Investment guide to the nigerian agriculture sector by Henley Media Group

Federal Ministry of Agriculture and Rural Development

INVESTMENT GUIDE TO THE NIGERIAN AGRICULTURE SECTOR

Published by Henley Media Group Ltd in association with the Commonwealth Secretariat

Nigeria’s National Food Security Programme Prof. Sheikh Ahmed Abdullah Honourable Minister of Agriculture & Rural Development

The Nigerian Federal Ministry of Agriculture and Water Resources, as part of its quest to achieve the objectives of the present administration’s 7-point agenda, has developed a National Food Security Programme. The vision of the programme is to ensure sustainable access, availability and affordability of quality food to all Nigerians, and for Nigeria to become a significant net provider of food to the global community. The goals of the food security programme are: in the short term, to significantly improve Nigeria’s agricultural productivity; in the medium term, to expand and improve large-scale production, improve storage/processing capacity, as well as the required infrastructure to achieve food stability; and in the long term, to derive over 50 per cent of the nation’s foreign exchange through agricultural exports. The policy thrusts of the programme are shown in Table 1. In the 1960s, Nigeria was an agricultural economy. It was among the world’s leading producers of cocoa, palm oil, groundnuts, cotton, rubber. and hides and skin; and the agricultural sector contributed over 60 per cent to GDP (supplying 70 per cent of export and 95 per cent of food needs). Today, agriculture is still important to Nigeria’s economy, contributing 40 per cent to GDP against 13 per cent for oil. Of agricultural GDP, 85 per cent comes from crop production, 10 per

cent from livestock, 4 per cent from fisheries and 1 per cent from forestry. The sector employs about two-thirds of the total labour force and provides a livelihood for about 90 per cent of the rural population (72 per cent of the poor live in the rural areas).

“The country is blessed with reasonably abundant rainfall of between 300 mm to about 4,000 mm per annum, as well as an extensive coastal region that is very rich in fish and other marine products.” Nigeria has diverse and rich vegetation capable of supporting a heavy population of livestock, 68 million hectares of arable land, 267.7 billion cubic metres of surface water, 57.9 billion cubic metres of underground water, and 3.14 million hectares of irrigable land. The country is blessed with reasonably abundant rainfall of between 300 mm to about 4,000 mm per annum, as well as an extensive coastal region that is very rich in fish and other marine products.

Table 1. Policy thrusts of the Nigerian Food Security Programme. 1 Import substitution

In the medium term, substantial import substitution should be achieved for rice, sugar and wheat.

2 Substantial food security

Enhance food security, provide gainful employment and stem rural-urban migration.

3 Promotion of modern agricultural practices and agroprocessing

A major shift from the current subsistence nature of agriculture to modernised production, storage, processing and marketing. This would be achieved through private sector linkages and participation with necessary support and incentives from government.

4 Natural resources conservation

Conservation of land and water; a shift from the prevalent rain-fed agriculture to an irrigation farming system.

1 160 l Commonwealth Ministers Reference Book 2010

“An analysis of previous failures of private sector largescale participation in Nigeria has shown that the major negative issues were economic stability and security.”

Private sector participation in agriculture and the agribusiness sector appears to be the global direction for sustainable agricultural development. In developing this National Food Security Programme, the limitations of all previous initiatives through indepth reviews, factors responsible for previous failures of private sector large-scale participation, stakeholder input through extensive consultations and global best practices were taken into consideration. The programme thus addresses all the components of the agricultural value chain systematically.

“Funding mechanisms have been designed to ensure that adequate resources are mobilised from both public and private sources.”

Over the years, the previous administrations have tried, through various programmes, initiatives and policies to address these challenges and develop agriculture in Nigeria.

The key features of the programme include providing a conducive environment for private sector involvement, encouraging large-scale commercial farming with strategic linkages to smallholder farmers, and significantly reducing post-harvest losses through adequate storage, processing and appropriate market outlets. Also, funding mechanisms have been designed to ensure that adequate resources are mobilised from both public and private sources, with all stakeholder roles clearly defined.

On reviewing the performances of all these initiatives, the weaknesses identified were mainly on policy inconsistencies, the over-emphasis on production without due consideration to other value chain requirements (especially agroprocessing and market infrastructure) and funding. An analysis of previous failures of private sector large-scale participation in Nigeria has shown that the major negative issues were economic stability and security.

Other features include: land certification, opening up of land for large-scale commercial farming, deregulation of inputs, provision of input subsidies directly to farmers, encouraging the setting up of agro-service centres in every local government for easy access to inputs by farmers, increasing current Federal Government storage capacity for strategic food reserve from 300,000m tonnes to 3,000,000m tonnes by 2011 through the construction of silos; also, encouraging construction of community warehouses

Figure 1. The chain of agriculture logistics.

Commonwealth Ministers Reference Book 2010 l 161 2

Special Feature: Nigerian Federal Ministry of Agriculture & Rural Development

Despite Nigeria’s rich agricultural resource endowment, the agricultural sector has been growing at a relatively low rate. Less than 50 per cent of the country’s cultivable agricultural land is under cultivation, and only 7 per cent (220,000 ha) of irrigable land is under irrigation. Even then, smallholders and traditional farmers who use rudimentary production techniques cultivate over 90 per cent of this land. The agricultural sector is faced with a myriad of challenges, with average yields of major staple crops far below that of other developing countries. The result is that Nigeria spends over US$2.8 billion annually to import food for local consumption.

