African leaders are starting to appreciate the importance of high-level political support for agricultural transformation.
In a poignant comment, Albert Einstein said, "An empty stomach is not a good political adviser." African leaders are starting to appreciate this message by paying more attention to the importance of high-level political support for agricultural transformation.
Nigeria, under the leadership of former President Goodluck Jonathan, offers an inspirational example of the importance of high-level political support for agricultural transformation. During his tenure President Jonathan committed his cabinet to making agriculture a primary driver of economic development. He provided leadership by launching the Nigerian Agricultural Transformation Agenda (ATA) in 2011.
His vision was that agriculture would be Nigeria's new oil and a leading foreign exchange earner. Jonathan's goal for ATA—to add an extra 20 million metric tones of food to domestic food supply by 2015 and to create 3.5 million new jobs, was as bold and ambitious as his overall dream for Nigerian agriculture.
To achieve his goal, he hired US-trained and globally respected agricultural economist Akinwumi Adesina, currently the President of the African Development Bank Group. Armed with 25 years of working in some of the foremost international development organizations, Adesina began the hard work of turning the agricultural sector around.
As part of Nigeria's core strategy to diversify its economy agriculture started to be seen as a business sector. As a result, ATA was built on five major pillars that would ensure agriculture succeeds as a new business sector. The five pillars included: (1) efficient input delivery, or the Growth Enhancement Support (GES) scheme; (2) increased value addition, or the value chain approach; (3) the building of efficient output markets; (4) increased access to finance by farmers; and (5) policy reforms to create incentives for investors in the sector.
Under the GES scheme of the federal government's ATA, an electronic wallet scheme (e-wallet) was launched for farmers to receive subsidized inputs via an electronic voucher delivered to their cell phones. Nigeria is the first country in the world to launch the e-wallet scheme to deliver subsidized farm inputs at scale. More than 14 million farmers received their subsidized seeds and fertilizers using the e-wallet scheme between 2011 and 2014. During the same period, farmers redeemed a total of 1.37 million tones of fertilizer (worth US$1 billion), 102,703 tones of improved rice seeds, and 67,991 tones of improved maize seeds (worth US$0.3 billion).
Seed production in rice, maize, sorghum, soybean, and other products rose from about 4,252 tones in 2010 to 14,788 tones in 2011; 44,487 in 2012; and 149,484 in 2013. The number of private seed companies also grew from 11 in 2011 to about 133 in 2014. Today, about 99 seed companies are participating in the GES program.
As a result, in the period of 2011–2014, crop yields rose. An additional 7 million tones of rice, 12.6 million tones of maize, 2 million tones of cassava, 204,000 tones of sorghum, and 151,000 tones of soybean were produced. The national food import bill declined from US$ 7.1 billion in 2009 to US$ 4.3 billion in December 2013 and continues to decline.
Nigeria sought to become self-sufficient in rice and to reduce its costs to $2.5 billion on rice imports. Between 2012 and 2014, NERICA rice varieties (Faro 44 and Faro 52) were distributed to 6 million rice farmers. Rice-cultivated areas grew by 2 million hectares, while paddy production rose by an additional 7 million hectares.
Nigerian entrepreneurs responded to the rice revolution by establishing an additional 19 integrated rice mills with parboiling capacity and total combined paddy-milling capacity of 700,000 tones. A new rice policy put in place to encourage local production and milling as a replacement for rice importation has attracted $2.6 billion of private sector investments. A single investor, Aliko Dangote, Africa's richest man, is investing US$1 billion in the production of 210,000 tones of milled rice annually.
A composite flour policy for import substitution that requires up to 20% inclusion of high quality cassava flour (HQCF) in bread flour has attracted the participation of wheat millers and industrial bakers. Today there is 10% HQCF composite flour from the two largest wheat millers in the country and a universal 2% inclusion of HQCF in bread flour.
In addition, 35 industrial and small bakers now produce and market 20% HQCF bread. To ramp up the availability of HQCF, 12 medium-sized HQCF mills are being built to raise HQCF production from less than 30,000 tones/ha to 210,000 tones/ha per annum, for a universal inclusion of 10% HQCF. To ensure fresh cassava roots at the price and quantity for HQCF production, a total of 29,500 smallholder and 5,300 medium-sized mechanized cassava farms are being established at locations of medium-sized HQCF mills.
There have been interventions via GES in maize, cocoa, oil palm, sorghum, cotton, fisheries and aquaculture, and other value chains, to mention a few. A total of 21,356 tones of improved maize seed was distributed to 978,724 registered maize farmers free of charge between 2011 and 2014, and this led to an additional production of 12 million tones of maize.
Banks have also increased lending to the agricultural sector, facilitated by NIRSAL, the risk-sharing facility of the Central Bank of Nigeria; a total of US$0.26 billion was lent to fertilizer and seed companies by banks between 2011 and 2014. A US$100 million fund for Agricultural Financing in Nigeria was launched for long-term, tailored financing. The fund is capitalized by the Ministry of Agriculture, the German Development Bank, and Nigeria's Sovereign wealth fund.
To attract private sector processing companies into locations of high crop production, the concept of Staple Crop Processing Zones (SCPZ), a type of an economic zone, was introduced. Through the development of infrastructure (roads, energy, water, and natural gas), feedstock supply, and provision of fiscal incentives, SCPZs will help to de-risk agro processing for the private sector.
In the first phase of 12 SCPZs, there are two in the Southwest (fisheries in Lagos State and cassava in Ogun State); three in the North Central (rice in Niger State, cassava in Kogi State, and fruits in Benue State); two in the Southeast (rice in Anambra and States); three in the Northwest (rice in Kebbi and Sokoto States, tomato and sorghum in Kano State); and two in the Northeast (sorghum in Borno and rice in Taraba).
Recent data show that the agricultural sector grew by 9.19% (year-on-year) in the third quarter of 2014, up by 2.7% points from the third quarter of 2013. The agricultural sector grew by 38.53% between the third and fourth quarters of 2014, with crop production being the main driver, with a growth of 43.5%.
The story of Nigeria illustrates how quickly African countries can transform their agriculture if there is high-level political leadership and coordination across diverse ministries. But sustaining such initiatives requires long-term political commitment to agricultural transformation. It is only through such policy consistency that Africa can achieve the vision of feeding itself in a generation.
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