Thursday, January 17, 2019 9:53:56 AM- Nigerian Stock Exchange.



  Baby steps towards Agricultural development

      

11 June 2018 ( Lagos) : Agricultural GDP continues to grow in per head terms but not at the rate required for “lift off”. In 2016 it reached 4.1% and in 2017 3.5%, while over the past eight quarters the highest growth rate has been 4.5% y/y in Q3 2016 and the lowest 3.0% in Q1 2018. The transformation of the sector has been the priority of the current and the previous administration. This journey takes us through agro-processing so we should look for the evidence in agricultural output. It is not conclusive.


Our look at recent developments within the sector should start with the CBN in its development finance role. In this capacity, this role extends from the Agriculture Credit Guarantee Scheme Fund, launched in 1978, to the more recent Nigerian Incentive-based Risk Sharing for Agriculture Lending.

 

A still later initiative from the CBN has been the Anchor Borrowers’ Programme (ABP), formally launched by President Buhari in Kebbi State in November 2015. The programme seeks to create economic linkages between small-scale farmers and large processing operations.


The ABP is said to have been central to dramatic changes in the rice segment. Nigeria used to be the second largest importer of rice globally although there have been positive steps in both growing and milling. The federal minister for information and culture said on 31 May: that imports of paddy decline declined by 90% last year to US$160m; that the number of rice farmers has increased from five to eleven million; and that in 2020 Nigeria will be milling enough rice to meet consumption demand.


In April Deere and Co, the totemic US tractor manufacturer, paired up with a local firm on a scheme for smallholders. It expects that the lease of 300 tractors will benefit as many as 100,000 small farmers in the Niger Delta. The local firm estimates that some farmers will be able to hire vehicles for as little as 20 minutes.


Nigeria’s farming has been among the least mechanized globally. It ranks at no 132 out of 188 countries in the UN Food and Agriculture Organization table for access to tractors.


A NGO partnering Chevron in the Niger Delta has found that 93% of fish feed consumption in 2016 was produced locally. Quality is inconsistent, however.

 

Land ownership remains a serious constraint. The response of Kaduna State has been to invest in satellite imagery, recertify property where necessary and issue land titles. The state government insists that the dramatic improvement in turnaround times for registration has attracted multinational investors.


Source: Source: Gregory Kronsten, Olubunmi Asaolu, and Chinwe Egwim from FBNQuest Capital Limited


Reporting for EasyKobo on Monday, 11 June 2018 from Lagos, Nigeria



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