Special Investment Destination: Anambra State, Nigeria

Table 2. Nigeria’s comparative advantage crops, by region. Region

Crops

North Central

Rice, maize, fruit, millet, sorghum, yam, sugar cane, cassava, cowpea, tomato, cotton, vegetables

North West

Wheat, rice, maize, millet, sorghum, vegetables, sugar cane, cassava, cowpea, tomato, cotton

North East

Wheat, rice, maize, fruit, millet, sorghum, vegetables, sugar cane, cassava, cowpea, tomato, cotton

South West

Rice, fruit, yam, vegetables, cassava, cowpea, cocoa, oil palm

South South

Rice, fruit, yam, vegetables, cassava, cocoa, oil palm

South East

Rice, yam, vegetables, cassava, cocoa, oil palm

and conditioning centres in all the geopolitical zones of the country. This will be accompanied by development of agro-industrial parks and cottage industries, market development through establishing infrastructure for specialised markets, and infrastructure for exports. A guaranteed minimum price for farm products is an important aspect, along with integrated water management, raising new generation farmers, and strengthening research and development especially in the areas of yield dynamics and biotechnology.

Investment opportunities in Nigeria’s agricultural sector With its huge natural and human resources, Nigeria offers opportunities as an emerging market for agricultural investments. Nigeria’s potential for crops, livestock and fishery remains huge, buoyed by a steady and favourable water supply level, and a largely unused potential irrigable area. The potential for fish farming in Nigeria is estimated at 5 million tonnes per annum. Investment opportunities exist in the following areas: • Production Large scale commercial farming Input service delivery Fertiliser manufacturing • Storage Community warehousing Conditioning centres • Processing Cottage industries Integrated agro-industrial centres • Marketing Specialised market development

3162 l Commonwealth Ministers Reference Book 2010

Packaging and branding Integrated retail outlets • Research, and • Biofuel development Specifically, there are great opportunities in the production, processing and marketing of: • Cash crops such as cotton, oil palm, fruit trees, rubber, sugar cane and jatropha • Food crops including rice, wheat, cassava, maize, soya beans, millet, tomatoes, vegetables and medicinal plants • Poultry – broilers, eggs and poultry feed production • Livestock – dairy (milk) development and abattoir (meat) enhancement programme, cold chain development, meat processing, animal feeds production, and • Aquaculture – hatchery, feed mills development and fisheries production, cold chain fish processing, and fish feed production. The Government of Nigeria is already implementing a plan to create a favourable, enabling and sustainable business environment for investors. Some of the strategies being implemented include: • Provision of a N200bn Commercial Agriculture Credit Scheme – a concessionary credit scheme designed for single-digit lending to agriculture • Construction of silos and warehousing complexes to be used for storage, outlets and standardisation • Setting up of 300 one-stop agro-input services centres to improve access and enhance input service delivery, especially in the areas of fertilisers, seeds, agro-chemicals and mechanisation • Provision of export handling, preservation and conditioning centres which will include washing,

stock and fingerling, livestock and fish feed and premixes, agro-chemicals, vaccines and drugs to farmers;

• The implementation of a guaranteed minimum price mechanism by the government to ensure guaranteed offtake of agricultural produce such as grains

− determine and monitor target production of strategic commodities of comparative advantage in the state;

• Implementation of a strategic master plan of rural infrastructure development

− promote the development by the private sector of at least two commercial farms for each of the chosen strategic commodities through facilitation of land acquisition, provision of basic infrastructure, seed and credit for bush clearing and land preparation. Such credit shall be converted to equity for the state in the farms.

• Aggressive implementation of a power development programme. Federal incentives for private sector involvement in agriculture include a zero tariff on agricultural machinery and chemical imports, and duty free spares imports for processing machinery. Dividends are tax free for a period of five years, and tax free agricultural loans are available for repayment within seven years. Imports will be banned of some agricultural products such as cassava, poultry and vegetable oil, and foreign investment will be protected by the legal framework, supported by bank guarantees and risk insurance.

Public-private partnership approach The general approach of the PPP frameworks will be for each party to have a defined role. A summary of the roles is listed below. • Federal Government will: − through the Federal Ministry of Agriculture and Water Resources (FMA&WR) play the planning, co-ordination, facilitative and monitoring roles in the overall scheme; − provide financing for large-scale farming through the floating of a N200bn bond; − provide subsidy for various inputs as well as required funding for research efforts and initiatives; − drive the development of new and improved seeds, brood stocks, storage and processing technologies for propagation to farmers; − streamline modalities for co-operatives to benefit from this programme. • States will: − play a financing role by funding farm support centres, community farm settlements and providing credit to commercial banks and microfinance institutions for onward lending to small and medium-scale farmers; − subsidise the supply of the certified seeds and seedlings, farm machinery such as tractors, brood

• Local governments will: − Support state governments in providing the basic infrastructure required in the rural areas and farming communities, including access roads, power and water, market facilities etc. • The private sector will: − Collaborate with various tiers of government to finance and execute and operate major programmes and projects in these schemes. These will include farm support centres, irrigation systems, fertiliser plants, mechanisation (the tractor programme), abattoirs, livestock markets, feed and premix plants, meat processing equipment, extension services etc. (The private sector includes commercial banks, micro-finance institutions, private agribusiness companies, major users of agro-products, construction companies and nongovernmental organisations.) • Farmers will: − shift from subsistence farming to agribusiness − form capitalised co-operatives and register formally with government. • International donor partners will: − support specific projects.

