Agricultural Transformation Agenda:
Repositioning agriculture to drive Nigeria’s economy
Dr. Akinwumi Adesina, PhD (Purdue, USA) CON
Honourable Minister of Agriculture and Rural
Development
November 2012
Federal Ministry of Agriculture and Rural Development
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Nigeria Imports over 1.3 Trillion Naira in wheat, rice, sugar and fish every year
Key takeaways
Nigeria’s imports
Nigeria’s top 4 food imports *
Measure: Annual food imports in mllions of naira
Wheat
World’s largest importer
of US hard red and
white winter Wheat
$4bn @
$11m per day
 Nigeria’s food imports are growing at an
unsustainable rate of 11% per annum.
 Relying on the import of expensive food on
global markets fuels domestic inflation.
 Excessive imports putting high pressure on
Rice
World’s #2 Importer
$2bn @
$6m d
the Naira and hurting the economy
 Nigeria is importing what it can produce in
abundance.
Sugar
 Import dependency is hurting Nigerian
farmers, displacing local production and
creating rising unemployment.
 Import dependency is not acceptable, nor
Fish
sustainable fiscally, economically or politically.
*CBN
Federal Ministry of Agriculture and Rural Development
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Our Vision: Grow Nigeria’s agricultural sector
“To make Nigeria an agriculturally industrialized economy”
What we have stopped doing
× Treating agriculture as a development project
× Isolated projects that do not clearly grow the sector in a
clear and measurable way.
× Big government crowding out the private sector
Federal Ministry of Agriculture and Rural Development
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Our Vision: Grow Nigeria’s agricultural sector
“To make Nigeria an agriculturally industrialized economy”
What we have started doing!
 Treating agriculture as a business
 Integrating food production, storage, food processing and
industrial manufacturing by value chains (‘farm to fork’)
 Focusing on value chains where Nigeria has comparative
advantage
 Using agriculture to create jobs, wealth and ensure food security
 Investment-driven strategic partnerships with the private sector
 Investment drives to unlock potential of our States in agriculture
(joint drives with State Governors)
Federal Ministry of Agriculture and Rural Development
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New policies, institutions and financing
structures to drive sector growth:
1.
2.
3.
4.
Deregulation of seed and fertilizer sectors
Marketing reforms to structure markets
Innovative financing for agriculture
New agricultural investment framework
Do
re
o
Federal Ministry of Agriculture and Rural Development
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Government has fully deregulated the fertilizer and seed sector, and
sanitized the fertilizer subsidy program
Government Distributed
Government distributed fertilizer support
program
Private Sector Manufacturer/Supplier
gets order from FG
Fertilizer
Supplier
Federal
Government
State
Government
All Farmers
FG has manufacturer
deliver to states per
indent from state at
25% subsidy.
Private Sector Distributed
Private sector distributed fertilizer
support system, utilizing Input Vouchers
Private Sector
Fertilizer
Supplier
Targeted
Farmers
State “distributes”
fertilizer to farmers
occasionally adding
their own subsidy.
Only 11% of fertilizer
reaches the intended
farmers
Federal
&
State Govt.
Private sector sells
fertilizer to farmers at
market price “minus”
the fertilizer voucher
discount provided by
government.
94% of actual
farmers receive the
subsidized fertilizer
under the voucher
program.
States and FG
coordinate to
distribute fertilizer
vouchers to targeted
farmers.
Key takeaways
 Government
distribution system
is inefficient and
wastes resources
 Government
distribution
channels subsidize
corruption
 Implemented
Growth
Enhancement
Support Program
to directly target
famers
 Global Best
Practice
Federal Ministry of Agriculture and Rural Development
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Growth Enhancement Support Reached: 880,000 Poor Farmers
Reached Across 97% of Country
97% of States
Implemented GES
97% of LGA’s
Implemented GES
Federal Ministry of Agriculture and Rural Development
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Success Stories
Farmer Redeeming His Fertilizer via Growth
Enhancement Support
“For the first time I get my seeds and fertilizers fast
without any political interference”
- Nnenna, a female farmer in Abia State
“It is a happy day for us farmers and we feel honoured that
the Minister and his entourage have come to deliver
fertilizer to us which before now was beyond our reach”
– Mr. Bassey, a beneficiary in Akwa Ibom State
“GES is a clear process, no corruption in it, nobody
between me and my fertilizer and seeds”
– Abdullahi Ndastu the 1st beneficiary of GES, FCT.
