changed.

Some of the farmers under the government arrangement said they were disappointed by the manner of disbursement and final sum of the loan. They were paid in two batches: N49,000 and then N38,000 in cash, plus pumping machine for irrigation and inputs such as fertilizer, seeds, herbicide and urea. All these total between N156,000 and N160,000 according to a template provided by the government.

Scores of farmers confirmed this to PREMIUM TIMES.

Not just that they got below what they expected, the assistance came after they had started dry season farming last year.

Apart from receiving less than the N210,000 they expected, the university lecturer at Masamatu, like many of the old farmers found the seeds and the pumping machine needless because they had these materials of their own before.

Mr. Alhassan in Jega and Mr. Sanusi in Argungu made that point in separate interviews.

“Nobody is using their seed,” said the university lecturer, backing Mr. Shehe’s point. “We didn’t collect the seeds because we have ours.”

Further, the farmers alleged the list of beneficiaries was padded, with state government officials adding names of friends, family members and political cronies who diverted the loans for other purposes.

“I submitted 1,700 names, but at the end of the day 3,200 were given,” said Mr. Alhassan, who is the chairman of rice farmers in Jega. “They are neither farmers nor intending farmers. We even protested.”

Even Mr. Salihu asked the government to understand there are “paper farmers” and real farmers.

“The allegation of diversion is a crazy assumption,” said Mr. Dadinga, the commissioner. “The CBN did not release any money to the government but to the farmers through the BOA.”

“I have asked anybody to show me one person who benefited but didn’t use the money for the purpose. If money was diverted, there would not have been rice as we now have it and that would have been exposed now that we are recovering the loan.”

The CBN released for each farmer about N156,000-N160,000 through the BOA, he said, adding that the remaining was held by the apex bank.

The CBN, according to its spokesperson, never promised N210,000 in the first place and insisted that the allegation of withholding funds was unfounded. The apex bank said what was given to each farmer was what was provided.

Mr. Dadinga admitted though that the loans did not reach farmers on time. He blamed this on the process of BVN registration, which involved transporting farmers in remote areas to centres across the LGAs where there was network.

“All (of) that hindered the disbursement of fund to farmers,” the official said.

He also explained the government’s decision to buy the equipment for the farmers instead of giving them the total sum in cash.

“Many of them would not buy the inputs or the equipment needed,” said Mr. Dadinga said.

The CBN, BOA, NAIC and the state government hired the suppliers of the input and equipment, he said.

BOOM!

Mr. Salihu hired three hands to work on his Zariyar Kala-Kala, Bagudo farm.

“I give each of the three N15,000 monthly,” he said.

So, despite the constraints, ABP meant an opener of a new lease of life for him and other new farmers, especially those from the no-job-at all background. They became employed directly, and were able to create opportunities for more persons to be engaged.

It is also the same for the older farmers.

So, through ABP, Nigeria may have produced hundreds of thousands of direct and indirect jobs in the rice production value chain.

“Considering the direct beneficiaries, those who bag rice, load bags in trucks, mechanics who repair pumping machines, petrol stations, food sellers, millers who hire new staff etc., more than 700 thousand jobs (were) created along that cycle,” said Mr. Dadinga, corroborating the permanent secretary’s claims.

In an interview with PREMIUM TIMES, Mr. Zuru, the boss of Labana with two plants of combined capacity to process 16 tonnes per hour, said his firm was not reaching 35 per cent capacity utilisation before the ABP, even while sourcing rice paddies from outside Kebbi State.

“Now, we are close to full capacity utilization,” he enthused.

Mr. Zuru further explained that enormous market has been created for millers and merchants to purchase paddies with the increased cultivation of 500,000-hectare Kebbi FADAMA land along River Niger and River Rima.

Almost all farmers interviewed across Kebbi said ABP helped them significantly improve their livelihoods – though they had complaints. None of them was asked to refund the loan at the end of last year’s dry season for which they got the loan originally.

Instead, they have extended the tenure, with recovery just underway. They were able to use the loans for last year’s wet season, since they complained they had already commenced operation for the dry season before the assistance arrived.

Kebbi produced over one million tonnes of rice last year, officials of the CBN and the state said.

