Federal Ministry of Agriculture and Rural Development | Unlocking the Potential of Agriculture in Sub-Saharan Africa: Nigeria‟s Transformation Agenda for Agriculture Dr. Akinwumi Adesina, PhD (Purdue) Honourable Minister of Agriculture and Rural Development Presented at the Symposium on „Growing food: New places, new technologies‟ Johns Hopkins University School of Advanced International Studies April 17 th 2012 0
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Federal Ministry of Agriculture and Rural Development |
Unlocking the Potential of Agriculture in Sub-Saharan Africa:
Nigeria‟s Transformation Agenda for Agriculture
Dr. Akinwumi Adesina, PhD (Purdue)
Honourable Minister of Agriculture and Rural Development
Presented at the Symposium on „Growing food: New places, new technologies‟
Johns Hopkins University School of Advanced International Studies
April 17th 2012
0
Federal Ministry of Agriculture and Rural Development |
Low Agricultural Productivity is at the heart of
food insecurity in Africa
Source: FAOSTAT (2001)
1961 1966 1971 1976 1981 1986 1991 1996 2010…
0
1
2
3
4
5
6
China S.Asia SS Africa
C
ere
al Y
ield
s t/
ha
Federal Ministry of Agriculture and Rural Development |
Federal Ministry of Agriculture and Rural Development |
Netherlands Vietnam
Japan UK
China France Brazil
USA India
South Africa Cuba Benin
Malawi Ethiopia
Mali Burkina Faso
Nigeria Tanzania
Mozambique Guinea Ghana
Uganda kg/ha
Source: FAOSTAT, July 2003; Norman Borlaug, 2004
0 100 200 300 400
Fertilizer use
per ha in
sub-Saharan
Africa is the
lowest in the
world
500 600
Federal Ministry of Agriculture and Rural Development |
1. Focus was on wheat and rice, which were not major crops
in Africa
2. Africa has a more diverse agro-ecological environment
than Asia
3. While Asia has homogenous irrigated areas, Africa is
dominated by rain-fed agricultural
4. Weak political will in Africa compared to Asia
5. African countries had weaker infrastructure, policies and
institutions to support farmers
Why the green revolution bypassed Africa
Federal Ministry of Agriculture and Rural Development |
New Rice for Africa (NERICA) Africa’s rice imports has risen from 8.5 Billion USD in 1986 to close to
150 Billion USD per year
in 1980-2000 over 200 new varieties of rice were released and
generated annual income of US$ 375-850 Million
High Yielding Cassava Varieties Pro Vitamin A Cassava in Nigeria
To save 1.5 Billion USD in GDP loss to vitamin and mineral deficiencies
Orange Flesh Sweet Potato
Water Efficient Maize for Africa
Drought Tolerant Maize for Africa 20-30% yield increase, Yield stability
Technologies now exist to allow Africa to feed itself
Federal Ministry of Agriculture and Rural Development |
– Biotechnology offers great potential to help feed Africa
– Bt-cotton is growing in West Africa and South Africa
– Successful development and testing of GM maize in Kenya and South Africa,
and GM bananas in Uganda, to address pest and disease complexes
– Challenges that must be overcome for gene revolution
Conventional breeding still holds the best option
Public research institutions are dominant, not private research institutions
Unlike in green revolution in Asia, seeds from gene revolution are
commercial, not public goods (farmers need to be able to reuse seeds)
Limited public-private partnerships for sharing proprietary technologies for
crops of importance for the (Africa Agricultural Technology Foundation)
Weak biosafety regulatory framework in many countries
Environmental and consumer safety issues
The new gene revolution should not bypass Africa
Federal Ministry of Agriculture and Rural Development |
“We must feed ourselves.
