Category: NEWS & EVENTS

The Nigerian agribusiness investment environment has its strengths, weaknesses, opportunities and threats as shown in the SWOT analysis below:-
SWOT Analysis of Nigeria AgriBiz:
Strengths
Readily available/Competitive Labour
Abundant Fertile Land
Ample Water Resources
Strong Government Support
Weakness
 High Cost of Capital
 Security Challenges
 Weak Infrastructure
Opportunities
 Import Substitution
 Export Potential

Threats
 Cheap Imports
 Trade Barriers

While the government needs to focus on the critical role of providing security and infrastructure, the diaspora can play a vital role in providing a source of cheap investment capital, and much needed technology and expertise due to their long experience in technologically advanced countries of their residence.
The key driver is to maximise the strengths and eliminate the weaknesses in order to improve productivity, efficiency, and produce at globally competitive prices.

It is to be noted that in a globalised world, with international trade and commerce, we cannot escape from the fact that we are competing with far more efficient producers.

The key question at the moment is, despite centuries of farming experience and food production right from pre-colonial Nigeria to date, can we produce at globally competitive prices? e.g Sugar cheaper than Brazil, beef cheaper than Argentina? lamb cheaper than New Zealand. If not, what is the solution? And what is the missing link and what is the plan for bridging the gap?
Diaspora inflow can provide a key component of this missing link, which is cheap capital.

Various estimates put diaspora remittance between $25 billion to $30 billion annually, and this is projected to increase to about $34 billion by 2023 according to Price Waterhouse Cooper. Current estimates show that 70 per cent of the remittance inflow goes to consumption, while only about or less 30 per cent is available for investment.

The 30 per cent available for investment can be significantly increased if there is a secured investment platform that can be trusted by the diaspora community. A secure investment platform can provide the confidence required for the diaspora community to invest rather than saving funds in diaspora banks.

This secure investment platform should be open, transparent, flexible and regulated by the government. Additionally, the government can look into the possibility of providing some guarantees for this investment.
Some of the policies and programs currently in place to help incentivise investment that can be leveraged on by the diaspora community are as follows:-
1. Up to 58 per cent (about 47 million hectares) of fertile arable land available for agricultural production. Land can be obtained on a long term lease (99 years).
2. Immense opportunities in the livestock sector (beef, dairy, poultry, fisheries)
3. Subsidy on critical inputs like fertilizer, seedlings and pesticides.
4. Income tax relief for targeted agricultural investment.
5. Reduced Import Duty (custom, excise and value-added) for import of agricultural equipment and agro-processing equipment.
6. Exemption of interest from tax on loans granted to agricultural activities.
7. Exemption from Value Added Tax (VAT).
8. Access to Agricultural Credit Guarantee Scheme up to 75 per cent.
9. Avoidance of double taxation agreement, which eliminates double taxation with respect to income and capital gains.
10. Investment promotion and protection agreement provides reciprocal baseline protections for investments.
11. Africa Growth and Opportunity Act (AGOA), which allows the export of produce to the United States.
12. ECOWAS Protocol on Free movement of goods and services
13. Upcoming Africa Continental Free Agreement.
Going forward, a secure platform is required in order to properly channel the investment inflow, the proposed diaspora investment fund stewarded by NIDCOM is a good step in the right direction. Any such platform should provide proper regulation, transparency, flexibility to choose between investments, and it must be private sector driven.
Specifically for agriculture, because of its immense importance in food security, job creation prospects, and import substitution to save scare FOREX, the initiative has to be bold, long term and transformative. Towards this end, a Diaspora Agriculture Investment fund of $ 5 billion can be targeted.
Farm mechanisation, use of Best Available Technology (BAT), International Best Practices are urgently required to improve efficiency and farm productivity at all levels.

Various estimates show that Nigeria needs around 5,000 to 7,000 tractors per annum for at least 10 years in order to meet our Tractorisation needs. Local assembly/production of tractors will play a vital role towards achieving this target. Better technologies for soil fertility mapping, weather prediction, crop health monitoring, etc are required to complement existing systems.
Apart from the upstream farming activities, storage, cold rooms, transport of farm produce, processing, preservation, grading and standardisation are all required in order to complete the efficiency circle.

The hundreds of millions of dollars being poured into various agricultural schemes can be pooled together with diaspora investment funds in a 50:50 equity to provide long term financing for sustainable agriculture to support the lifting of 100 million Nigerians from poverty, increase socio-economic activity, reduce youth restiveness, provide food security and foreign exchange through export of agricultural produce to Europe, Asia, the Middle East and Americas.

Santuraki presented this paper at the 3rd Diaspora Investment Summit, November 2020. He writes from Doha, Qatar. Santuraki2000@yahoo.com

The war against Boko Haram has been going on for over 11 years now.

The result of this prolonged conflict is loss of over 50,000 lives, displacement of over 3 million people, and destruction of infrastructure, businesses, loss of livelihoods etc.

The North East region was already one of the poorest in the country even before the crises.