“This is the first time we have this type of distribution
(GES) to the farmers, it will eliminate poverty. We thank
Mr. President”
– Mr. Omale, a beneficiary in Kogi
Federal Ministry of Agriculture and Rural Development
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Before
Before Rehabilitation
Rehabilitation
Successful Foreign Investment in the Nigerian Fertilizer Industry
Federal Ministry of Agriculture and Rural Development
Notore – Rebirth of the domestic fertilizer industry
|
After Rehabilitation
Successful Foreign Investment in the Nigerian Fertilizer
Industry
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Federal Ministry of Agriculture and Rural Development
Notore – Rebirth of the domestic fertilizer industry
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Notore
Successful Foreign Investment in the Nigerian Fertilizer Industry
Growth in Production
(Thousands of Metric Tons of Urea)
▪ In Joint Venture with
Mitsubishi, Notore is
expanding its capacity to
over 2.75 Million MT/year
Federal Ministry of Agriculture and Rural Development
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Mr. President Launches UTC and Butterfield
Commercialized Cassava Bread
- 28th of April 2012
Federal Ministry of Agriculture and Rural Development
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Transferring Knowledge Along the Chain
MD of UTC (1st Commercial Producer of Cassava Bread) holds training
session with Master Bakers.
Federal Ministry of Agriculture and Rural Development
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Case Study: High Quality Nigerian Rice Rolled Out
Modern
mill (30,000Nigerian
MT) begins operations
Ebonyi State
HighriceQuality
Rice: inEBONY
Rice, Ebonyi
Status
 Ministry working with entrepreneur to develop out-grower program and access
Federal Ministry of Agriculture and Rural Development
additional finance to expand operations.
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Government new rice policies are paying off – a very good sign
210,000 Metric Tons of New Rice Capacity (10% of current imports) executed in the past 1 year of Mr.
President’s Administration
Company
Atahi Rice
Ashi Feeds
Mikap
Dominion
Gauri
Clysters
Umza
Omor
Kare Hi-Tech
Oni-MP farms
Al-Uma
Ebony Agro
Lagos
State
Jigawa
Benue
Benue
Taraba
Bauchi
Nasarawa
Kano
Anambra
Zamfara
Cross River
Taraba
Ebonyi
Lagos
Capacity
MT/Yr
60,000
10,000
10,000
10,000
10,000
10,000
60,000
10,000
9,000
8,000
8,000
30,000
5,000
Status
In Process
Started Post June 2012
Started Post June 2012
In Process
In Process
In Process
New Line Started Post June 2012
In Process
In Process
In Process
In Process
Started Post June 2012
Started Post June 2012
Federal Ministry of Agriculture and Rural Development
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Case Study: Successfully Leveraged Private Sector to Establish Largest Rice
Farm in Nigeria
Largest rice producer and processor in Kenya “Dominion Farms” invests in 30,000 Ha Community
Rice Project in Taraba State
Status
 Attracted additional local Nigerian investor
 First set of 50 young commercial farmers from Taraba trained for 5 months in
Kenya.
 Initial rice mill of 10,000MT/yr ordered
Federal Ministry
of Agriculture
 Land clearing in process, initial planting to begin
in Dec
2012.and Rural Development | 15
Massive demand by farmers for new Cocoa Hybrids
Federal Ministry of Agriculture and Rural Development
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New High Yielding Cocoa Hybrids Developed by
Nigerian Scientists Launches a Cocoa Revolution|
Federal Ministry of Agriculture and Rural Development
17
Do
re
o
Horticulture Transformation
Federal Ministry of Agriculture and Rural Development
|
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Nigerian Agriculture Sector Investment Opportunities
Food processing and manufacturing from
local staple crops
 Rapid urbanization, rising middle class
incomes, supermarkets and demand for
"ease to prepare foods”.
 Target commodities are maize, soybeans,
rice, yams, cassava, sweet potatoes,
sorghum
Federal Ministry of Agriculture and Rural Development
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SCPZs are Highly Attractive to Investors
Local and international firms are beginning to engage with the Federal
Government as Anchor investors
Federal Ministry of Agriculture and Rural Development
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Staple Crop Processing Zones (SCPZ)
14 sites selected across Nigeria for the first set of SCPZs
Key Takeaways
14 Staple Crop Processing Zone sites around the Country
•
Sites are intended for the
production and processing of
priority Agricultural products
under the ATA; Rice, Sorghum,
Cassava, Livestock, Fisheries
Cocoa, Cotton, Maize, Oil Palm,
Onions, Soyabean and Tomato.
