Agricultural Transformation Agenda:

Repositioning agriculture to drive Nigerias 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

Nigerias imports
Nigerias top 4 food imports *
Measure: Annual food imports in mllions of naira
Wheat
Worlds largest importer
of US hard red and
white winter Wheat

$4bn @
$11m per day

Nigerias 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
Worlds #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 Nigerias 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 Nigerias 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 LGAs
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
9
Federal Ministry of Agriculture and Rural Development
Notore Rebirth of the domestic fertilizer industry

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

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

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.
Presidents 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

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

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,

SMES

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

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)

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

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

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

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

Federal Ministry of Agriculture and Rural Development

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