NIGERIA’S AGRO-ECOLOGICAL ZONES Contact Details Federal Ministry of Agriculture & Rural Development, PMB 135, Area 11, Garki, Abuja, Nigeria Tel: +234 9 314 1931 Fax: +234 9 314 2532 Emails: asrumah@yahoo.com nfrahq@nfra.org

Commonwealth Ministers Reference Book 2010 l 163 4

Special Feature: Nigerian Federal Ministry of Agriculture & Rural Development

drying and storage chambers, sorting, grading and packaging facilities, storage crate handling and cargo facilities

Special Investment Destination: Anambra State, Nigeria POLICY THRUSTS OF THE PROGRAMME Table 2. Nigeria’s comparative advantage crops, by region. Region

Crops

1North Central Import Substitution North West

Substantial Food

North East Security

maize, fruit, millet,import sorghum, yam, sugar cane, cassava, In the mediumRice, term, substantial substitution should be cowpea, tomato, cotton, vegetables achieved for rice, sugar and wheat. Wheat, rice, maize, millet, sorghum, vegetables, sugar cane, cowpea, tomato, cottonemployment and stem Enhance foodcassava, security, provide gainful Wheat, rice, maize, fruit, millet, sorghum, vegetables, sugar rural-urban migration. cane, cassava, cowpea, tomato, cotton

West 3South Promotion of Modern South Agricultural South Practices Agro- Processing South & East

Rice, fruit, yam, vegetables, cassava,nature cowpea,ofcocoa, oil palm - Major shift from the current subsistence agriculture fruit, yam, vegetables, cassava, cocoa, oil palm to modernizedRice, agricultural production, storage, processing and marketing Rice, yam, vegetables, cassava, cocoa, oil palm - To be achieved through private sector linkages and participation and branding and conditioning centres in all the geopolitical zones of supportPackaging with necessary and incentives from government the country. This will be accompanied by development Integrated retail outlets Natural Resources - Conservation of4agro-industrial parks and cottage industries, market of land and water. • Research, and Conservation - Shift from development through establishing infrastructure forthe prevalent rain-fed agriculture to an irrigation • Biofuel development system specialised markets, and infrastructurefarming for exports.

3.4 – 4m is(MT) A guaranteed minimum price for farm products an important aspect, along with integrated water management, raising new generation farmers, and strengthening research and development especially in CURRENT STATUS PRODUCTION the areas of yield dynamicsOF andFOOD biotechnology.

Specifically, there are great opportunities in the production, processing and marketing of: • Cash crops such as cotton, oil palm, fruit trees, rubber, sugar cane and jatropha

IN NIGERIA

• Food crops including rice, wheat, cassava, maize, soya beans, millet, tomatoes, vegetables and Investment opportunities in Nigeria’s CROP NATIONAL PRODUCTION IN (‘000 medicinal plants MT) agricultural sector

2002

2003

With its huge natural and human resources, Nigeria Cassava 27,938.05 28,545.87 offers emerging market21,742.56 for Yam opportunities as an 21,707.14 agricultural investments.

Cocoyam 2,632.98 2,622.32 Sweet Potato 1,107.54 1,154.19 Nigeria’s potential for crops, livestock and fishery Irish Potato 587.12 665.22 remains huge, buoyed by a steady and favourable Maize 4,483.40 water supply level, and 4,424.28 a largely unused potential Sorghum 4,649.11 irrigable area. The potential for fish farming4,626.52 in Nigeria Rice 2,236.28 2,367.08 is estimated at 5 million tonnes per annum. Millet 3,944.33 3,964.27 Investment exist in the following areas: Soybeans opportunities 335.32 340.824 •Groundnut Production 2,040.31 1,996.84 Cowpea 1,217.70 1,232.52 Large scale commercial farming Input service delivery Fertiliser manufacturing • Storage LIVESTOCK PRODUCTION LEVELS (MT) Community warehousing Conditioning centres

7000 6000 5000 4000 3000 2000 1000 0

• Processing Cottage industries Integrated agro-industrial centres • Marketing Specialised market development

162 l Commonwealth Ministers Reference Book 2010

2006 •2004 Poultry – broilers, 2005 eggs and poultry feed production 31,067.45 36,582.98 40,572.89 •24,976.99 Livestock – dairy (milk) development 28,890.42 and abattoir 27,126.46 (meat) enhancement programme, cold2,764.91 chain 2,655.74 2,718.94 development, meat processing, animal feeds 1,247.88 1,452.71 1,513.59 production, and 1,044.96 699.82 1,142.28 •5,000.72 Aquaculture – hatchery, feed mills development 6,203.06 6,767.25 and fisheries production, cold chain fish processing, 4,657.29 5,039.27 5,251.24 and fish feed production. 2,415.79 2,659.57 2,765.29

4,088.12

3,969.65

4,076.04

The Government of Nigeria is already implementing 403.43 496.41 484.05 a plan to create a favourable, enabling and sustainable 2,231.92 2,700.83 2,736.50 business environment for investors. Some of the 1,238.85 1,529.44 1,575.54 strategies being implemented include: • Provision of a N200bn Commercial Agriculture Credit Scheme – a concessionary credit scheme designed for single-digit lending to agriculture • Construction of silos and warehousing complexes to be used for storage, outlets and standardisation • Setting up of 300 one-stop agro-input services centres to improve access and enhance input service delivery, especially in the areas of fertilisers, seeds, agro-chemicals and mechanisation • Provision of export handling, preservation and conditioning centres which will include washing,

stock and fingerling, livestock and fish feed and premixes, agro-chemicals, vaccines and drugs to farmers;

• The implementation of a guaranteed minimum price mechanism by the government to ensure guaranteed offtake of agricultural produce such as grains

− determine and monitor target production of strategic commodities of comparative advantage in the state;

• Implementation of a strategic master plan of rural infrastructure development

support specific projects. FISHERIES PRODUCTION (MILLION METRIC −TONNES)

− drive the development of new and improved seeds, brood stocks, storage and processing technologies for propagation to farmers;

− streamline modalities for co-operatives to benefit from this programme.