However, not all rice farmers in the state are ABP beneficiaries.

With the bumper harvest recorded last year, millers and rice merchants, including those based outside Kebbi, have seen a veritable market in the state. The demand for rice is rising, thus pushing more people to the farm to satisfy the demand.

“I sell to merchants from Zuru,” said Mr. Salihu. “They will call me on phone to ask if I have rice.”

There is no worry about sale, farmers said. They have multiple options: sell to millers, directly to consumers, merchants or the state government which in turn sell to millers.

Mr. Zuru disclosed that Labana Rice doubled the number of its out-growers from 3,500 it had when ABP started. The figure is separate from “more people we have employed directly because we have more rice paddies, and our capacity utilization has significantly improved.”

The rice farmers barely know the hardship being experienced by others around the country as the economy sank into recession. The farmer produces about 100 bags from his one hectare farm. With a bag selling for N10,000-12,000 at the market, he is making over one million naira. The farmers said they spend less than N200,000 within the about five-month cycle of growing rice.

CBN told PREMIUM TIMES the programme has been extended to 16 states after Kebbi.

If the Kebbi success is replicated in other places, it is possible for Nigeria to locally satisfy her rice demand in three or four years; and through that process, conserve foreign exchange and create thousands of jobs.

Importantly, replicating the Kebbi success will also help take millions of poor Nigerians out of poverty, and make thousands of farmers millionaires.

“Come to Kebbi, you will get land to grow rice and become a millionaire quickly,” Mr. Salihu invited PREMIUM TIMES’ reporter as they both exited the farm.

This article is a product of a partnership between PREMIUM TIMES and #Buharimeter to fact-check the viability or otherwise of the federal government’s Anchor Borrowers Programme (ABP).

#Buharimeter is an initiative of the Centre for Democracy and Development (CDD) with support from the Open Society Initiative for West Africa (OSIWA) and the Department for International Department (DFID).

Nigeria – protests in Abuja over food shortages

Vanguard

Nigerians protest food shortage at town hall meeting

ON AUGUST 10, 20167

By Emmanuel Elebeke & Grace Udofia ABUJA— The atmosphere was charged, yesterday, as participants at the special Town Hall meeting organized by Ministry of Information and Culture, in collaboration with the Alumni Association of National Institute for Policy and Strategic Studies, AANI, in Abuja, confronted nine ministers, demanding for quick remedy to the current economic hardship in the country.

President Buhari says We must produce our food locally Some of the aggrieved participants told the ministers that Nigerians were tired of the talkshops and that government should do more to put food on their tables. Speaking at the meeting, Minister of Budget and National Planning, Senator Udoma Udo Udoma, said 2017 Budget would be submitted to the National Assembly by October this year. According to the minister, necessary consultations on preparing the 2017 budget are ongoing. He revealed that government had already released N331.5 billion to date, as part of capital allocation of the 2016 budget, to key ministries covering sectors that will turn around the economy. He said the ministries that received the capital released were power, works and housing, defence and security, water resources, transportation, agriculture and Niger Delta. N100bn ready for capital projects

Presenting his scorecard at the meeting, Minister of Works, Power and Housing, Mr. Babatunde Fashola, told the audience that the present administration had been able to reverse the negative trend of spending the bigger chunk of  its annual budget on recurrent expenditure to capital by increasing the vote from 10-15 per cent to 30 per cent in the 2016 budget. He, however, disclosed that the Federal Government was ready to release additional N100,00 billion for capital expenditure, in addition to the N331 billion earlier released in June. Of the N331 billion, Fashola said his ministry received N102 billion as at  July 29, and had paid N70 billion to contractors, project managers, consultant, who had not received money for about two and half years. He said: “We are paying out, with the understanding that they will begin to bring back all the workers they have laid off. That is the way to go, and out of this recession. We are not doing anything usual, but working with thinner resources to do more.

On power He explained that the administration was trying to complete transmission lines from Gurara, Kashim Mambila plants, and some other NIPP projects across the country to boost power supply. The idea, he said, was to evacuate power immediately after generation, saying progress is being made on other transmission lines. Borrowing In her presentation, Minister of Finance, Mrs. Kemi Adeosun, said the current effort by Federal Government to borrow some funds was justifiable, in the sense that the funds would be channelled into infrastructure development.