•
Additional SCPZ sites will be
designated to cover Livestock,
Oil Palm, Cotton, Cocoa, etc.
•
Development finance institutions
such as the World Bank and the
African Development Bank, have
pledged support.
.
Federal Ministry of Agriculture and Rural Development
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Rice
We have Identified the Anchor States for Rice SCPZs
S/N
LOCATION
STATE
ANCHOR INVESTOR
1.
KADAWA VALLEY
KANO STATE
DANGOTE IS CORE INVESTOR.
2.
BIDDA-BADEGGI
NIGER STATE
INDICATIVE INTEREST FROM FLOUR
MILLS OF NIGERIA
3.
IKWO
EBONYI STATE
EBONY RICE, EBONYI GOVT., UNDP,
SME’S
4.
GASSOL
TARABA STATE
DOMINION FARMS
5.
SOKOTO/KEBBI
SOKOTO & KEBBI STATES
NO CORE INVESTOR FOR NOW.
Cassava SCPZ has been Designated in the State (Ososa LGA)
Federal Ministry of Agriculture and Rural Development
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Horticulture
We have Identified the Anchor States for Horticulture SCPZs
S/N
LOCATION
STATE
REMARKS
1.
KADAWA VALLEY (TOMATO)
KANO
DANGOTE
GROUP
IS
THE
CORE
INVESTOR
2.
WANUNNE
(CITRUS, BENUE
TOMATO, MANGO)
3
CALABAR ( PINE-APPLE)
NO
STRONG
COMMITMENT.
POTENTIALLY, DEL MONTE FOODS
CROSS-RIVER
DANGOTE
GROUP
IS
THE
CORE
INVESTOR
Federal Ministry of Agriculture and Rural Development
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Over $8bn in Commitments from 17 Local and Foreign
Investors Over the Past Year
Sokoto
Katsina
Livestock
In the Northern
Region
Jigawa
Zamfara
Kebbi
Yobe
Borno
Kano
Bauchi
Kaduna
Mechanization &
Training across all
SCPZs
Gomb
e
Niger
Plateau
Kwara
Adamawa
FCT1)
Nasarawa
Oyo
Taraba
Kogi
Osun Ekiti
Benue
Ogun
Cassava Starch
& Sweeteners
Ondo
Lagos
Edo
Delta
AnaEnugu
mbra Ebonyi
Cross
Imo Abia
River
Parboiled
white rice
processing
Akwa
BayeIbom
Rivers
lsa
Tomato processing,
Horticulture, Sorghum
Fruit Concentrate
processing
Cassava Starch
and sweeteners
Federal Ministry of Agriculture and Rural Development
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Sample Rates of Returns to Agricultural Investments in
Nigeria
Crop
Modeled Investment
Theme
Start Up Capital
(Fixed Assets)
IRR
Payback
Period
Tomato
• Tomato paste and related
products plant to replace
imported Chinese paste
• $3.9M for plant with
15,000 tons/annum
20%
• ~ 4years
Cassava
• Cassava chips processing for
export to Northeast Asia
• $3.5M for plant with
115,000 tons/annum plant
19%
• 4.5 years
Cotton
• Cotton production and ginning
into lint for export and domestic
markets
• $3.2M for a 30,000 ton
/annum ginnery
20%
• 3.5 years
Maize
• Processing into animal feed to
serve fast growing livestock
market
• $3.5M for a 50,000
ton/annum plant
30%
• ~3.6 years
Rice
• Rice production and milling to
serve large domestic demand
• $6.1M on a 45,000
ton/annum rice mill
33%
• 3.5 years
Soya
Beans
• Processing into animal feeds,
industrial supplements and oil
for domestic markets
• $10M on a 100,000 ton
plant
106%
• 4.5 years
Source: Monitor Analysis; Interviews with Processors; NIRSAL Analysis
Federal Ministry of Agriculture and Rural Development
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Government incentives to support investors in agriculture
1. New fiscal incentives to encourage domestic import substitution
2. Removal of restrictions on areas of investment and maximum equity
ownership in investment by foreign investors
3. No currency exchange controls – free transfer of Capital, Profits and
Dividends
4. Constitutional guarantees against nationalization/expropriation of
investments
5. Zero percent (0 %) duty on agricultural machinery and equipment
imports
6. Pioneer Tax Holiday for agricultural investments
7. Duty Waivers and other industry related incentives e.g., based on use of
local raw materials, export orientation etc.
Federal Ministry of Agriculture and Rural Development
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Federal Ministry of Agriculture and Rural Development
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