• States will: − play a financing role by funding farm support centres, community farm settlements and providing credit to commercial banks and microfinance institutions for onward lending to small and medium-scale farmers;

2 0

Fisheries

− subsidise the supply of the certified seeds and seedlings, farm machinery such as tractors, brood

Demand Contact Details

Current

Federal Ministry of Agriculture & Rural Development, PMB 135, Area 11, Garki, Abuja, Nigeria Tel: +234 9 314 1931 Fax: +234 9 314 2532 Emails: asrumah@yahoo.com nfrahq@nfra.org

Potential

Commonwealth Ministers Reference Book 2010 l 163 6

Special Feature: Nigerian Federal Ministry of Agriculture & Rural Development

drying and storage chambers, sorting, grading and packaging facilities, storage crate handling and cargo facilities

Special Investment Destination: Anambra State, Nigeria

Region

Crops

North Central

Rice, maize, fruit, millet, sorghum, yam, sugar cane, cassava, cowpea, tomato, cotton, vegetables

North West

Wheat, rice, maize, millet, sorghum, vegetables, sugar cane, cassava, cowpea, tomato, cotton

North East

Wheat, rice, maize, fruit, millet, sorghum, vegetables, sugar cane, cassava, cowpea, tomato, cotton

South West

Rice, fruit, yam, vegetables, cassava, cowpea, cocoa, oil palm

South South

Rice, fruit, yam, vegetables, cassava, cocoa, oil palm

South East

Rice, yam, vegetables, cassava, cocoa, oil palm

Investment opportunities Nigeria’s & IMPORT SUBSTANTIAL FOOD in SECURITY agricultural sector

• Poultry – broilers, eggs and poultry feed With its huge natural and human resources, Nigeria production S/NO. COMMODITY PRODUCTION POTENTIAL OF EACH STATE WITH EVIDENCE offers opportunities as an emerging market for • Livestock – dairy (milk) development and abattoir agricultural investments. (meat) enhancement programme, cold chain

Rice

Anambra Bayelsa, Benue, Delta, Ebonyi, Edo, Kebbi ,Kogi,

development, meat processing, animal feeds Nigeria’s potential for crops, livestock Kwara and fishery , Niger, Ogun, Rivers , Taraba production, and remains huge, buoyed by a steady and favourable 2 Bauchi, Borno, Jigawa, Kano, Katsina, Kebbi,feed Yobe, • Aquaculture – hatchery, millsZamfara development water supply level, and a largely unused potential and fisheries production, cold chain fish processing, 3 Sugarcane Adamawa, Kano, Kogi ,Kwara, Niger, Taraba, Zamfara irrigable area. The potential for fish farming in Nigeria and fish feed production. is4estimated atTomato 5 million tonnes per annum. Adamawa, Kano, Katsina. Kogi , Kwara, Niger, Taraba, Zamfara

5 Cotton 6 Cocoa • Production 7 Large scale Jatropha commercial farming 8 Input service Rubber delivery 9 Fertiliser manufacturing Oil Palm

Gombe, Kano, Jigawa, Katsina, Ogun, Oyo, Zamfara The Government of Nigeria is already implementing Ondo, Edo, Osun, Ogun, Oyo, Kogi,aEkiti, Crossenabling River and sustainable a plan to create favourable, business environment for investors. Katsina, Jigawa, Kebbi, Sokoto, Borno, Yobe, Kano Some of the strategies being implemented include: Edo, Delta, Ondo, Ogun, Abia, Imo • Provision of a N200bn Commercial Agriculture Kogi, Ebonyi ,Edo, Abia, Imo, Anambra ,Rivers, Cross River, Akwa Credit Scheme – a concessionary credit scheme Ibom • Storage designed for single-digit lending to agriculture 10CommunityGroundnuts Kano, Katsina, Sokoto, Jigawa, Kaduna warehousing • Construction of silos and warehousing complexes to beTaraba, used for storage, outlets and standardisation 11Conditioning Cassava Benue, Ogun, Imo, Oyo, Kogi, Kaduna, Ondo, Cross River, centres Enugu • Setting up of 300 one-stop agro-input services • Processing centres to improve access and enhance input service 12Cottage industries Livestock Maiduguri, Yobe, Bauchi, Taraba, Adamawa, Gombe, and Sokoto delivery, especially in the areas of fertilisers, seeds, 13Integrated agro-industrial Fisheries centres Aquaculture: All States & FCT agro-chemicals and mechanisation Artisanal: All coastal States, Anambra, Benue, Borno, Bauchi, • Marketing • Provision of Niger, export handling, preservation Imo, Kebbi, Kano, Katsina, Kogi, Nassarawa, Taraba and and the Specialised market development conditioning centres which will include washing, FCT. Industrial: Akwa-Ibom, Bayelsa, Cross River, Delta, Lagos, Ondo, and Rivers. 162 l Commonwealth Ministers ReferenceOgun Book 2010 Investment opportunities exist in the following areas:

stock and fingerling, livestock and fish feed and premixes, agro-chemicals, vaccines and drugs to farmers;

