Leadership: Agriculture Will Lead Nigeria’s Economy In 2015

We are confident, as we enter 2015, looking forward through the benefit of hindsight, that this is the dawn of a new day for Nigeria as the federal government has put the private sector at the center piece of the Agricultural Transformation Agenda (ATA), leading to a major boost to agriculture. Since the Agribusiness and Investments (A&I) Unit of the Federal Ministry of Agriculture and Rural Development (FMARD) was established mid-2012, perception of agriculture has changed significantly from being just an activity or a way of life to that of business.

Agribusiness and Investment unit of the ministry, established with the ultimate aim of becoming a customer-oriented, one-stop-shop business centre of excellence, catering to the needs of the agribusiness private sector, has vigorously pursued some goals which are hereby outlined.

It was to build strategic relationships with the private sector and drive increased investments in Nigeria’s agricultural sector. It was saddled with the responsibility of working with relevant stakeholders to promote the attractiveness of agriculture as a lucrative business for private sector stakeholders. It was to provide business, investment, and financing support services to the private sector and FMARD teams.

It was to provide support for consumer market and new product development for market sustainability and engage in food science and technology transfers within agricultural value chains. It was also to support new institutions and policy reforms to ensure successful establishment of new agribusinesses, new markets, new products and new technologies in the manufacturing, packaging and distribution of food products.

Objective and keen observers would attest to the fact that the outlook has changed from grim to glee since 2012 and the notice has become noticeable locally and internationally. Do we begin with local and foreign direct investments, or simply the greater interest and commitment of the financial institutions from within and outside the country?

Specific and notable achievements are visible. With the execution of a ‘government-enabled, private sector-driven’ transformation agenda that ensures that agriculture is being treated as a straight-line business, and not a development project, the A&I Unit has set in motion a private sector agenda in the agricultural sector. Up to the end of 2014, the private sector continued to make extensive commitments to existing and planned investments in Nigeria’s agriculture, agribusiness and food industry resulting in financial returns, job and wealth creation in the sector.

To date, over $8 billion in executed Letter of Intent (LOI) from over 30 private sector companies have been attracted into the agricultural sector. These include current and planned agribusiness investment plans in Nigeria over the next 3 to 5 years. There has been a renewed interest and excitement among various stakeholders about the opportunities in investing in the sector.

Attention of global investors has been focused on Nigeria’s agricultural sector and the attendant sectoral transformation agenda. The A & I Unit, however, relentlessly continues to actively engage in efforts to attract and sustain more investments that will positively transform the face of agriculture in Nigeria. The hosting of World Economic Forum (WEF) in Abuja in May 2014, brought out key issues of relevance of agriculture in the unfolding economic development of Nigeria.

During WEF, no fewer than two major investment opportunities took the centre-stage during the WEF side events at the forum. The Staple Crop Processing Zones (SCPZ) and the Partnership for High Energy Nutritious Foods opened great vistas for investment in Nigeria’s growing agribusiness landscape. Foreign and local organisations showed their interests, beginning a new order for agribusiness investments that can take advantage of expanding prospects in Nigeria. For once, Nigeria has started to launch back on to the global stage in agriculture.

It is clear that there are notable and specific areas in which agricultural transformation has brought landmark achievements in agribusiness. For instance, over $8 billion of private sector signed Letters of Intent (LOI) were received from domestic and multinational agribusinesses, committing to investments in agribusinesses in Nigeria. This development alone is a sign of growing confidence in Nigeria as a place to do business, particularly in the agricultural sector. It shows that so much more should be expected in years ahead.

The developed new strategic partnerships to drive agribusiness investments in the SCPZs, as well as drive financing for the development of the SCPZs is another key achievement worth alluding to. Now, agribusiness will attract a lot of development to rural areas where the clusters called SCPZs will be established and operated. The infrastructural development will in turn boost further agribusiness investment, while reducing the cost of business for investors within the framework of the SCPZs.