Adeosun, who bemoaned the present economic hardship in the country, told the audience that she also inherited 1.2 million civil servants, with over N160 billion total wage bill per month. She described the size of the public sector as a reflection of the failure of the private sector in the country. “We can’t continue that way. That is why we have a very conservative appetite for borrowing,” Adeosun said, adding that there was no quick solution to the present economic challenges. She noted that there was a fundamental problem but assured that government was moving in the right direction. Adopts ranching

On his part, Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said the Federal Government had adopted ranching as the only remedy to the lingering farmers and herdsmen crisis in the country. Ogbeh, who traced the problem to the Structural Adjustment Programme, SAP, of Babangida’s administration of 1986, pointed out that “the situation in Nigeria at present did not start today.” He said: “This recession started long time ago in 1986, when the then federal government introduced structural adjustment programme. Then we threw our doors open for all kinds of importation.” To partner states in mining

Also in his presentation at the meeting, Minister of Solid Minerals, Dr. Kayode Fayemi, stated that there should be synergy among the federal, state and local governments for mining to thrive in the country. He said: “Solid mineral is the backbone of industrialization.  About $3.3 billion of skilled labor in iron ore and steel is imported into the country. This has to stop for the sector to move forward. ‘’We do not want people to come into the sector and export mining products.  If you are in it, you have to set up processing plants to enable us create resources available in that area and send out finished products like cement,’’ Fayemi said. Earlier, the Minister of Information and Culture, Alhaji Lai Mohammed, had said the administration was always willing to engage with Nigerians to explain its policies and programmes, as well as seek the necessary input from them. He lamented that some individuals and groups had made it their pastime to continually castigate the present government over an economic situation which was not its own making.

Read more at: http://www.vanguardngr.com/2016/08/nigerians-protest-food-shortage-town-hall-meeting/

Nigeria – Buhari warns of danger of reliance on food imports

Daily Trust

...Warns on food importation
President Muhammadu Buhari

President Muhammadu Buhari yesterday warned against the continued importation of food to Nigeria, which he said could expose the country  to more “external shocks”.
He noted that the unbridled importation of food contributed to the depletion of  Nigeria’s foreign reserves and  deprived citizens of job opportunities.

Buhari was speaking at the Aso Rock Presidential Villa in Abuja while receiving the new Bulgarian Ambassador to Nigeria,  Mr. Vesselin Blagoer Delcher.
He said his administration would vigorously implement policies that would revive the nation’s agricultural sector and reposition it as the mainstay of the economy.
He assured that the government would evolve and implement policies that would help the country become self-sufficient in food production.
“We must produce what we eat. We don’t have unlimited resources to continue the importation of food items that can be produced locally,” he said.
Buhari also received Mr Paul Lehmann, the new High Commissioner of Australia, Hajiya Afsatu Olayinka Ebiso-Kabba, the new High Commissioner of Sierra-Leone and Thordur Aegir Oskarsson, the new Ambassador of Iceland.
He told them that Nigeria would welcome further strengthening  of relations with their countries, especially in the areas of  agriculture, solid minerals and trade.

Read more at http://www.dailytrust.com.ng/news/general/-warns-on-food-importation/138387.html#k8msEZm9Mej3OZar.99

Nigeria – ten recommendations for Buhati’s first 100 days

Institute of Development Studies/allAfrica

 

Nigeria recently elected an opposition leader as president for the time in its history.

It remains to be seen whether Muhammadu Buhari’s government can deliver on the changes he’s promised, but here’s ten things he could start with:

