How Emefiele Changed The Narrative In Agriculture Sector
Recently the Central Bank of Nigeria (CBN) through its Anchor Borrowers Programme (ABP) unveiled its first rice pyramids in South West Nigeria, specifically in Ekiti State.
The unveiling is a follow up to the one done in Kebbi and Gombe states where the apex bank also unveiled 13 rice pyramids which housed 50kg bags of rice numbering 200,000.
It is not only rice, recently in Katsina State, the bank working with Maize Association of Nigeria (MAAN) also unveiled the first maize pyramid in Nigeria.
These exercises clearly show that Nigeria is on the match towards self sufficiency in food.
This is a clear departure from what the situation was before the present governor of CBN, Mr Godwin Emefiele assumed office in 2014.
As at 2014, Nigeria was spending N1.3 trillion worth of foreign exchange on the importation of food. This was despite the huge investment made in agriculture by the immediate past administration.
That was even an improvement, between 1990 and 2011, Nigeria imported an average of ₦1.923 trillion worth of commodities per annum. In essence, the nation imported about ₦1.0 billion worth of food per day in the period. This was about $9.28 million worth of food per day in the period.
The result reveals that although the country had a positive trade balance (on the aggregate) annual food import bill was in multiples of five times of the export.
At that same time, Nigeria was also spending about $5 billion annually on the importation of textiles, money that would have been ploughed into the development of infrastructure.
A report by the Global Economic Symposium (GES), also suggested a steady rise in prices of rice between 2006 and 2014, which indicated that Nigeria had been consuming more rice than it had been producing.
“When I assumed office, I felt that that was not acceptable,” Emefiele said while justifying his policy thrust in the agricultural sector.
“My immediate question was: can we not produce these ourselves? After all, only a few decades ago, Nigeria was one of the world’s largest producers and exporters of many agricultural products like palm oil, cocoa and groundnuts.”
He said that food importation fueled domestic inflation, depleted foreign reserves, displaced local production and created unemployment.
“With the fast depletion of rice reserve in the country, it was obvious that Nigeria could not afford to sustain rice importation. We all know that import dependency especially on commodities of comparative advantage was neither acceptable nor sustainable.”
It was this stand that informed the establishment of the Anchor Borrowers Programme (ABP), a programme meant to provide farm inputs in kind and cash to small-holder farmers (SHFs) to boost agricultural production which had been neglected through years since Nigeria discovered that huge cash comes from crude oil.
The ABP launched in November 2015 by President Muhammadu Buhari is re-writing the sour narrative on local agriculture.
ABP is a low-interest loan scheme which gives ample room and flexibility for payment. Interest was as low as nine percent but with the advent of the COVID-19, the interest has been adjusted to as low as five percent. The loans are disbursed through any of the Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) and Microfinance Banks (MFBs), all of which the programme recognises as Participating Financial Institutions (PFIs).
Categories of farmers captured under this programme include those cultivating cereals, cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock.
Because of this new push by CBN in the area of agriculture, the nation has witnessed a leverage and quantum leap in agricultural produce. Rice, yam, sundry grains, poultry and livestock among others have enjoyed increased production with some farmers exporting their produce.
With this has also come a significant improvement in the value chain. More and more farmers have upped their game by producing in the farm and processing for the table.
Through the ABP, the CBN governor did not only change the script from the old unimpressive order, he gave force of action to its performance.
The CBN ban on the importations of scores of goods, some of which can be described as low-hanging products for Nigerian entrepreneurs, and Emefiele’s determination to follow the ban through showed the character and the will of a central banker committed to rescuing his local economy from the treacherous vagaries of a globalised marketplace.
So far, according to CBN, the programme has financed over 3.1 million farmers to the tune of over N492 billionfor the cultivation of 3,801,397 hectares across 21 commodities through 23 Participating Financial Institutions in the 36 states of the Federation and FCT, from the inception of the programme till date.
To mitigate against the risk of farmers not being able to pay back the loans, the CBN created the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), which also serves as a micro-finance bank to handle the loan disbursement.
No doubt, the ABP has been of tremendous assistance to farmers which is why those in other crop groups that are not captured in the programme are crying for attention, the problem however, is the implementation which appears to be flawed in some areas.
Commending the efforts of the CBN governor through the anchor borrowers programme, Dr Edwin Uche, National President of Maize Growers, Processors and Marketers Association of Nigeria (MGPMAN), the ABP has given us hope. He noted that the pyramids are simply symbolic and to show that efforts are being made.
According to him, “the pyramids signify a lot depending on how you define it. It tells you the level of efforts being put in place to ensure that maize is grown and that the challenges associated with maize farming is being addressed gradually. It also shows you that the farmers are working hard to support food security in Nigeria.
“It is also to motivate people within the value chain that it is possible to attain self sufficiency in food if we all work together. Yes there are questions about why the pyramids when there is scarcity, of course we have to do the pyramids to show the world that we are doing something to address the scarcity.”
One discernible result, according to operators in the nation’s textile industry, is that in 2019, textile industries had enough supply of cotton produced within the country for their raw materials with some still lying in their warehouses.
CBN’s Director, Development Finance Department, Yila Yusuf, said CBN is trying to bring back the glory of textiles of those days where the industry used to employ 10 million people across the country.
“In the 80s, we lost that glory because of smuggling where our country was turned to a dumping ground of textiles materials.”