With such a protracted and devastating conflict, the socio-economic situation has become even worse, driving its people further into poverty and economic degradation.

Lately, in addition to the Boko Haram crises, there is an upsurge in armed banditry, kidnapping, cattle rustling and communal clashes, which are all lagging indicators to the overall health and wellbeing of the economy.

The United Nations recently reported that about 4.3 million people were facing hunger and food insecurity in the North East.

The UN mentioned that the resurgence of violence is threatening to reverse the gains that were achieved.

At least 10.6 million people need our assistance to survive, the United Nations Humanitarian Coordinator said.

While I was writing this article, the governors of the North East met for the 2nd time in an impressive show of regional solidarity.

They issued a communique with an 11-point resolution which highlighted their concerns and recommendations for some of the critical issues facing the region.

First, the number of boots on the ground needs to be significantly increased.

The Nigerian Armed Forces seem to be overstretched, fighting multiple battles at the same time.

My own suggestion is to set up a regional security outfit or a national guard with men and officers recruited from the six states of the North East to work in reinforcing and complementing the efforts of the current gallantry efforts of the Nigerian Armed Forces.

Secondly, there’s need for more intelligence gathering, use of technologies and state of the art surveillance tools to provide real time authentic, and actionable intelligence to the troops.

Thirdly, there is an urgent need to deploy advanced and sophisticated weaponry.

The performance of the personnel on ground can only be as good as the quality and sophistication of weaponry at their disposal.

As President Buhari mentioned, some equipment has started arriving while some are on their way.

Equally important to the availability of sophisticated weaponry, is the morale and welfare of the gallant troops at the battlefront.

Their sacrifices and services to the country need to be rewarded with excellent welfare packages commensurate with the risk and efforts they are putting in.

Additionally, an endowment fund should be set up to take care of families of the fallen soldiers.

Fourthly, there’s need to be more cooperative and engaged with key stakeholders, the community and their leaders, political, religious and traditional.

A situation where stakeholders/political leaders are seen repeatedly in open disagreement with the military is not helpful for the war effort.

On the economic front, combination of the prolonged crises, fall in oil prices and the impact of COVID-19 all have made the financial situation of these states very pathetic.

Therefore, a massive economic recovery programme is urgently required.

The plan should include an ambitious target to achieve certain milestones over a period of four years.

The following key sectorial intervention areas are recommended:

A- Setting up of industrial complexes in each senatorial zone of the six states of the region.

The complexes should utilise locally available raw materials.

Industrial complexes are engines of growth and have been the secret of success for many economies like Singapore, Malaysia, Japan and South Korea.

B- Aggressive land development: Target to open up and develop 1.2 million hectares of land (200,000 per state) to provide massive employment and food security.

Each state to target cultivation of 2-3 crops where they have comparative advantage with a plan for all year-round crop cultivation.

C- Setting up of agricultural produce centres in each local government of the six states.

These centres to work closely with farmers, and other grass root level producers to collect, sort, grade and aggregate raw materials that will serve as feedstock to the industries in the industrial zones.

D- Livestock Clusters to raise and produce livestock like cattle, sheep, goats, pigs, chicken etc. along with associated industries e.g. milk/diary, meat, eggs, leather etc.

The livestock clusters to include feedlots, feed mills, abattoirs, milk and dairy production, meat canning, fish smoking, tanneries, and leather industries etc.

E- Setting up solid mineral centres in senatorial zones where solid minerals are found in commercial quantities.

These centres will collect, weigh, test, grade, polish, cut and package solid minerals and precious stones such as gold, tantalite, aquamarine, and sapphire.

The centres can also produce building materials like tiles, marbles, aggregates, stone base and gravels for construction.

F- Massive planting of economic trees to fight draught and desertification, generate revenue from cash crops and provide employment.

Target 1 million trees per state.

G- Education: Target zero out of school children.

Some estimates suggest that about 70% of the estimated 13 million out of school children in Nigeria are from the region.

Building new schools using locally available building materials can aid economic recovery.

Teaching can also provide job opportunities to graduates within the region.

H- Healthcare: Health is wealth, and there will be no meaningful development without sustainable healthcare.

Restoring normal life, economic activity and security in the North East to pre-conflict levels requires a lot of planning, work, commitment and dedicated support from all stakeholders from the region and beyond.

The people of the North East certainly do not want to mark another 10-years anniversary.

It is high time to set some targets to completely end the crises, return IDPs to their communities, and restore normal economic activities.

The governors of the North East have set the ball rolling, so keeping focus on the goals and ensuring the objectives of the mission are achieved should remain the focus in the short term.

Muhammed Santuraki writes from Doha, Qatar & can be reached at Santuraki2000@yahoo.com

he President recently launched an ambitious programme of lifting 100 million Nigerians out of poverty.

The revitalisation of the RBDA’s to their full potential provides the best and quickest way to attain this objective. Doing this will: (a) Boost production and national food security; (b) Create massive employment and grass root empowerment; (c) Provide Import substitution and significant FOREX saving; (d) Mitigate farmer-herder clashes; (e) Curtail youth restiveness, armed banditry and kidnapping; (f) Generate FOREX.