  1. Sustain, expand and consolidate on the on-going push-back of Boko Haram. This must be top priority.
  2. Carefully constitute a dynamic and inspiring team of political appointees and aides which both retains some of the best appointees from the Jonathan administration as well as bringing in new blood. For instance, many Nigerians consider that the current Minister for Agriculture, Akinwumi Adesina, would be a good one to retain. Giving the age and antecedents of the new President, the composition of his cabinet would provide very strong indications of what lays in store for Nigerians irrespective of his campaign promises.
  3. Scale up humanitarian and development assistance targeted at all Internally Displaced People (IDP) camps across the country.
  4. Make immediate and visible changes to the way government does business. The use of large retinue of aides and vehicle entourages should also be discouraged. This must be done by constitutional executive fiat and Buhari himself, his family and senior members of his team should lead by example.
  5. Reform and strengthen all government institutions and in particular Anti-Corruption Agencies. The independence of the judiciary and all other justice sector institutions must be prioritised to ensure that they adequately and professionally tackle corruption. The ‘War Against Indiscipline’ should be re-introduced. Unlike its previous outing, the new ‘war’ must be first targeted at government officials and particularly law enforcement personnel who interact daily with the general population. Strict sanctions within the rule of law should be enforced throughout the rank and file of government personnel to ensure that all acts of indiscipline and impunity (first of which is corruption) meted against ordinary citizens are curtailed. The ethos of honesty, transparency, accountability and adherence to the rule of law must be restored at all costs.
  6. Deploy constructive and compelling public discourse to manage the extremely high expectations of the majority of Nigerians. This needs to be done through professional associations and the mass media.
  7. Re-jig the 2014 National Budget if necessary, using constitutional means to allow for more realistic projections in light of the current global trends in oil prices.
  8. Re-prioritise government spending to focus attention on the growth of the economy using the abundance of human resources (skilled and unskilled) available to the country.
  9. Human capital development in education and health must be innovative and decisive. Attention must be paid to the polar ends of the country (North-East and South-South) where income inequalities and related vulnerabilities are highest.
  10. Engage political actors as well as the general population in the discourse about the best political solution to the power-sharing issue. All acceptable recommendations of the last political conference should be rolled out in the public discourse to allow Nigerians come to terms with them well ahead of the 2019 elections.

Maureen Lance-Onyeiwu is IDS Alumni Ambassador for Nigeria, and took our MA in Poverty and Development in 2008. Currently, she is working as the National Coordination Officer with the United Nations Office on Drugs and Crime in Nigeria.

Nigeria’s economic transition reveals deep structural problems

African Arguments
Nigeria’s economic transition reveals deep structural distortions – By Zainab Usman

According to recently reviewed GDP figures, Nigeria is now Africa’s biggest economy. It was about time a more accurate measure of economic output, which captures Nigerians’ entrepreneurial zeal, was adopted. The headline-capturing highlights of the new series reveal the scale of the economy, and greater economic diversification with the rapid growth of non-oil sectors. Significantly, the figures indicate how this growth accounts for the “jobless” economic expansion, the slow pace of industrial development and the regional dimensions of the economic boom.

According to the rebased figures, six sectors now account for 70% of nominal GDP rather than three in the old series. The service sector grew fastest, by 240%, and is progressively constituting a larger portion of the GDP. Conversely, the share of the two hitherto giants – agriculture and oil has fallen to 21% and 14.4% respectively. Nigeria is transiting to a services-driven economy due to the rapid growth of information and communications technology (ICT), banking, trade and the informal economy.

Zenith Bank, UBA and Guaranty Trust Bank are Nigerian financial institutions with a huge presence across the continent. Mobile phone subscription has exploded from just 2.2 million lines in 2002 to over 169 million by 2013. Call credit vendors, petty traders and other unofficial activities in the informal economy have also been included in the new series, as a component of the services sector.

On the surface, the emergence of the service sector as a major growth driver indicates a greater diversification of the country’s production structure away from oil (a long sought after goal). The share of the oil and gas sector has fallen from 32.4% of GDP in the old series to just 14.4% in the new series. On one hand this is good news, on the other hand, it reveals deeper structural distortions. Nigeria appears to be leap-frogging from an extractive to a services-oriented economy without commensurate industrial development, and this comes with some baggage. This slow pace of industrialisation accounts for the non-inclusive nature of growth and widening inequality in the country.

The necessity to experience industrialisation as a phase in the economic development process from a poor to a rich society is well documented. The Economist and Foreign Policy magazines both recently hosted debates on the necessity of industrialisation for sub-Saharan African economies. Economist Ha-Joon Chang points out categorically that “…it is a fantasy to think that developing countries can skip industrialisation and build prosperity on the basis of service industries”.

