Photo: Smiling Farmer from worldisround.com
1. "We have to go out and get investments and get that money into the country." - Olusegun Aganga, explaining the focus of the Ministry of Trade and Investments. Source: Daily Trust
2. Ndidi Nwuneli, a successful serial NGO founder, has turned her focus to Agriculture. She writes for Business Day every Tuesday on Agriculture, including Eating Beyond Our Means last week, and Transforming Our Farmers into Entrepreneurs on July 13th.
3. EFInA, a Nigerian NGO funded largely by the Bill and Melinda Gates Foundation, religiously tracks Access to Banking/Capital/Finance. As most Nigerians remain outside the formal banking sector, and too many are unbanked (formally or informally), EFInA funds ideas that increase financial innovation and access - e.g. through its s-weet Innovation Fund
By the way, here is the EFInA report on the Financial Services Landscape in Nigeria (2010).
4. (Source: Business Day - CBN and small enterprise funding)
The Central bank has earmarked funds for grassroots lending/investment, which include since 2009:
- N200 billion Commercial Agriculture Credit Scheme (CASS) Fund being channeled to farmers: through state governments to farmers’ cooperatives and unions within their constituencies, and also through private promoters/projects.
- N200 billion guarantee scheme for new loans to SMEs to be provided at bank’s prime lending rate
- N500 billion manufacturing and infrastructure (power and airline) intervention fund
- CBN also set up Entrepreneurship Development Centers, EDCs, to train citizens in locations around the country (see ALF-EDC); as well as a Nigerian Incentive-based risk Sharing System for Agricultural Lending (NIRSAL), to reduce banks’ perception of agriculture as ‘highly risky’ and consequently expand bank lending to the agricultural sector from the current 2% to at least 10% within the next five years.
2 comments:
I love success stories, and Nigerian agriculture is becoming a success story.
Source, BusinessDay February 13, 2012
A new funding strategy being operated by the Federal Ministry of Agriculture and Rural Development (FMARD), has freed the ministry from the traditional poor budgetary allocation to the sector, ...
This ingenuity is a spin-off from the ministry’s ongoing transformation agenda which is aimed at a robust repositioning of the neglected Nigerian agriculture sector.
The new strategy ties budgetary allocation to agric production and does not depend on budgetary provision to the agric sector alone.
Under the new dispensation, according to Akinwunmi Adesina minister for Agriculture and Rural Development, the departments under the ministry [are] no longer compartmentalised, a system by which “they work in silos.
“All that has changed in our new budgetary system. There is now a linkage between allocation and production.”
Said he: “If you look at our budget this year, it is linked across the entire value chain This is very transparent. You can link every line of our expenditure to what it will do. That is a value chain result-oriented budget.”
This strategic push by the minister, will likely see annual spending on the entire agriculture value chain go up, to match spending by smaller countries like Kenya, Chad, Ethiopia and Malawi who allocate up to 12 per cent of their national budgets to agriculture. Nigeria spends just three per cent of its national budget on agriculture.
The minister, who spoke to BusinessDay in an exclusive interview in Lagos, is not deterred by low budgetary allocation because, for him, what is important in not the money but the value you create with the money. Said he: “People always ask about money; I think what is important is not just the money in hand but how you spend the money - the value for the money.”
Continued...
Agriculture successes continued
The minister’s line of thinking is perhaps responsible for the revolution that has taken place in the fertiliser procurement and distribution process, which hitherto has been engulfed in corruption. The minister has taken government out of fertiliser procurement and distribution. All fertiliser in Nigeria now have to be sold directly to the farmer.
It would be recalled that the ministries of finance and agriculture, last November, signed N30 billion worth of Memorandum of Understanding (MoU) with commercial banks in the country, for the supply of fertiliser and seeds to farmers for the 2012 farming season. Government is not spending this money. All it is doing is guaranteeing it.
Said Adesina, “The role of government has shifted to providing the support to buying seed and fertiliser. Only 11 per cent of farmers in this country get government supplied fertiliser. It is one of the most corrupt sectors. What you find is that expenditure on fertiliser is rising and yet rural poverty also is rising at the same time.”
The agric ministry has introduced an E-wallet system for the distribution of fertiliser. With the E-Wallet system, an accredited farmer receives an allocation of fertiliser through a pin sent to his phone, which he would take to the bank and pay for his allocation at a subsidised rate. After the payment, the farmer would be given a voucher which he would then use to collect his allocation from an accredited agro distributor.
The new private sector led policy driving fertiliser has led to almost $6.8 billion of expected investment into the Fertiliser sector, as announced by companies as diverse as the Dangote Group, Indorama, Notore and the Nigerian National Petroleum Corporation (NNPC) in partnership with Xenel and Nagarjuna of India.
The funds will go into building new fertiliser plants and petrochemical complexes (all expected to be completed by 2016), as well as to increase the existing fertiliser capacity, which will boost agricultural production in the country and tremendously increase the yields of farmers.
Analysts’ forecasts total urea capacity in 2016 to average 6.05 million tons per annum, or six times the level in 2011, making Nigeria not only self- sufficient but also a net exporter of fertiliser.
Again, the goal of attracting private investors to the agriculture sector is moving ahead with a $40 million investment by a group of foreign investors in rice production and processing in Taraba state. According to Adesina, a total of 30,000 hectares of land is being made available to the investors in the first instance, and a lot more will be made available if required.
The lead investor, Dutch- based conglomerate, Dutchco, disclosed that his company has plans for the construction of an air strip to service the area, as well as the construction of a modern rice processing mill. The processing plant has the capacity of processing 40 metric tons of rice per day.
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