It is laudable that the African Development Bank (AfDB) will grant a $2.7billion budget support loan to the federal government. The bank has also approved $134million fund for emergency food production across the country. The AfDB massive support at this period of serious economic challenges is commendable. The President of AfDB, Dr. Akinwunmi Adesina, who disclosed this to newsmen in Nigeria, revealed that talks are ongoing with the federal government to finalise $1.7billion economic and budget loan, as well as the launch of a $1billion agro-industrial processing zones in 28 states.
There is no doubt that Nigeria’s economy is in distress, regardless of government’s recent denial to that effect. With unprecedented hike in food prices and over 35 per cent food inflation rate, the aggressive diversification of the agricultural sector has become imperative. Instructively, the AfDB and its partners will finance the expansion of the Special Agro-Industrial Processing Zones (SAPZ) programme in Nigeria. It must not be allowed to fail. Last year, the bank committed $1billion in agro-industrial processing in the 28 states. The affected states were required to contribute small counterpart funding for the programme. SAPZ is the flagship of the AfDB initiative and private sector action plan aimed at quickening the transformation of the Nigeria’s agro sector value chain through industrialisation.
Another AfDB’s agricultural intervention in the country will expectedly yield about 5 million metric tons of wheat, rice, cassava. AfDB says it is concerned about the present hardship and determined to collaborate with the government to find solutions to the challenges. It is good that the AfDB has supported the cultivation of arable land in parts of the country to boost food production and reduce hunger. This includes the cultivation of 118,000 hectares of wheat, 150,000 hectares of maize production. It will also support Nigeria to cultivate 300,000 hectares of rice, 300,000 hectares of maize, 150,000 hectares of cassava, and 50,000 hectares of soya beans. More metric tons of wheat are planned for cultivation before the end of the year.
According to a recent report by the Food and Agricultural Organisation(FAO), Nigeria has 70.8 million hectares of agriculture land areas for the cultivation of maize, cassava, guinea corn, yam, beans, millet and rice. But insecurity has hindered the cultivation of these arable lands. Government must address the current insecurity that is worsening every day.
Under the present financial plan, AfDB will drive the implementation of the scheme to support inclusive and sustainable agro-industrial development in selected states of the country. The programme will enhance the production of agricultural products. During Phase 1 of the programme launched in 2022, AfDB and its partners provided $538 million to finance key projects in Nigeria. Of this amount, the bank provided the sum of $210 million, while $310 million came from the Islamic Development Bank and the International Fund for Agricultural Development (IFAD), while the federal government’s contributed $ 18.05million.
The AfDB loan as well as the $134 million for food emergency production can ameliorate the present acute food shortage and reduce prices of staple foods. The AfDB President has decried the high level of hunger in Nigeria, a country endowed with more than 34 million hectares of arable land, rivers and dams, and rich diverse agro ecology. Tackling the rising food inflation requires looking critically at some structural drivers of food inflation, and soaring cost of living.
Also, the AfDB boss reminded the monetary authority that dealing with food price inflation is not through the standard macro-economic policy of tightening money supply as CBN did recently when it raised the monetary policy rate( MPR) by 400 basis points to 22.5 per cent, the highest in many decades. While the monetary authority should take note of this, we suggest that in tackling the present food insecurity and increase food production, government should look at the option that had worked in the past, that is, the electronic wallet system in which seeds and fertilizers are channeled to farmers directly via their mobile phone through their electronic vouchers. This was achieved during the administration of Goodluck Jonathan when Adesina was the Minister of Agriculture. For the agric food emergency loans support to succeed, the AfDB should monitor the implementation of the programme. Without adequate monitoring, the programme may not succeed. Therefore, AfDB must ensure that the infrastructure needed to expand the agro-industrial processing are in place, and that essential infrastructure like power, water, roads and other logistics are not lacking in the selected zones. No doubt, economic diversification through agriculture is essential for food security and general turnaround of the economy.
Although the establishment of the National Food Security Council in 2018 was aimed at addressing food insecurity, strengthening the necessary policy frameworks was not done. While AfDB is poised to boost economic growth in Nigeria, the federal and state governments should complement the effort. It is time to critically address the challenges that hamper food production. To revamp the economy, the agric sector must receive huge investments.