Multilateral organisations such as the United Nations Industrial Development Organisation (UNIDO), the United Nations Economic Commission for Africa (UNECA) and the African Union are advocating for inclusive and sustainable industrial development as the key to structural economic transformation of African economies. This is hinged on the export-oriented-industrialisation (EOI) route taken by South Korea, Singapore and other East Asian Tigers to economic development and prosperity.

Industrialisation is regarded as the surest route to poverty reduction and economic transformation. With the labour intensive nature of manufacturing industry, the share of people engaged in subsistence agriculture falls as those engaged in agro-processing, light and heavy manufacturing and ancillary services rises. Economists argue that industrial development creates employment along a value chain, raises incomes, and improves human development. As Dani Rodrik emphasises, the manufacturing sector is where the world’s middle classes take shape and grow; without a vibrant manufacturing base, societies tend to be more unequal.

In Nigeria, as the new GDP series reveals, this industrialisation process is yet to take root. The manufacturing sector, which was 10% of GDP in 1980, constitutes only 6.9% in the revised figures. By contrast, the over 200-fold growth in ICT, trade and financial services means that the service sector now constitutes 52.3% of economic output. Unlike the manufacturing sector, which employs low-skilled, low-wage labour, these services are highly capital and technology intensive.

Entry-level staff in banks in the country require a minimum of a tertiary qualification. While the mobile tech start-up revolution sweeping across the commercial capital Lagos, is dominated by tech-savvy entrepreneurs with a highly specialised skill set. Therefore, the mobile revolution hasn’t led to an explosion of job opportunities, as youth unemployment persists at 54%. A stark reminder of the unemployment situation is the recent recruitment exercise of the immigration service, in which 6.5 million Nigerians applied for 4,000 jobs and where 19 people were crushed to death at stampedes at the recruitment centres.

At the other end of the scale, the telecoms sector is creating a booming informal economy of call credit vendors, informal call centres and other microenterprises with limited scope for upward mobility.

Though the GDP series involve macro-level aggregate data, some inferences about regional distribution of economic activity can be made. While agricultural output has increased, it has grown much more slowly than the capital, technology and skills intensive services sector. Agriculture’s decline as a share of GDP has more implications in the northern states, where it dominates.

Critically, the diminishing share of agriculture as a percentage of GDP, which should indicate economic development in an industrialising economy, is not the case here. Hundreds of textile, food and beverage and other light manufacturing industries lie moribund in industrial hubs in Kaduna and Kano states. Electricity shortages, infrastructural decay and influx of cheap Chinese imports and smuggled consumer goods are some of the factors attributed to the acceleration of de-industrialisation in the North. Tellingly, farmers are not leaving their farmlands in villages to become factory workers in modern industries, but are urbanising in the fringes and becoming an underclass in the vast unofficial activities in the informal sector.

Although some states like Kano have a vibrant trade-based economy (and the ‘Kannywood’ local entertainment sector is booming), economic output in the northern states is mostly agrarian. On the other hand, the services sector – banks, telecoms, hospitality, trade – are mostly concentrated in the South. Of the 21 commercial banks in the country, only one is owned by and headquartered in the North.

Even in the South, Lagos and to a lesser extent, the four major oil-producing states, account for the bulk of economic output. Lagos, where most banks, financial institutions, telecoms firms, oil companies and other private sector organisations are headquartered could be Africa’s fifth largest economy, if it were a separate country. As an outlier, it is the only self-sufficient state out of 35 others, able to generate over 50% of its revenues from internal sources more than its monthly allocations from the centre.

Conclusions about the regional dimension of economic growth can only be made with certainty when the state-level GDP figures are released by the Nigerian Bureau of Statistics (NBS). Yet we can deduce from the new series as to why Nigeria’s economic boom is not only non-inclusive, but geographically concentrated, in which many northern states lag behind.

As expected, these figures are being politicised by both the government – which has adopted a triumphalist attitude and implicitly claims credit – and sceptical Nigerians, who are worried about the ‘jobless growth’ and poor human development situation. Both sides miss the point about the purpose of the rebasing exercise, which is mainly to provide a more accurate picture of the economy. Thankfully, the NBS has dispassionately emphasised that “the rebasing exercise does not in itself reflect the effectiveness or otherwise of public policy”.