I will not suffer the indignity
of begging for food”
Late Dr Bingu wa Mutharika
President of Malawi
African leaders are combining political will with
technologies, markets and institutional support for
farmers
Federal Ministry of Agriculture and Rural Development |
Tipping Point on Hunger in Africa:
Malawi achieves food self sufficiency
2005/06: $50 Million subsidy with Government distribution
2006/07: $60 Million “smart subsidy”
Maize green revolution:
400,000 MT surplus in 2005/06
900,000 MT surplus in 2007
Malawi exported 400,000 MT of
maize to Zimbabwe
Malawi donated 10,000 MT of maize to Lesotho and Swaziland
Federal Ministry of Agriculture and Rural Development |
African Governments’ decided to devote 10% of National
Budget for Agriculture: CAADP Maputo Declaration
Federal Ministry of Agriculture and Rural Development | 10
Federal Ministry of Agriculture and Rural Development |
Nigeria is an untapped potential agricultural power house
Land
Water
Labor
Large Internal Markets
Agricultural
Potential
84 Million Ha of Arable
Land; 40% utilization
279 Billion Cubic
Meters of Surface
Water
Untapped irrigation
potential with 3 of
the 8 major river
systems in Africa.
110 Million Youth in the
work force in 2020
Low wages for
agricultural
intensification
165 Million people,
projected to grow
to 470 Million by
2050
11
Federal Ministry of Agriculture and Rural Development |
Nigeria's lost glory in the world trade of groundnuts
Our former glory in the global trade of
groundnut – Circa 1961
Share of world‟s shelled groundnut exports in 1961*
Measure: % of world trade
Others
Nigeria‟s dominance was eclipsed by China, USA and Argentina
Nigeria
Nigeria‟s export volumes compared to global export volumes for shelled groundnut
1961 – 2008*
Measure: Thousands of metric tons
16%
0%
Nigeria‟s Exports Global Exports
Global market-share trend of shelled groundnut among key producers**
Measure: Percent of global trade of shelled Groundnut
USA
Nigeria
China
Our competitors maintained their
dominance due to strong marketing
organizations that linked the farmers to
markets and hence were able to meet
new strict sanitary and phytosanitary
requirements, particularly for Aflatoxin,
a serious food toxin.
New technologies, Aflasafe, have been
developed in Nigeria by IITA to enable
Nigeria meet the new strict sanitary and
phytosanitary requirements.
Argentina
2008
12
*FAO ** Doreo Analysis, FAO
Federal Ministry of Agriculture and Rural Development |
Nigeria's lost glory in the world trade of palm oil
Our former glory in global trade of palm oil
– Circa 1961
Share of world‟s palm oil exports in 1961*
Measure: % of world trade
Others
Nigeria‟s dominance was eclipsed by Indonesia and Malaysia
Nigeria
Nigeria‟s export volumes compared to global export volumes 1961 – 2008**
Measure: Thousands of metric tons
4%
9%
Nigeria‟s Exports Global Exports
Global market-share trend of palm oil among key producers**
Measure: Percent of global trade of palm oil
Malaysia
Nigeria
Indonesia
While Nigeria declined rapidly, the
industry grew even faster to over 33
Million metric tons.
Our competitors continued to invest in
their agricultural sector R&D to develop
higher yielding varieties and remain
competitive
Malaysia now controls 40% of the
world trade of Oil Palm products valued
at over US$18 Billion
2008
13
*FAO ** Doreo Analysis, FAO
Federal Ministry of Agriculture and Rural Development |
Nigeria's stagnation in the world trade of cocoa
Our former glory in global trade of cocoa –
Circa 1961
Share of world‟s cocoa exports in 1961*
Measure: % of world trade
Others
Nigeria‟s dominance was eclipsed by Indonesia and Cote d„Ivoire
Nigeria
Nigeria‟s export volumes 1961 – 2008*
Measure: Thousands of metric tons
0.4%
Nigeria‟s exports
Global market-share trend of cocoa among key producers***
Measure: Percent of global trade of cocoa
Cote
d„Ivoire
Nigeria
Ghana
While Nigeria‟s production stagnated,
the industry grew to over 2.7 Million MT.
Our competitors maintained their
dominance due to strong marketing
organizations
Our stagnation has meant we have
been unable to benefit fully from rapidly
rising global prices.