• The implementation of a guaranteed minimum price mechanism by the government to ensure guaranteed offtake of agricultural produce such as grains

− determine and monitor target production of strategic commodities of comparative advantage in the state;

• Implementation of a strategic master plan of rural infrastructure development

SUBSTANTIAL FOOD SECURITY & IMPORT SUBSTITUTION − provide financing for large-scale farming through − form capitalised co-operatives and register formally the floating of a N200bn bond;

with government. − provide subsidy for various inputs as well as • International donor partners will: COMMODITY TARGETS: 2008 -2011 required funding for research efforts and initiatives; − support specific projects. − drive the development of new and improved seeds, CROPS brood stocks, storage and processing technologies Cassava • Yield: increase from 15MT/Ha to 60MT/Ha. for propagation to farmers;

% INCREASE

100% • Production: increase from 49million MT to 100million 104% − streamline modalities for co-operatives to benefit MT annually Contact Details from this programme. • Attain 10% cassava flour in bread making. • States will: Federal Ministry of Agriculture Rice • Increase production from 2.8 million metric tonnes of & Rural 100% − play a financing role by funding farm support Development, PMB Area 11, Garki, Abuja, paddy to 5.6 million metric tonnes paddy rice per135, annum. centres, community farm settlements and Nigeria Millet • Attainbanks 6.5 million metric tonnes of millet through improved 62.5% providing credit to commercial and Tel: +234 9 314 1931 farm inputs, and irrigation from 4.0 million MT/annum microfinance institutions for onward lending to Fax: +234 9 314 2532 small and medium-scale farmers;500,000 metric tonnes of Wheat • Attain local asrumah@yahoo.com production to replace 614% Emails: excessive dependence on wheat importation from the curnfrahq@nfra.org − subsidise the supply of the certified seeds and rent 70,000 MT/annum seedlings, farm machinery such as tractors, brood Commonwealth Ministers Reference Book 2010 l 163 8

Special Feature: Nigerian Federal Ministry of Agriculture & Rural Development

drying and storage chambers, sorting, grading and packaging facilities, storage crate handling and cargo facilities

Special Investment Destination: Anambra State, Nigeria

Table 2. Nigeria’s comparative advantage crops, by region. Region

Crops

COMMODITY North Central

TARGETS: 2008fruit, -2011 %cassava, INCREASE Rice, maize, millet, sorghum, yam, sugar cane, cowpea, tomato, cotton, vegetables

North West

Sugar

CROPS

•

Wheat, rice, maize, millet, sorghum, vegetables, sugar cane, National demand for sugar is 2.2 million metric 1034% cassava, cowpea, tomato, cottontonnes.

Current local production is 194,000 mt per annum. With a Wheat, rice, maize, fruit, millet, sorghum, vegetables, sugar current 10,000 ha commercial pluscowpea, 50,000tomato, ha under cane, cassava, cottonlocal producers of sugarcane, the country needs to increase South West Rice, fruit, yam, vegetables, cassava, cowpea, cocoa, oil palm cultivation of sugar cane by 230,000 ha to attain self -sufSouth South Rice, fruit, yam, vegetables, cassava, cocoa, oil palm ficiency. South East Rice, yam, vegetables, cassava, cocoa, oil palm Tomato • Attain production potential of 20 tonnes/ hectare and from 100% 1.1million MT to 2.2 million MT annually. Packaging and branding and conditioning centres in all the geopolitical zones of the country. This will be accompanied by development Cotton • Attain increase in cotton production from retail 350,000mt 186% Integrated outlets to 1 of agro-industrial parks and cottageMT industries, market million • Research, and development through establishing infrastructure for Cocoa • Attain 700,000 metric tonnes of production by 2011from 84% • Biofuel development specialised markets, and infrastructure for exports. current 380, 000 MT per year A guaranteed minimum price for farm products is Specifically, there are great opportunities in the Palm Oil aspect, along • Attain 1.26million of oil palmprocessing and 600,000mt 50% an important with integrated watermetric tonnes production, and marketing of: of palm kernel palm oil and management, raising new generation farmers,from and current 840,000mt • Cash crops such as cotton, oil palm, fruit trees, kernel strengthening research and400,000mt developmentpalm especially in rubber, sugar cane and jatropha the areas of yield dynamics and biotechnology. Rubber • Attain 300,000mt of rubber from the current 200,000mt (pa) cassava, maize, 50% • Food crops including rice, wheat, North East

soya beans, millet, tomatoes, vegetables and Investment opportunities in Nigeria’s medicinal plants agricultural sector LIVESTOCK & FISHERIES • Poultry – broilers, eggs and poultry feed 50% Poultry • Attain a population of 249 million from current 166 million With its huge natural and human resources, Nigeria production offers for of 67.6 million Goatopportunities as• an emerging Attain a market population from the current mil30% • Livestock – dairy (milk)52development and abattoir agricultural investments. lion (meat) enhancement programme, cold chain development, meat processing, animal feeds 30% Sheep potential for• crops, Attain a population Nigeria’s livestock and fishery of 42.9 million from the current 33 milproduction, and remains huge, buoyed by alion. steady and favourable • Aquaculture – hatchery, feed mills development water supply level, and potential of 20 million Cattle • a largely Attainunused a population from the current 16 million 25% and fisheries production, cold chain fish processing, irrigable area. The potential for fish farming in Nigeria Pig • Attain a population of 8.25 million the production. current 6.6 mil25% andfrom fish feed is estimated at 5 million tonnes per annum.