Nigeria is no doubt blessed with abundant natural and human resources; millions of hectares of fertile arable land, heavily carpeted by the impressive Savannah grassland to the north; ample water resources as traversed by two major Rivers, Benue to the east and Niger to the west, along with their numerous tributaries meandering through the lush green vegetation, with fertile alluvial soil on each side of the river banks, and lastly capped by the mighty Lake Chad to the far North East.

These inherent natural resources together with a warm, tropical climate provides an ideal combination for the production of almost all kinds of food and cash crops, fisheries, aquaculture, and animal husbandry. With the above in mind, Nigeria is literally sitting on a Gold mine, ‘Green gold’ whose agro potential can match Brazil, Argentina and Australia.

In order to utilise these abundant agrarian and water resources for productive agricultural ventures, and address draught and desertification, the federal government initially set up three River Basin Development Authorities in the north in the early 70s. These were later increased to eleven by RBDA decree of 1976 to cover the whole country. Among others, their functions include the following: (a) To undertake a comprehensive development of both surface and ground water resources for multi-purpose use; (b) To undertake schemes for the control of floods and erosion and for water-shed management; (c) To construct and maintain dams, dykes, polders, wells, bore-holes, irrigation, drainage systems and other necessary works; (d) To develop irrigation schemes for the production of crops and livestock and to lease the irrigated areas to farmers or recognised associations in the locality for a fee; (e) To provide water from reservoirs, wells and bore-holes for urban and rural water supply schemes on request by the state government.

With this mandate and armed with enough resources and political will, the RBDAs developed huge infrastructure and set up impressive large scale commercial agricultural production schemes which were fully mechanised and integrated; agro industrial complexes, and the largest in Sub-Saharan Africa at its peak.

The golden days of the flourishing agro industrial era under the RBDAs were to be short lived.

The onset of the military intervention in the 80s came with frequent changes in government, and hence constant changes of policies, culminating with decree No.35 of 1987 which required the RBDAs to relinquish all non-water assets and concentrate on the provision and maintenance of water resource facilities such as dams.

This singular act was the straw that broke the camel’s back. The water resources and their associated infrastructure were effectively de-coupled from the farming activities; the natural linkage that provided the productive synergy was broken. The RBDAs lost policy support, funding, expertise, and were subsequently asked to auction all plant and machinery. With drastic cost cutting, some of their projects were abruptly wound down; huge farms with enormous infrastructure became redundant. The collapse of the RBDAs came with attendant loss in massive agricultural production, expertise and thousands of jobs.

Several attempts were made to revitalise them through the Water Resources Master Plans. The first Master Plan was developed in 1995 with the support of JICA. This was revised in 2013 to have a long-term sector development plan up to 2030.

The plan envisaged that by the year 2020, a target area of 1.5 million hectares would be irrigated, provision of safe water supply at 80 percent of the then projected population of 186,000,000 people.

Another attempt was made by the current administration called “Water Resources Roadmap (2016-2030)”. The emphasis once again was the development and implementation of a National Irrigation Development Programme (2016-2030) to boost food production, identification of dams with Hydro Electric Power Potential for Development. Development and implementation of a National Water Supply and Sanitation Programme to attain the Sustainable Development Goals (SDG 6), Development of a Blueprint to Strengthen the River Basin Development Authorities as enablers for food security and socio-economic development.

As of today, these ambitious plans still remain largely on paper and a pipe dream. Total actual irrigated area is still less than 100,000 hectares as against the target of 1.5 million by 2020.

The RBDAs are still mostly idle, with many abandoned sites, dilapidated machinery, large dams, infrastructure and facilities wasting away.

Majority of our agriculture still remains in the hands of the peasant farmers, labour intensive, inefficient and largely dependent on rainfall, with climate change and shifting weather patterns, when the rain fails, the crop fails.

In all these plans and strategies, the missing link is the absence of full integration to make these projects financially viable. Urgently required is adequate funding to rehabilitate, upgrade and re-equip the RBDAs. Equally important is restoring their former mandate, provision of water and farming/fishing, along with onsite processing and packaging.

Each of the RBDAs can specialise in a specific activity or at most 3 activities, and pairing them up with large scale downstream producers that have decades of proven expertise e.g. Friesland Campina (Wamco), Nestle, Flour mills of Nigeria etc. I have attempted to provide some pointers below:

Lake Chad Basin/Baga Area – Fish farming, processing and packaging.

Dadin Kowa Dam – Animal husbandry, production of meat, milk, hides and skin

Bakalori Dam – Rice production, processing and packaging.

Gurara Dam – Production, processing and packaging of fruits and vegetables.

Lake Chad Basin– Production and processing of Wheat, Maize flour, edible oils etc.

Attaining the President’s vision of lifting 100million out of poverty is possible with the right strategy and political will.

Muhammed Santuraki writes from Doha, Qatar.
Santuraki2000@yahoo.com