Indonesia
2008
*FAO ** Index Mundi *** Doreo Analysis, FAO
Cocoa Bean Price **
Measure : US$ per metric ton
2011 2005 2009 2001 2003 2007
14
Federal Ministry of Agriculture and Rural Development |
Nigeria's lost glory in the world trade of cotton
Our former position in global trade of
cotton – Circa 1961
Share of the world‟s cotton exports in 1961*
Measure: % of world trade
Others
Nigeria‟s dominance was eclipsed by Mali and Burkina Faso
Nigeria
Nigeria‟s export volumes compared to global export volumes 1961 – 2008*
Measure: Thousands of metric tons
2% 1%
Nigeria‟s exports Global exports
Global market-share trend of Cotton among key West African producers **
Measure: Percent of global trade of Cotton
Mali
Nigeria
Burkina
Faso
In 1961, Nigeria was the major West
African cotton exporter , however, its
prominence has been eclipsed by Mali
and Burkina Faso.
Our competitors maintained their
dominance due to strong marketing
organizations, that linked the farmers to
markets and provided support in the
form of improved planting materials and
fertilizer and the ability to meet quality
standards.
2008
15
*FAO **Doreo Analysis, FAO
Federal Ministry of Agriculture and Rural Development |
Need to raise agricultural productivity in Nigeria
Comparison of Nigeria‟s yields across all crops versus
other leading agricultural countries
16
Index of crop yields relative to Nigeria‟s yields in 1961*
Measure: Relative growth in crop yields
Malaysia
Thailand
Annual growth rates
1961 – 2008
3%
Nigeria
1961 2008 1980
Yield per Hectare is the driver of
agricultural competitiveness.
Nigeria's yield per hectare is 20% to
50% of that obtained in similar
developing countries.
Nigeria has one of the lowest usage
rates of agricultural inputs.
Nigeria ranks at the bottom on
agricultural indices Mechanization Intensity: 10 tractors
per 1000 Ha compared to Indonesia
with 241 tractors per 1000 Ha
Irrigation: 0.8% of arable land
irrigated compared to Thailand‟s 28%
of arable land irrigated
Indonesia
Brazil
2%
2.3%
1.6%
1.2%
1990 2000 1970
Nigeria‟s low fertilizer utilization**
Measure: Kg per hectare
Nigeria‟s low utilization of improved
seeds**
Measure: Percent of farmers
* Doreo‟s Analysis, FAO **IFDC
Indonesia lowest in 1961
Federal Ministry of Agriculture and Rural Development | 17
Nigeria Imports over USD$11 Billion in wheat, rice, sugar and fish every year
Sugar
Fish
Wheat
World‟s largest importer
of US hard red and
white winter Wheat
Nigeria‟s top 4 food imports *
Measure: Annual food imports in billions of naira
Nigeria‟s imports
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
the Naira and hurting the economy
Nigeria is importing what it can produce in
abundance.
Import dependency is hurting Nigerian
farmers, displacing local production and
creating rising unemployment.
Import dependency is not acceptable, nor
sustainable fiscally, economically or politically.
Key takeaways
*CBN
Rice
World‟s #2 Importer
Federal Ministry of Agriculture and Rural Development | 18
Agricultural Transformation Action Plan Turning Nigeria from a food importing country to
a self-sufficient and food exporting country
Do
re
o
Federal Ministry of Agriculture and Rural Development |
Significant Growth in Non-oil Exports and Agriculture
Dominates Non-Oil Sector Growth Agriculture consistently 75% of Non Oil Exports
Value of agriculture and other non-oil exports (N Bn)
Source: CBN, FBN Cpital
100150 190 210
2953550
5560
100
2006 2007 2008 2009 2010
Agriculture Sector
Other Non Oil Sectors
19
Federal Ministry of Agriculture and Rural Development | 20
69
52
36
256
99
Potential
2030
Shift to
Higher
Value
Crops
1
Increased
Yield
Increased
Acreage
2010
+159%
Value of Agricultural Sector, constant 2010 US $
(Billions of dollars)
44% 33% 23%
Share of
growth,
%
Current Additional potential
Agriculture‟s potential to grow the economy
Federal Ministry of Agriculture and Rural Development |
Nigeria must become an agriculturally
industrialized economy
We want to modernize the agricultural
sector, raise agricultural productivity,
develop modern food supply chains,
accelerate food processing and value
addition, and achieve economies of scale
in food production and supply to meet the
food needs of Africa's largest population.