lion Government Nigeriafrom is already implementing Fisheriesopportunities • exist Attain production million metric oftonnes 200% Investment in the following target areas: of 1.5The a plan to create a favourable, enabling and sustainable the current 0.5 million MT • Production Large scale commercial farming Input service delivery

LAND Fertiliser manufacturing • Storage

IRRIGATION PLAN CommunityMASTER warehousing Conditioning centres

•BIODIESEL Processing & JATROPHA Cottage industries

business environment for investors. Some of the strategies being implemented include:

CROSS CUTTING ISSUES • Provision of a N200bn Commercial Agriculture • Land clearing, development, preparation, registration & Credit Scheme – a concessionary credit scheme certification. designed for single-digit lending to agriculture • Drainage, Dams• &Construction irrigation infrastructure on account of to of silos and warehousing complexes climate change tobeguarantee all year round agriculture used for storage, outlets and standardisation • Cultivate 2 million hectares in 7 front services -line • Setting up of of 300Jatropha one-stop agro-input states from now centres to 2015 to improve access and enhance input service

Integrated agro-industrial centres • Marketing Specialised market development

9162 l Commonwealth Ministers Reference Book 2010

delivery, especially in the areas of fertilisers, seeds, agro-chemicals and mechanisation • Provision of export handling, preservation and conditioning centres which will include washing,

INPUT SERVICE • Strategic inputs forprice production− to be channeled primarily through Extendetermine and monitor target production of • The implementation of a guaranteed minimum DELIVERY sion Service Systems. strategic commodities of comparative advantage in mechanism by the government to ensure guaranteed the state; in service delivery. Deregulation of the sector for efficiency offtake of agricultural• produce such as grains

FGNmaster 50% plan seedofsubsidy − promote the development by the private sector • Implementation of a • strategic rural • Establishment of Agro Service Centres of at least two commercial farms for each of infrastructure development the chosen strategic commodities • subsidy management increased production by through farmers. • Aggressive implementation of a power development to guarantee facilitation of land acquisition, provision of basic RESEARCH • Feasibility Studies on Agro-Potentials of Nigeria programme. infrastructure, seed and credit for bush clearing and DEVELOPMENT • Land Studies/Surveys Federal incentives for • private sector involvement Extensive development of Seedsland andpreparation. SeedlingsSuch credit shall be converted to equity for the state in the farms. in agriculture include a zero tariff on agricultural LEGAL FRAME- • Establishment of legal framework for strategy implementation (legal draft

• Local governments will: machinery and chemical imports, and duty free WORK bills approval: National Food Reserve Agency, Nigeria Agricultural Quarspares imports for processing machinery. Dividends − Support state governments in providing the basic antine Service, Nigeria Integrated Water Resources Management Agency, are tax free for a period of five years, and tax free infrastructure required in the rural areas and Gurara Water Management Authority, Nigeria Hydrological Services Agency agricultural loans are available for repayment farming communities, including access roads, Development Fund)  within seven years. Importsand will National be bannedAgricultural of power and water, market facilities etc. GOVERNANCE • Implementation responsibilities at the Federal, some agricultural products such as cassava, poultry • The private sectorState will: and Local Governand vegetable oil, and foreign investment will be STRUCTURE ment levels defined. − Collaborate with various tiers of government protected by the legal • framework, supported by Implementation monitoring mechanisms will be established through to finance and execute and operate major bank guarantees and risk insurance. existing governance structures programmes and a consultative forum made up ofThese the and projects in these schemes. relevant stakeholders. will include farm support centres, irrigation Public-private partnership approach assessors to report on implementation progress on a periodic • Independent systems, fertiliser plants, mechanisation (the tractor basis. programme), abattoirs, livestock markets, feed The general approach of the PPP frameworks will be and premix plants, meat processing equipment, Public Budget Initiatives (Appropriation) forFUNDING each party to have aA.defined role.Sector A summary of extension services etc. (The private sector includes the roles is listed below.• Strengthening of agricultural research and development capacity for imcommercial banks, micro-finance institutions, breeding stock and fingerlings. • Federal Government will:proved crops and seed varieties, private agribusiness companies, major users of • Provision of seed capital grant towards enhancing extension service deliv− through the Federal Ministry of Agriculture and agro-products, construction companies and nonery. Water Resources (FMA&WR) play the planning, governmental organisations.) • Development of subsidy framework on inputs generally co-ordination, facilitative and monitoring roles in • Farmers will: • Establishment of a comprehensive market information system. the overall scheme; − shift from subsistence to agribusiness to • Establishment of a guaranteed minimum price on farming select commodities − provide financing for large-scale farming through − form capitalised co-operatives and register formally the floating of a N200bnprotect bond; farmers from product price fluctuations. government. • Institution of buyer-of-last resortwith framework to encourage farmers’ con− provide subsidy for various inputs as well as • International donor partners will: tinuous participation in farming activities. required funding for research efforts and initiatives; − support specific projects. − drive the development of new and improved seeds, B. Special Intervention Fund Programmes (Natural Resources Fund/ADF) brood stocks, storage and processing technologies • Enhancing the national strategic food reserve programme by completing for propagation to farmers;

on-going silos, construction of specialized warehouse and establishment

− streamline modalities forofco-operatives to benefit conditioning and processingContact centres.Details from this programme.

