Food Security In Nigeria

Food Security in Nigeria: A ticking time bomb November 2012 @l ADATANG VISUAL The World Bank released a report (entitled 'Africa Can Help Feed Africa: Removing Barriers to Regional Trade in Food Staples') stating that hunger threatens 19 millions West African while 400 million hectares of land in the entire Africa region remain uncultivated. Nigeria being the region's economic bellwether and most populated nation on the continent faces stark challenges in its bid to feed a fast growing population and provide food security for the next generation. Past, present & future CAGR 1971-2020 Population: Nigeria Significance of Agriculture in Nigeria... 38% Agriculture, even though a very segmented sector serving basic needs, has been the biggest GDP contributor Agricultural sector has and will continue to represent a large share of GDP growth in the foreseeable future... 162m (2011) 212m (2030) 1971 1981 1991 2001 2011 1980 1990 2000 2010 2020 Specific challenges continue to obstruct the development of the sector... Private sector lending does not correlate with the growth potential of the sector. Nigeria lags behind regional neighbours in the amount of finance it allocates to sector. Given the impending food security threat, agriculture has been an given low investment prority... Not yet mechanized... Tractors per 13.4 Africa 100km2 Destination of Private Sector Lending - Nigeria (%, 2010) West Africa Loans to Agriculture (%, 2010) Other 34 Mali Financial Services 13 Niger Senegal 200 World Gambia Burkina Wholesale & Retail 13 Guinea-Bissau Faso Guinea >10-15 Cropland irrigated (%) 3.6 Africa Nigeria Oil & Gas 12 Sierra Leone Cote 4.9 D'Ivoire Liberia 18.4 Manufacturing 10 Benin World >1-3 Ghana Telcos & Transport Togo Kilograms of fertiliser per hectare 9. Risks associated with agriculture has deterred much needed investment in the sector... Africa Real Estate & Const. Lack of contract enforceability Minimal participation by govt. High incidence of policy summersault Land use act 100 World Public Utilities Agriculture Knowledge gaps in modern agricultural practices Recurring Issues Farmer Investor Consumer Government FEDERAL OF THE NIGERIA Where will I get the money needed to obtain equipment I would like to invest in in the sector but its just too high risk for me... What guarantees do I have on ROI...? Food is becoming more and more expensive. In a country with so much fertile arable land, why do we still import food? Its putting upward pressure on prices. The majority of revenue coming into our coffers is from the oil & and build the vital infrastructure needed to get my crops toO gas sector. There is an urgent need for economic diversification. market? Proposed Solution The creation of two public-private partnership entities that operate across the full spectrum of the agricultural value-chain. Both entities are formed using the PPP framework and operate as profit seeking organisations. The entities will have both equity and debt investors, the Federal Government will provide 100% guarantees to the obligations of these companies through its minority equity stake. BENEFITS The entities are totally creditworthy and bankable | LONG TERM QUICK WINS Structured to attract Market Making Commodity Exchange investment and finance Infrastructure Provider Marketing Company from international and domestic investors Led by private sector participants and the government and the company will provide/lease infrastructure i.e. Iand, machinery and equipment to farm and harvest crops. Buyer of Last resort Engage and supplement existing backward integration schemes Designed to be a Critical Enabler to help the farming estates market and sell the produce, crops and services to interested parties within tdomestic and global food markets Go-between the various stakeholders The exchange is an institution designed I. to help the farming estates, marketing company and domestic and international buyers to facilitate transactions between all parties | The entities will act as a catalyst to revitalize the ailing sector Full integration in the agric value chain from key inputs to processed foods. The creation of a network of farms and Afflilations with foremost research and | estates is to improve efficiency within the input side of the value chain. development institutions e.g. International Institute of Tropical Agriculture | | Selected example of investments made in Agriculture Agriculture Value Added per worker increased by .resulting in a upshot in the China's Agro-economy Grain Distribution and Marketing Project: 1993-2002 Works, upgrading, and equipping of bulk handling facilities for five major grain port terminals 60 intermediate grain depots, about 300 primary grain depots, more than 1,400 bulk rail wagons, over 1,000 bulk trucks, 10 bulk grain vessels Computers and telecommunications equipment for two wholesale/future markets, two training centers, and a grain marketing information center $96 $445n CHINA from US$288 to US$384... increase in aggregate agricultural output from US$98bn to US$143bn Cost = US$991m Addressing potential shortages of staples foods via special investment vehicles, whilst increasing efficient production methods through mechanized solutions is the way forward for Agriculture in Nigeria. Other countries that have turned their agricultural sector into thriving hubs of competitive advantage, acknowledge that is it a long term project which must be coordinated with side-by-side investments in other agricultural schemes and infrastructure such as rail and roads to ensure produce finds its way to the market in immaculate condition. Additionally the government must aid this renaissance with aptly devised policies to protect the embryonic sector from foreign competition. @PATA VISUALI 1 SOURCE: WORLD BANK, BANKER'S COMMITTEE ON AGRIC (NIGERIA), FAOSTAT, IBRD, IHS GLOBAL INSIGHT, MCKINSEY, ERNST & YOUNG NG @BIENG budgfT Infographic designed by: in association with: IDEASI 00 00 REPU ****** ****** PRESIDENT