WEF_GrowAfrica_AnnualReport2014

2013 in Review
2013 in Review
2.8
Country
Report
2013 IN REVIEW
Nigeria
PROGRESS
Major agri-investment flows accelerated
by catalytic government action
Making agriculture a business
opportunity for all
With 167 million people, Nigeria is Africa’s most
populous nation and the 7th largest country in the
world. Endowed with the biggest gas reserves on the
continent and the 2nd most significant oil reserves,
the country recently surpassed South Africa as the
continent’s largest economy. Nigeria also has huge
potential agricultural assets, with 84 million ha of
arable land, a youth labour force projected to reach
110 million by 2020, and 279 billion cubic metres of
available water from three of Africa’s 8 greatest rivers.
Yet despite these attributes, Nigeria has been an equally
outsized spender on food imports, with a bill totalling
$11 billion at the end of 2011. Hence in 2012, the
country embarked upon a wide-ranging Agricultural
Transformation Agenda (ATA) to harness its agricultural
potential and reduce the nation’s food import spend,
while creating jobs and expanding value-addition to
locally-produced agricultural products. The overall
goals of the ATA are to add 20 million tonnes to annual
domestic food supply and create a total of 3.5 million
jobs by 2015. This represents the biggest effort by
government to grow agriculture in the country’s history,
builds on the foundation established through the CAADP
process, and provides a clear blueprint for action.
Through radical policy reforms, a reduced role for
government, and expanded incentives for the private
sector, the initiative is creating an enabling environment
for private-sector investment that will modernise and
industrialise Nigeria’s agriculture. With support from all
levels of government, Nigeria’s ATA agenda has begun to:
•¡
shift the lens through which agriculture is viewed,
moving away from treating agriculture as a
development activity to a government-enabled,
private sector-led priority;
•¡
concentrate investments in infrastructure to unlock
economies of scale for food processing and valueadded
activities in areas known as Staple Crop
Processing Zones (SCPZs);
•¡
strengthen the policy and investment climate to
attract private-sector investment and improve
competitiveness; and
•¡
transform the financial landscape through innovative
financing approaches to stimulate development in
the sector across the value chain.
Heeding the nation’s call to action, development
partners have committed over $2 billion to further the
aims of the ATA. These include: the World Bank, the
African Development Bank Group, the international
development agencies of the UK (DFID) and the
US (USAID), UN agencies of the International Fund
for Agricultural Development (IFAD), the World
Food Programme (WFP) and the United Nations
Development Programme (UNDP), and the Bill and
Melinda Gates Foundation. Significantly, domestic
Foundations such as The Tony Elumelu Foundation
have also come on board in support of the ATA.
2013 was a remarkable year for investment in Nigerian
agriculture. After receiving a number of verbal
investment commitments from the private sector in
2012, the Federal Ministry of Agriculture and Rural
Development (FMARD) received formal Letters of
Intent (LoIs) from 18 domestic and 11 international
companies committing to invest nearly $4 billion in
the agriculture sector. During 2013, over half a billion
dollars of this was already reported as invested,
primarily by subsidiaries of Nigeria Flour Mills that have
constructed major new processing facilities for a range
of commodities.
Underlying this positive investment story is strong
leadership on sector transformation from the
government, as, over the course of 2013, it developed
and executed many initiatives linked to the ATA. These
are changing the structure, capacity and focus of
Nigerian agriculture and agribusiness. Progress made
over the year includes:
A new investment fund and increased
access to finance
During 2013, two government funding initiatives really
began to take root and yield results. The Fund for
Agriculture Financing in Nigeria (FAFIN) was launched
with a target of $100 million and an initial capitalisation
of $33 million through finance from the Nigerian
Sovereign Investment Authority and the German
government fund KfW, with 10% allocated for technical
assistance.
The Nigeria Incentive-based Risk Sharing System
for Agricultural Lending (NIRSAL) saw lending from
Nigerian banks to the agriculture sector rise from 0.7%
in 2010 to 5% of aggregate lending portfolios in 2013.
Bank lending grew from $21 million in 2012 to $120
million in 2013, with expectations of $240 million in
2014.
Input dissemination facilitation
The Nigeria Growth Enhancement Support (GES)
scheme and its lauded “e-Wallet” system continued
to grow from strength to strength in 2013 (see
spotlight in this chapter). Less than two years into the
programme, 10.5 million farmers are registered on the
database, and over 6.5 million have been served. The
government reports that 750,000 tonnes of fertiliser
and 55,000 tonnes of improved seeds were delivered
to smallholders with less than 3 ha of land, resulting in
the production of 15.5 million tonnes of food.
To reach additional farmers and improve reconciliation
capacity, a point-of-sale system and a Touch and Pay
(TAP) system using Android tablet technology were
also introduced to farmers and to the growing network
of agro-dealers supporting the programme. Domestic
seed companies were buoyed by the scheme, with
their number increasing fivefold to rise from 15 in 2011
to 80 at the end of 2013. Production of improved seed
likewise rocketed from 5,000 tonnes in 2011 to 50,000
tonnes in 2013.
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Nigeria
Nigeria
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