• Promotion of massive market infrastructural development in partnership with State Governments and Private Federal sector Ministry of Agriculture & Rural − play a financing role• by funding Supportfarm for support agricultural research and training through research system Development, PMB 135, Area 11, Garki, Abuja, centres, community farmdevelopment, settlements andstrengthening ofNigeria research institutes and federal colleges providing credit to commercial banks andand other components Tel: +234 314national 1931 of agriculture of9the agricultural research microfinance institutionssystem for onward lending sector to Fax:for +234 9 314 2532 & private research feasibility studies.

• States will:

small and medium-scale farmers;

− subsidise the supply of the certified seeds and seedlings, farm machinery such as tractors, brood

Emails: asrumah@yahoo.com nfrahq@nfra.org

Commonwealth Ministers Reference Book 2010 l 16310

Special Feature: Nigerian Federal Ministry of Agriculture & Rural Development

stock and fingerling, livestock and fish feed and drying and storage chambers, sorting, grading and premixes, agro-chemicals, vaccines and drugs to packaging facilities, storage crate handling and cargo CROSS CUTTINGfarmers; ISSUES facilities

Special Investment Destination: Anambra State, Nigeria

Table 2. Nigeria’s comparative advantage crops, by region. Region

FUNDING North Central North West North East

CROSS Crops CUTTING ISSUES • Development of an effective and fruit, efficient system for agribusiness Rice, maize, millet, credit sorghum, yam, sugar cane, cassava, through the development and tomato, use ofcotton, micro-finance cowpea, vegetables institutions. • Facilitation of land clearing activities for factory driven Wheat,and rice, development maize, millet, sorghum, vegetables, sugar cane, commercial farming incassava, selected commodities. cowpea, tomato, cotton • Pest Control Management Wheat, rice, maize, fruit, millet, sorghum, vegetables, sugar cane, cassava, cowpea, tomato, cotton

South West South South South East

C. International Donor Funding Rice, fruit, yam, vegetables, cassava, cowpea, cocoa, oil palm • Fadama II, RUFIN, RUMIDEP, World Commercial Agri. Development, Rice, fruit, yam,Bank vegetables, cassava, cocoa, oil palm etc. Rice, yam, vegetables, cassava, cocoa, oil palm

D. inPublic Private Partnership Packaging and branding and conditioning centres all the geopolitical zones of Land Cadastral Project the country. This will • be accompanied by development Integrated retail outlets • andConditioning Centre Project of agro-industrial parks cottage industries, market • Research, and development through• establishing infrastructure for Rice Processing Facility • Biofuel development specialised markets, and for exports. • infrastructure Tractorisation A guaranteed minimum for farmdistribution products is Specifically, there are great opportunities in the • price Fertilizer an important aspect, along with integrated water production,in processing and marketing of: • Agro processing: Agric Park Development six centres (N50B Scope management, raising new generation farmers, and • Cash crops such as cotton, oil palm, fruit trees, strengthening research and development especially in rubber, sugar cane and jatropha the areas of yield dynamics and biotechnology. • Food crops including rice, wheat, cassava, maize, © Neil Palmer (CIAT). soya beans, millet, tomatoes, vegetables and Investment opportunities in Nigeria’s medicinal plants agricultural sector With its huge natural and human resources, Nigeria offers opportunities as an emerging market for agricultural investments. Nigeria’s potential for crops, livestock and fishery remains huge, buoyed by a steady and favourable water supply level, and a largely unused potential irrigable area. The potential for fish farming in Nigeria is estimated at 5 million tonnes per annum. Investment opportunities exist in the following areas: • Production Large scale commercial farming Input service delivery Fertiliser manufacturing • Storage Community warehousing Conditioning centres • Processing Cottage industries Integrated agro-industrial centres • Marketing Specialised market development

162 l Commonwealth Ministers Reference Book 2010 11

• Poultry – broilers, eggs and poultry feed production • Livestock – dairy (milk) development and abattoir (meat) enhancement programme, cold chain development, meat processing, animal feeds production, and • Aquaculture – hatchery, feed mills development and fisheries production, cold chain fish processing, and fish feed production. The Government of Nigeria is already implementing a plan to create a favourable, enabling and sustainable business environment for investors. Some of the strategies being implemented include: • Provision of a N200bn Commercial Agriculture Credit Scheme – a concessionary credit scheme designed for single-digit lending to agriculture • Construction of silos and warehousing complexes to be used for storage, outlets and standardisation • Setting up of 300 one-stop agro-input services centres to improve access and enhance input service delivery, especially in the areas of fertilisers, seeds, agro-chemicals and mechanisation • Provision of export handling, preservation and conditioning centres which will include washing,

stock and fingerling, livestock and fish feed and premixes, vaccines to stock andagro-chemicals, fingerling, livestock andand fishdrugs feed and farmers; premixes, agro-chemicals, vaccines and drugs to farmers; and monitor target production of − determine

by the government to ensure guaranteed •mechanism The implementation of a guaranteed minimum price offtake of agricultural produce such as grains mechanism by the government to ensure guaranteed offtake of agricultural produce such plan as grains • Implementation of a strategic master of rural

commodities of comparative advantage −strategic determine and monitor target production of in the state; commodities of comparative advantage in strategic the state;the development by the private sector − promote

development •infrastructure Implementation of a strategic master plan of rural infrastructure development • Aggressive implementation of a power development •programme. Aggressive implementation of a power development programme. Federal incentives for private sector involvement inFederal agriculture include zero tariff on agricultural incentives fora private sector involvement machinery and include chemicala imports, free in agriculture zero tariffand on duty agricultural spares imports forchemical processing machinery. Dividends machinery and imports, and duty free are tax free for a for period of five years, and tax free spares imports processing machinery. Dividends agricultural available repayment are tax freeloans for a are period of fivefor years, and tax free within seven years. Imports will for be banned of agricultural loans are available repayment some agricultural products such as cassava, poultry within seven years. Imports will be banned of and vegetable oil, and foreignsuch investment willpoultry be some agricultural products as cassava, protected by theoil, legal supportedwill by be and vegetable andframework, foreign investment bank guarantees riskframework, insurance. supported by protected by theand legal bank guarantees and risk insurance.