The onus now lies on policy makers to address these structural economic problems head on, not merely to politicise them. The government has recently launched an industrial policy, an Agricultural Transformation Agenda, and has privatised the power sector. With Nigeria’s staggering size, its booming population and its equally staggering problems, there is certainly scope for doing much more.

Zainab Usman is a DPhil Candidate at the University of Oxford.

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Nigerian Agriculture MInister says agriculture now way out of poverty and conflict

If you believe this guy, you’ll believe anything. There aren’t going to be large numbers of Nigerian millionaires coming from among ordinary farmers and that shouldn’t be the point of developing agriculture – it should be about relieving poverty, malnutrition and improving food security. KS

 

allAfrica

Nigeria: Dismissed as Poverty Trap, Agriculture Is Nigeria’s ‘New Oil’ and Can Curb Conflict – Minister Adesina

Photo: Tami Hultman / AllAfrica

Nigerian Minister of Agriculture Akin Adesina.

Abuja — Dr. Akin Adesina, Minister of Agriculture for the Republic of Nigeria, is an agricultural economist with decades of experience working to make agriculture productive and profitable. His appointment three years ago was hailed as merit driven rather than political, especially by international agriculture and development specialists. But that didn’t protect his ambitious reform programme from initial widespread skepticism and critical media scrutiny at home.

AllAfrica’s Reed Kramer sat down with Minister Adesina on a Saturday morning in Abuja, Nigeria’s capital, when he squeezed time from a packed schedule for a lengthy interview. From his early days in the job, he framed the goal of his wide-ranging initiatives around the idea of “inclusive growth” – which is the theme of the World Economic Forum’s annual Africa meeting in Abuja this month. The minister hails agriculture as Nigeria’s path to prosperity – in contrast to oil, which left most Nigerians in wretched poverty while social services crumbled and hunger mounted. And at a time when the country’s domestic peace seems increasingly fragile, he sees agriculture as a tool to curb conflict.

Last year AllAfrica asked a class of Nigerian school children if they wanted to be farmers, and they said, “No, because we don’t want to be poor!” On the other hand, oil has earned $50 billion or more a year and made a Nigerian elite fabulously wealthy. But you’ve said that agriculture is the new oil. Really?

Agriculture as Nigeria’s new oil? Yes! I believe that the future millionaires and billionaires of Nigeria will come out of agriculture. Listen, if the business of food doesn’t pay, why are we spending all that money importing food? It pays! You can choose not to ride a car, you can go inside of a train – but you can’t choose not to eat. Nobody eats GDP. People eat food.

Don’t get me wrong; growth isimportant. We need a lot of economic growth, GDP growth. We’ve got to make sure that we have inclusive growth that carries millions of people out of poverty, and the way to have that is through an agricultural transformation that reaches the tens of millions of people at the bottom.

Agriculture has the power to create jobs where it matters, in the rural areas. If you have almost 70% of our population living in rural areas, the main source of livelihood for them is agriculture. That is why as a government we took a position that we must make agriculture work. We must make it a money-making enterprise for farmers, for small businesses, because it creates jobs massively at the bottom. Even a 1% increase in productivity of agriculture will give you more than four times reduction in poverty.

RELATED: Akinwumi Adesina Awarded Forbes ‘Africa Person of the Year’

What we’re doing now is to make sure that we can produce enough food for ourselves; process our foods locally into what’s accepted by our consumers and that can compete with imports. Our population, 167 million people, should be eating a lot of what we are producing. That way we create jobs for ourselves, we will revive our rural economies and we create a future of hope and shared prosperity for millions of our youth in this country – and assure our national security.

With an agenda that large, where do you start?

We started the GES – Growth Enhancement Strategy – as a way of ending forty years of corruption in the seed and fertilizer sector. The GES program is run in every single local government across the entire country. Since last year, eight million farmers collected seeds and fertilizers by the GES system, and that has allowed us to improve the food security of 40 million persons within farm households.