The Nigerian Economic Summit Group (NESG) has been doing annual summits until 2013 when, for the first time, it devoted its summit solely to agriculture. That year’s summit was hailed, nationwide, as the most successful Summit in its 20-year history! It could easily be described as exceptional as it drew stakeholders from various aspects of agriculture and encouraged robust discussions on key issues that could reposition Nigeria’s agriculture as a key driver of the economy. Little did it appear to many at that time that the oil fortune could plunge so precipitously in another one year after, leaving agriculture to be a sector to look forward to in our nation’s attempt to boost the economy.

The importance of funding to agriculture in Nigeria began to become clear as commercial banks began to show some confidence by lending to agricultural projects of private agribusiness investors. Under the Growth Enhancement Support, alone, no fewer than 14 commercial banks became lenders to input suppliers under the arrangement. The A & I unit successfully designed and managed the establishment process of Fund for Agricultural Financing in Nigeria (FAFIN), an intervention that was launched on December 16, 2014. In addition, the unit initiated and facilitated the entry of the Nigerian Sovereign Investment Authority (NSIA) as a co-investor in FAFIN with a $10 million commitment.

One of the things that hallmarked the 2014 was that several meetings were held, with the Honourable Minister, Dr. Akinwumi Adesina, personally presiding, to steer the direction and purposes, which ensured quick decision-making and FMARD commitments, to the benefit of the private sector. The A & I unit enhanced the credibility of the FMARD among private sector as a superior resource in agribusiness development.

Foreign companies saw through the rising profile and prospects of agricultural sector and came calling. One of them is Blumberg Grain; its total investment is estimated at about US $250 million. The project is on fast track implementation timeframe. The contribution of the unit to the first-ever piloting of an electronic warehouse receipt system with government assets, through a public private partnership was notable. The ministry has proved that so much could be done in the right direction to move the sector forward, with the private sector at the forefront. In Kebbi State, farmers experienced firsthand keys to extension of onion shelf life, including varieties, harvesting method, storage conditions (temperature and humidity control) and packaging.

Stakeholders were brought together to successfully launch the Nigerian Agribusiness Group (NABG) and the leadership group (ELG). NABG has taken off, and has assumed a life of its own, giving direction to stakeholders in various aspects of agribusiness today.

Beyond the shores of Nigeria, the Ministry has convened stakeholders’ meetings in both Nigeria and Kenya and has successfully launched the Nigeria-Kenya Agribusiness Partnership Forum, which took place in Nairobi in September 2014.

Bloomberg: Nigeria’s Jonathan Sees Stable Economy, Strong Naira in 2015

Nigerian President Goodluck Jonathansaid the West African nation will keep its currency strong and its economy stable in 2015 as it seeks to boost investor confidence following a downturn in oil prices.

The government will “take away speculative behaviors’ and maintain ‘‘healthy’’ external reserves to ‘‘ensure the naira remains strong,’’ Jonathan said today in a national broadcast to mark the new year. That will ‘‘give foreign investors the clarity and certainty that they need,’’ he said.

The 2015 budget contains measures to guarantee economic stability and ‘‘ensure that the downturn in the price of oil does not affect our development plans too adversely,’’ he said. Oil accounts for 70 percent of Nigeria’s income and 95 percent of its foreign exchange.

Nigeria is struggling to curb currency volatility that led to a 12.6 percent retreat last year, as oil prices lost almost half their value in the biggest annual decline since the 2008 global financial crisis. Finance Minister Ngozi Okonjo-Iweala proposed cutting this year’s budget by 8 percent to 4.36 trillion naira ($23.6 billion) while the government will seek to strengthen tax collection, raise taxes on luxury items and alcohol, and diversify the economy.

The 2015 budget ‘‘is targeted at deepening our efforts at becoming a non-oil economy,” and attract foreign direct investment, Jonathan said.

The president, who faces a re-election challenge in February amid an Islamist insurgency, said security agencies will be bolstered to ensure the balloting is peaceful.

Boko Haram militants who have killed thousands of people over the past five years in their bid to impose Islamic law in Africa’s biggest economy “will be defeated,” Jonathan said. “We are re-equipping our armed forces to win the war against terror.”