While Nigeria is the largest food market,
we are import dependent, so unable to
create jobs, drive markets for locally
produced crops. We have decided to end
this.
Now our goal is "process what we
produce, promote locally produced
foods, make our farmers prosperous
and create jobs". We want prosperity to
grow in our rural areas, as our food
supply chains grow, for local, regional and
export markets.
Key drivers for our transformation
Rapid
Urbanization
Rising
Population
Growth in
Food Demand
Need
to Create Jobs
Post Harvest
Losses
The percentage of the population in
Urban Areas has doubled in 40 years
from 24% to 49%
The Nigerian population has doubled in
the last 30 years from 80 Million in
1982 to 165 Million in 2012, and is
projected to reach 450 Million by 2050
Increased population coupled with
increased meat and fats consumption
driving up food demand.
Over 4 million youths entering the
workforce every year.
50% for vegetables and fruits,
30% for tubers and roots
20% for grains
Federal Ministry of Agriculture and Rural Development |
Our Vision: Grow Nigeria‟s agricultural sector
22
“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 |
Our Vision: Grow Nigeria‟s agricultural sector
23
“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 | 24
New policies, institutions and financing
structures to drive sector growth:
1. Deregulation of seed and fertilizer sectors
2. Marketing reforms to structure markets
3. Innovative financing for agriculture
4. New agricultural investment framework
Do
re
o
Federal Ministry of Agriculture and Rural Development |
Policy reform: Government gets out of direct fertilizer procurement and
distribution and leverages mobile phones to target farmers with farm inputs
Government no longer buys and sells fertilizers and
seeds
Private sector now sell fertilizers and seeds directly to
farmers
Government provides 50% support for seeds & fertilizers
Vouchers and Electronic-Wallets (mobile phones) are
being used to better target subsidized inputs to farmers,
with target of reaching 5 million farmers per year
Banking system is being used to finance input supply:
30 Billion Naira was financed for 2102, using
guarantees, without spending a single Naira of
government funds
Government has liberalized foundation seed production
to private sector to accelerate growth of the seed sector
Establishing a Nigerian Seed Venture Capital Fund.
Goal is to grow the use of hybrid seeds from 8,000
metric tons to 1,000,000 metric tons, per year
25
Federal Ministry of Agriculture and Rural Development |
Marketing Corporations and Commodity Exchanges are being
established to facilitate marketing for agricultural commodities
Leading global examples of
marketing corporations
26
We are establishing MARKETING
CORPORATIONS to coordinate the
production, investments, grades
and standards, market price
stabilization etc. for all value chains
in Nigeria
Marketing Corporations will be
owned by agricultural value chains,
run as private sector led institutions
Agricultural commodity exchange to
improve market access and price
stabilization for farmers
Federal Ministry of Agriculture and Rural Development | 27
NIRSAL : ₦75 billion assets to stimulate lending by banks and other financial players
)
De-risk agriculture
finance value chain
Build long-
term capacity
Institutionalise incentives
for agriculture lending NIRSAL
Objective
Goal
Expand bank
lending in
agricultural
value chains
Risk sharing Facility (₦45B)
Insurance Facility (₦4.5B)
Technical assistance
facility (₦9B)
Bank incentive
mechanism (₦15B)
Agricultural bank rating
scheme (₦1.5B)
Shares lending risks with banks (e.g. 50% loss incurred)
Link insurance products to the loan provided by the banks to loan bene-ficiaries
Build the capacity of banks, micro-finance institutions
Build capacity of agricultural value chains
Expand financial inclusion
Targeted incentives that move banks to a long term, strategic
commitment to agricultural lending
Rate banks according to their effective-ness of lending to agriculture.