Phones for farmers

We reach our farmers directly by mobile phones to give allocations for seed and fertilizer subsidies. Last year [when the distribution of low-cost mobile phones to farmers began], people are asking me a lot of hot questions. “Are mobile phones what farmers need in Nigeria?” They said mobile phones would not do anything.

Well, they were wrong. In the modern age, the most powerful tool in the hand of a farmer is not a tractor – it is the mobile phone, because that phone allows farmers to check market-price information; it allows them to know about weather information; it allows them to get extension service; it allows them to get access to finance; it allows them to get access to micro-insurance; it allows them to get access to their farm inputs, as we have shown by the electronic wallets in Nigeria – an electronic wallet system that delivers vouchers for subsidized inputs to farmers. We know how much they are they getting, how much are they paying and how much our government is paying. With this ICT technology, we have made it into a transparent system. We have empowered farmers. We have cut out the corrupt middlemen from the system.

We have also given dignity back to our farmers. They don’t beg anybody today to get seeds and fertilizers – and they shouldn’t. The mobile phone is everything for the farmers of Nigeria today.

Nigeria is estimated to have 125 million cell phones, reaching 75 percent of the population. But they don’t reach everywhere, do they? And where they don’t reach may be where they’re most needed – by the poorest, most rural farmers.

Despite all the successes we are having with it, one of these infrastructural challenges is the penetration of mobile phones in rural areas. There are a number of our rural areas where you don’t have good mobile phone penetration- but also you don’t even have stability of a connection enough for you to make a transaction. So we started looking for new technologies, trying to innovate – asking how we can get around this problem.

ICT innovation beyond the network

We spoke to the UK government, and they got a company out of UK [Consult Hyperion] which had helped Kenya with its M-Pesa [electronic wallet] system. That company developed for us what is called a near field communication system [which enables phones in close proximity to have radio communication with each other].

SEE: GES Tap Targets 500,000 Farmers in FCT, Sokoto State

This allows our farmers to redeem their inputs in areas where there are no networks, simply by using Android phones as smart cards. So a farmer will get a smart card (when registering for subsidies); they will go to the input retailer that has an Android phone; the smart card has all the allocations for the farmer. They tap it, it’s got TAP technology – just tap it on the phone and all the allocation shows up and the farmers redeem their seeds and fertilizer without any network. It’s revolutionary. We are the first in the world to do it.

We are rolling it out this year. We are testing it now in parts of the country.

We have also upgraded our system to manage identity of farmers. We have registered 10.5 million farmers. We have moved their biometric information to a national identity management system platform.

So our farmers now will get not only a national identity card; they will also get a farmer card that has all their information on it. What that means is that we will be able to manage identity better. We will be able to reduce a chance that somebody will want to commit fraud in the system, because it’s going to be national. And it’s also going to help us with financial inclusion for farmers. Farmers that were not known by banks before, all of a sudden, they have all their identity information.

Another thing we are doing is for the input retailers, the agro-dealers in rural areas, where farmers will be able to save to buy inputs – because after harvest is when they have money, but that’s when they also spend all the money. So we are developing a point-of-sale system where the farmers get a card just like your credit card. They would save onto a mobile account. They can go to an input retailer later in the season and buy fertilizers and seed, based on the money they have saved.

So we are dealing with three issues: one, making it easier for farmers to save and buy inputs commercially; developing a modern system that allows them to access government subsidized inputs directly by our phones, which is working at scale, and the third is to have a system of identity management so that our farmers can have financial inclusion.

So you can see we continue to innovate. We have to continue to push the envelope, and we will.

One of your early frustrations was an inability to persuade banks to finance farmers – a huge impediment to your plans, you said. Has that really changed, even if farmers now have more identity documents?

Three years ago I had a hard time getting any banker to want to touch agriculture. They were all falling away from you because they didn’t see that as a viable sector. When we started, close to zero percent of bank lending in this country went to the agriculture sector – to be precise 0.7%. That was it – to a sector that accounted for 44% of the GDP and 70% of all employment!

You couldn’t blame the banks, because agriculture was run largely as a development activity rather than a business. Any sensible banker will not put money into it because banks are not charitable; banks are businesses. So if the business proposition is not viable, they won’t put money there.