Public-private partnership approach Public-private partnership approach

The general approach of the PPP frameworks will be for each partyapproach to have a of defined role. A summary of be The general the PPP frameworks will the listedtobelow. forroles eachisparty have a defined role. A summary of the roles is listed below.will: • Federal Government will: of Agriculture and −• Federal through Government the Federal Ministry Resources (FMA&WR) the planning, −Water through the Federal Ministry play of Agriculture and co-ordination, facilitative and monitoring roles in Water Resources (FMA&WR) play the planning, the overall scheme; co-ordination, facilitative and monitoring roles in the overall scheme; − provide financing for large-scale farming through floating of a N200bn bond; farming through −the provide financing for large-scale the floating of a N200bn − provide subsidy for various bond; inputs as well as effortsasand initiatives; −required providefunding subsidy for research various inputs well as required funding for research efforts and initiatives; − drive the development of new and improved seeds, storage andofprocessing technologies −brood drive stocks, the development new and improved seeds, for propagation to farmers; brood stocks, storage and processing technologies for propagation to farmers; − streamline modalities for co-operatives to benefit this programme. −from streamline modalities for co-operatives to benefit from this programme. • States will: States will: role by funding farm support −• play a financing community settlements −centres, play a financing rolefarm by funding farmand support providing credit to commercial banks and centres, community farm settlements and microfinance institutions for onward lending providing credit to commercial banks and to small and medium-scale farmers; microfinance institutions for onward lending to small and medium-scale farmers; − subsidise the supply of the certified seeds and machinery as tractors, brood −seedlings, subsidisefarm the supply of thesuch certified seeds and seedlings, farm machinery such as tractors, brood

at least two commercial farms each ofsector −ofpromote the development by theforprivate the commodities of chosen at least strategic two commercial farmsthrough for each of facilitation land acquisition, provision of basic the chosenofstrategic commodities through infrastructure, seed and credit for bush clearing and facilitation of land acquisition, provision of basic land preparation.seed Such credit shall converted infrastructure, and credit forbe bush clearingtoand equity for the state Such in thecredit farms.shall be converted to land preparation. equity for the state will: in the farms. • Local governments Local governments will: in providing the basic −• Support state governments in theinrural areas and −infrastructure Support staterequired governments providing the basic farming communities, access roads, infrastructure requiredincluding in the rural areas and power andcommunities, water, marketincluding facilities etc. farming access roads, power and sector water, market • The private will: facilities etc. The privatewith sector will:tiers of government −• Collaborate various finance andwith execute and tiers operate major −toCollaborate various of government programmes andexecute projectsand in these schemes. to finance and operate major These will include farm programmes andsupport projectscentres, in theseirrigation schemes. These systems, fertiliser mechanisation (the tractor will include farmplants, support centres, irrigation programme), abattoirs, livestock markets, (the feedtractor systems, fertiliser plants, mechanisation and premix plants, meat processing equipment, programme), abattoirs, livestock markets, feed extension services etc.meat (Theprocessing private sector includes and premix plants, equipment, commercial banks, micro-finance institutions, extension services etc. (The private sector includes private agribusiness major users of commercial banks,companies, micro-finance institutions, agro-products, construction companies private agribusiness companies, major and usersnonof governmental organisations.) agro-products, construction companies and nongovernmental • Farmers will: organisations.) Farmers will: −• shift from subsistence farming to agribusiness shiftcapitalised from subsistence farming to register agribusiness − −form co-operatives and formally −with formgovernment. capitalised co-operatives and register formally with government. • International donor partners will: International partners will: −• support specificdonor projects. − support specific projects.

Contact Details Contact Details Federal Ministry of Agriculture & Rural Development, PMB Area 11,&Garki, Federal Ministry of 135, Agriculture Rural Abuja, Nigeria Development, PMB 135, Area 11, Garki, Abuja, Tel: +234 9 314 1931 Nigeria Fax: Tel:+234 +23499314 3142532 1931 Emails: asrumah@yahoo.com Fax: +234 9 314 2532 Emails:nfrahq@nfra.org asrumah@yahoo.com nfrahq@nfra.org Commonwealth Ministers Reference Book 2010 l 16312 Commonwealth Ministers Reference Book 2010 l 163

Special Feature: Nigerian Federal Ministry Agriculture & Rural Development Special Feature: Nigerian Federal Ministry of of Agriculture & Rural Development

drying and storage chambers, sorting, grading and packaging facilities, cratesorting, handling and cargo drying and storagestorage chambers, grading and facilities packaging facilities, storage crate handling and cargo facilities • The implementation of a guaranteed minimum price

CREDITS Compiled and edited by Sylvia Powell for Henley Media Group Ltd.