While the South African agriculture plans to finalise its Agriculture and Agro-processing Master Plan in the first quarter of 2022, Africa’s most populous nation, Nigeria, has set its target on agricultural expansion.
Just recently, the African Development Bank’s (AfDB) Board of Directors approved a $210 million loan to Nigeria, to co-finance Phase 1 of the Nigeria Special Agro-Industrial Processing Zone Program.
“The program will help to unlock Nigeria’s agriculture sector potential. It will promote industrialization through the development of strategic crops and livestock,” said the AfDB.
Nigeria has 80% of smallholder farmers, who account for more than 90% of the country’s agricultural produce. The loan comes at period when the Federal government was implementing its ‘master plan’ called Special Agro-Industrial Processing Zones (SAPZ) to ‘concentrate agro processing activities.’
“The SAPZs are aimed at boosting productivity, integrating production and enhancing the processing and exporting of select commodities,” said PwC Nigeria Associate Director, Taiwo Oyaniran.
At the recent Future Investment Initiative Summit in Riyadh, prior to the approval of the loan, Nigeria’s President Muhammadu Buhari told world leaders that his country had made several million hectares of arable land available to smallholder farmers, largely driven by the Special Agriculture Processing Zones program across the country.
The establishment of the Special Agriculture Processing Zones is uniquely similar to South Africa’s Agri Parks, a program once touted to resolve all market access challenges for smallholder farmers. Buhari’s government has seemingly come to terms that the development of its food industry relied on the availability of land to smallholder farmers matched by government support, similar to First World Countries.
According to the PwC Nigeria, this plan comes hot on the heels of protecting local producers and smallholder farmers, by placing trade barriers on selected agricultural products, in order stimulate growth its agricultural sector.
In 2019, Nigeria banned imports on poultry, pork, beef, eggs, refined vegetable oil and fat, spaghetti, sugar and fruit juice, sugar cane in order to enhance the country’s export capacities and competitiveness.
Hinged against its spent on imported food items (N22.8 trillion), representing “more than half (56.7%) of the total household expenditure of N40.2 trillion,” it was more than convincing to look into protectionists rules.
“The share of agriculture in Nigeria’s total export earnings remains small compared to crude oil exports. For instance, in the same period, agriculture accounted for less than 2% of total exports relative to crude oil (76.5%),” said Oyaniran.
Furthermore, the US International Trade Commission had augmented that Nigeria relied on ‘$10 billion of imports to meet its food and agricultural production shortfalls (mostly wheat, rice, poultry, fish, food services, and consumer-oriented foods) with South Africa counted as one of the major sources of agricultural imports.
Reprioritising its smallholder farmers – responsible for more than 36% of the labour force of the country – Nigeria roped the support of its banking sector to push for the finance of the plan.
“Phase 1 of the Nigeria Special Agro-Industrial Processing Zones Program will mobilize private sector investment in the agro-industrial hubs and agricultural transformation centers. It will impact some 1.5 million households as direct beneficiaries, with a target of creating 400,000 direct jobs and up to 1.6 million indirect jobs,” added the Director General of the Bank’s Nigeria Country Office, Lamin Barrow.
AfDB support loan for Nigeria’s Special Agro-Industrial Processing Zones Program is partly motivated by the social cohesion mantra – government-enabled and private sector led.
“That is the critical way in which you have structural transformation of agriculture. It is impressive to see a strong commitment from the Nigerian government – a very strong commitment from the Nigerian Minister of Finance and from all of the state governments because they have to give the land, they make sure that all the regulations and incentives are provided” said AfDB Group President Dr Akinwumi A. Adesina.
With this expansion plan, Nigeria is set to drive and stimulate economic growth in cocoa, rice, cassava, beef and dairy livestock, tomato, maize, groundnuts, cassava, soyabean and ginger to supply and feed its more 200 million population including its food sector.