Well in three years the share of total bank lending going to agriculture went up from 0.7% to 5%. This year we expect it will grow it to 7.5% and next year to 10%. In 2012 when I asked the banks to start lending to agro dealers in the country, they were very reluctant, but they managed to lend $25 million to them. Last year the banks lent to the same agro dealers and seed companies $125 million. This year they are going to lend to them $250 million.

The question is: how much money are they losing? What has happened to default rate? Myself and the Central Bank Governor called bank CEOs together, and we asked them: “How much money have you lost from lending to these agro dealers and seed companies?” Unanimously, they said zero percent!

And so you see that not only is agriculture viable, agriculture today – according to the bankers – has the lowest non-performing loans in the country, because we are rapidly fixing the sector, modernizing the sector. The farmers are paying back their loans, the agribusinesses are paying back their loans, the seed companies are paying back their loans and agro dealers are paying back their loans. I think that’s what you get when you move a sector from disorder into order.

Private businesses come on board

What is very exciting for me is the response of the private sector. Take the seed agribusiness sector for example. When we started, almost three years ago, we had about five seed companies in the country. Today we have 80 seed companies. Three years ago, the volume of seed – improved seed – that was produced and commercialized for use by farmers in the country was only 5,000 metric tons. By last year that went up 10 times – to 50,000 metric tons of seed. This year we expect to reach 78,000 metric tons of seed. The reason is that seed companies now can sell their seed directly to farmers instead of selling to government.

Another thing we are doing is for the input retailers, the agro-dealers in rural areas, where farmers will be able to save to buy inputs – because after harvest is when they have money, but that’s when they also spend all the money. So we are developing a point-of-sale system where the farmers get a card just like your credit card. They would save onto a mobile account. They can go to an input retailer later in the season and buy fertilizers and seed, based on the money they have saved.

So we are dealing with three issues: one, making it easier for farmers to save and buy inputs commercially; developing a modern system that allows them to access government subsidized inputs directly by our phones, which is working at scale, and the third is to have a system of identity management so that our farmers can have financial inclusion.

So you can see we continue to innovate. We have to continue to push the envelope, and we will.

One of your early frustrations was an inability to persuade banks to finance farmers – a huge impediment to your plans, you said. Has that really changed, even if farmers now have more identity documents?

Three years ago I had a hard time getting any banker to want to touch agriculture. They were all falling away from you because they didn’t see that as a viable sector. When we started, close to zero percent of bank lending in this country went to the agriculture sector – to be precise 0.7%. That was it – to a sector that accounted for 44% of the GDP and 70% of all employment!

You couldn’t blame the banks, because agriculture was run largely as a development activity rather than a business. Any sensible banker will not put money into it because banks are not charitable; banks are businesses. So if the business proposition is not viable, they won’t put money there.

Well in three years the share of total bank lending going to agriculture went up from 0.7% to 5%. This year we expect it will grow it to 7.5% and next year to 10%. In 2012 when I asked the banks to start lending to agro dealers in the country, they were very reluctant, but they managed to lend $25 million to them. Last year the banks lent to the same agro dealers and seed companies $125 million. This year they are going to lend to them $250 million.

The question is: how much money are they losing? What has happened to default rate? Myself and the Central Bank Governor called bank CEOs together, and we asked them: “How much money have you lost from lending to these agro dealers and seed companies?” Unanimously, they said zero percent!

And so you see that not only is agriculture viable, agriculture today – according to the bankers – has the lowest non-performing loans in the country, because we are rapidly fixing the sector, modernizing the sector. The farmers are paying back their loans, the agribusinesses are paying back their loans, the seed companies are paying back their loans and agro dealers are paying back their loans. I think that’s what you get when you move a sector from disorder into order.

Private businesses come on board

What is very exciting for me is the response of the private sector. Take the seed agribusiness sector for example. When we started, almost three years ago, we had about five seed companies in the country. Today we have 80 seed companies. Three years ago, the volume of seed – improved seed – that was produced and commercialized for use by farmers in the country was only 5,000 metric tons. By last year that went up 10 times – to 50,000 metric tons of seed. This year we expect to reach 78,000 metric tons of seed. The reason is that seed companies now can sell their seed directly to farmers instead of selling to government. Read more….