New Financing Framework for Agriculture by Central Bank of Nigeria will
unlock $ 3 billion in affordable loans from banks for agricultural value chains
Federal Ministry of Agriculture and Rural Development |
Staple Crop Processing Zones (SCPZ) to drive food processing and
manufacturing industries and infrastructure investments
28
Sample Agro Processing Plant Attract private investors into areas of high food
production to set up food processing plants
Reduce current high levels of post-harvest losses,
add value for increased local content of foods
Link farmers in clusters to food manufacturing plants
Create jobs and drive rapid rural economic growth
Staple Crop Processing Zones will receive Fiscal,
Investment and Infrastructure incentives:
Tax breaks on import of agro-processing
equipments
Tax holidays for food processors
Supportive infrastructure: power, roads,
logistics, storage facilities, cargo airports
Develop Agricultural Investment Code for Nigeria
Federal Ministry of Agriculture and Rural Development |
Target commodity value chains for investments by zones
Adamawa
Akwa
Ibom
Bauchi
Bay
e-
lsa
Benue
Borno
Cross
River
Delta
Ebonyi
Edo
Ekiti
Enugu
FCT1)
Gom
be
Imo
Jigawa
Kaduna
Kano
Katsina
Kebbi
Kogi
Kwara
Lagos
Nasarawa
Niger
Ogun Ondo
Osun
Oyo
Plateau
Rivers
Sokoto
Taraba
Yobe Zamfara
Abia
Ana-
mbra
Cotton, Onion, Tomato and Sorghum +
Rice & Cassava + Livestock & Fisheries NW
Cotton, Onion, Tomato and Sorghum +
Rice & Cassava + Livestock & Fisheries NE
Maize and Soybean + Rice & Cassava +
Livestock & Fisheries NC
Oil Palm and Cocoa + Rice & Cassava+
Livestock & Fisheries SW
Oil Palm and Cocoa + Rice & Cassava +
Livestock & Fisheries
SS Oil Palm and Cocoa + Rice & Cassava +
Livestock & Fisheries
SE
Federal Ministry of Agriculture and Rural Development | 30
Rice Transformation Plan Nigeria to be self sufficient in rice in
four years and become the largest
processor of locally produced rice
in Africa
Do
re
o
Federal Ministry of Agriculture and Rural Development |
Nigeria will replace imported brown rice and finished parboiled rice
with domestic production and milling of rice
31
Annual Brown Rice Supply Options Import vs. Domestic Supply
Measure: Millions Metric Tons
Import Substitution of Parboiled Brown Rice Import Substitution of Parboiled Finished Rice
Imported PB
brown rice
Domestically
produced PB
brown rice
Annual Finished Rice Supply Options Import vs. Domestic Supply
Measure: Millions Metric Tons
Imported
PB Rice
Domestically
Produced PB
Rice
Replace imported brown rice with locally
produced brown rice by 2013.
Replace imported finished rice with locally
produced brown rice by 2015.
Imports will be substituted by stimulating
private sector to invest in rice processing
facilities in areas of high production
Federal Ministry of Agriculture and Rural Development |
Summary of actions to date
32
US investor invests $40 million in rice production and
milling in Taraba State (February 2012)
Expected production of 300,000 MT of rice (15% of
imports) and creation of 15,000 jobs
This will become the largest rice farm in Africa.
Investors rush to produce and mill local rice in Nigeria
Federal Ministry of Agriculture and Rural Development |
Nigeria to have the largest high quality locally produced
rice processing capacity in Africa
33
Investment facility concluded
(February 2012) for 100 large scale
integrated rice processing mills,
with total capacity for 2 million MT
of milled rice, per year
Mills to be owned and operated by
the private sector
Mills to be located across major
rice producing States, with
completion period of 18-24 months
Progress already made
3 new rice processing mills in
Ebonyi, Niger and Kebbi States
with capacity of 90,000 tons of
milled rice have been
completed (February 2012).
Federal Ministry of Agriculture and Rural Development |