Akinwumi Adesina

Federal Ministry of Agriculture and Rural Development |
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
0

Federal Ministry of Agriculture and Rural Development | 1
Nigeria Imports over 1.3 Trillion Naira in wheat, rice, sugar and fish every year
Sugar
Fish
Wheat
Worlds largest importer
of US hard red and
white winter Wheat
Nigerias top 4 food imports *
Measure: Annual food imports in mllions of naira
Nigerias imports

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
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
Worlds #2 Importer
$4bn @
$11m per day
$2bn @
$6m d
Our Vision: Grow Nigerias agricultural sector
2
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

Our Vision: Grow Nigerias agricultural sector
3
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)
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
Government has fully deregulated the fertilizer and seed sector, and
sanitized the fertilizer subsidy program
5
Government Distributed
Private Sector
Fertilizer
Supplier
Federal
Government
State
Government
All Farmers
Private Sector
Fertilizer
Supplier
Targeted
Farmers
Federal
&
State Govt.
Manufacturer/Supplier
gets order from FG
FG has manufacturer
deliver to states per
indent from state at
25% subsidy.
State distributes
fertilizer to farmers
occasionally adding
their own subsidy.
Only 11% of fertilizer
reaches the intended
farmers
States and FG
coordinate to
distribute fertilizer
vouchers to targeted
farmers.
94% of actual
farmers receive the
subsidized fertilizer
under the voucher
program.
Private sector sells
fertilizer to farmers at
market price minus
the fertilizer voucher
discount provided by
government.
Government distributed fertilizer support
program
Private Sector Distributed
Private sector distributed fertilizer
support system, utilizing Input Vouchers
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

Growth Enhancement Support Reached: 880,000 Poor Farmers
Reached Across 97% of Country
6
97% of States
Implemented GES
97% of LGAs
Implemented GES
Success Stories
7
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
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
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.
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
Before Rehabilitation Before Rehabilitation
Successful Foreign Investment in the Nigerian Fertilizer Industry
Notore Rebirth of the domestic fertilizer industry
9
After Rehabilitation
Notore Rebirth of the domestic fertilizer industry
Notore
In Joint Venture with
Mitsubishi, Notore is
expanding its capacity to
over 2.75 Million MT/year

Growth in Production
(Thousands of Metric Tons of Urea)
Mr. President Launches UTC and Butterfield
Commercialized Cassava Bread
- 28
th
of April 2012
Transferring Knowledge Along the Chain
MD of UTC (1
st
Commercial Producer of Cassava Bread) holds training
session with Master Bakers.
High Quality Nigerian Rice: EBONY Rice, Ebonyi
13
Case Study: High Quality Nigerian Rice Rolled Out
Modern rice mill (30,000 MT) begins operations in Ebonyi State
Status
Ministry working with entrepreneur to develop out-grower program and access
additional finance to expand operations.
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

14
Company State
Capacity
MT/Yr Status
Atahi Rice Jigawa 60,000 In Process
Ashi Feeds Benue 10,000 Started Post June 2012
Mikap Benue 10,000 Started Post June 2012
Dominion Taraba 10,000 In Process
Gauri Bauchi 10,000 In Process
Clysters Nasarawa 10,000 In Process
Umza Kano 60,000 New Line Started Post June 2012
Omor Anambra 10,000 In Process
Kare Hi-Tech Zamfara 9,000 In Process
Oni-MP farms Cross River 8,000 In Process
Al-Uma Taraba 8,000 In Process
Ebony Agro Ebonyi 30,000 Started Post June 2012
Lagos Lagos 5,000 Started Post June 2012
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
Land clearing in process, initial planting to begin in Dec 2012.
Massive demand by farmers for new Cocoa Hybrids
New High Yielding Cocoa Hybrids Developed by
Nigerian Scientists Launches a Cocoa Revolution
Do
re
o
Horticulture Transformation
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

Nigerian Agriculture Sector Investment Opportunities
SCPZs are Highly Attractive to Investors
Local and international firms are beginning to engage with the Federal
Government as Anchor investors
14 Staple Crop Processing Zone sites around the Country
Key Takeaways
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.
.

Staple Crop Processing Zones (SCPZ)
14 sites selected across Nigeria for the first set of SCPZs
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)
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,
TOMATO, MANGO)
BENUE NO STRONG COMMITMENT.
POTENTIALLY, DEL MONTE FOODS
3 CALABAR ( PINE-APPLE) CROSS-RIVER DANGOTE GROUP IS THE CORE
INVESTOR
Over $8bn in Commitments from 17 Local and Foreign
Investors Over the Past Year
Adamawa

Akwa
Ibom

Bauchi

Baye-
lsa
Benue
Borno
Cross
River
Delta

Ebonyi

Edo
Ekiti

Enugu
FCT1)
Gomb
e
Imo

J igawa
Kaduna
Kano
Katsina
Kebbi
Kogi
Kwara
Lagos
Nasarawa
Niger
Ogun
Ondo
Osun
Oyo
Plateau

Rivers
Sokoto
Taraba
Yobe Zamfara
Abia
Ana-
mbra
Cassava Starch
& Sweeteners
Livestock
In the Northern
Region
Mechanization &
Training across all
SCPZs
Tomato processing,
Horticulture, Sorghum
Fruit Concentrate
processing
Cassava Starch
and sweeteners
Parboiled
white rice
processing
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

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.

Government incentives to support investors in agriculture

Akinwumi Adesina

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Federal Ministry of Agriculture and Rural Development |

Agricultural Transformation Agenda:

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