AgriculturalExpenditures:BudgetTracking/InvestmentAnalysisofAgriculturalSectorinNigeria(20002008)

REPORT SUBMITTED TO

VOICES FOR FOOD SECURITY

by

Civil Society Coalition for Poverty Eradication CISCOPE

[UjahOliverChineduandDomOkoro]

November 2009

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AbbreviationsandAcronymsACCOMEX AgriculturalCommodityExchangeMarketACGS AgriculturalCreditGuaranteeSchemeACGSF AgriculturalCreditGuaranteeSchemeFundACSS AgriculturalCreditSupportSchemeAfDB AfricanDevelopmentBankAPSF AgriculturalPolicySupportFacilityBOF BudgetOfficeoftheFederationCAADP ComprehensiveAfricaAgricultureDevelopmentProgrammeCACS CommercialAgricultureCreditSchemeCBN CentralBankofNigeriaCBGA CentreforBudgetandGovernanceAccountabilityCBOs CommunityBasedOrganizationsCDD CentreforDemocracyandDevelopmentCIC CentralImplementationCommitteeCIDA CanadianInternationalDevelopmentAgencyCISCOPE CivilSocietyCoalitionforPovertyEradicationCOFOG ClassificationofFunctionsofGovernmentCWIQ CoreWelfareIndicatorsQuestionnaireDARPS DevelopingAgriculturalPolicyandRegulatorySystemDFA DirectorFinanceandAccountsDF&A DepartmentofFinanceandAccountsDFID UKDepartmentforInternationalDevelopmentDMBs DepositMoneyBanksDMO DebtManagementOfficeEU EuropeanUnionFAO FoodandAgricultureOrganizationoftheUnitedNationsFCT FederalCapitalTerritoryFEAP FamilyEconomicAdvancementProgrammeFGN FederalGovernmentofNigeriaFIRS FederalInlandRevenueServiceFMA&WR FederalMinistryofAgricultureandWaterResourcesFMF FederalMinistryofFinanceGDP GrossDomesticProductHa Hectare(s)IBRD/WB InternationalBankforReconstructionandDevelopment/TheWorldBankICTs InformationandCommunicationsTechnologiesIDP InterestDrawbackprogrammeIFAD InternationalFundforAgriculturalDevelopmentIFPRI InternationalFoodPolicyResearchInstituteITCZ InterTropicalConvergenceZoneMARKETS MaximizingAgriculturalRevenueinKeyEnterprisesMCF MicroCreditFundMDA(s) Ministries,DepartmentsandAgenciesMDGs MillenniumDevelopmentGoalsMDPT MinisterialDueProcessTeamMFBs MicrofinanceBanksMFIs MicrofinanceInstitutionsMt Metricton(s)

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MTEF MediumTermExpenditureFrameworkMTSS MediumTermSectorStrategiesNACB NigerianAgriculturalandCooperativeBankNACRDB NigerianAgriculturalCooperativeandRuralDevelopmentBankNAIC NigerianAgriculturalInsuranceCorporationNAIS NigerianAgricuturalInsuranceSchemeNAPEP NationalPovertyEradicationProgrammeNBS NationalBureauofStatisticsNDE NationalDirectorateofEmploymentNEEDS NationalEconomicEmpowermentandDevelopmentStrategyNEPAD NewPartnershipforAfricasDevelopmentNFRA NationalFoodReserveAgencyNFSP NationalFoodSecurityProgrammeNGOs NonGovernmentalOrganizationsNNPC NigerianNationalPetroleumCorporationNPC NationalPlanningCommissionNSPFS NationalSpecialProgrammeforFoodSecurityODA OfficialDevelopmentAssistancePARP PolicyAnalysisandResearchProjectPAT ProfitAfterTaxPBN PeoplesBankofNigeriaPEFA PublicExpenditureandFinancialAccountabilityPMC ProjectManagementCommitteePPP PublicPrivatePartnershipRAISE RaisingAgriculturalIncomewithSustainableEnvironmentRBDAs RiverBasinDevelopmentAuthoritiesRUFIN RuralFinanceInstitutionBuildingProgrammeSHGL SelfHelpGroupLinkageSICs StateImplementationCommitteesSMEDAN SmallandMediumEnterprisesDevelopmentAgencySMEIES SmallandMediumEnterprisesEquityInvestmentSchemeSMEs SmallandMediumScaleEnterprisesTFM TrustFundModelTOR TermsofReferenceUSAID UnitedStatesAgencyforInternationalDevelopment

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TableofContents1 OBJECTIVESOFTHESTUDY.............................................................................................................8

2 METHODOLOGICALAPPROACH......................................................................................................8

3 GENERALFRAMEWORKANDINTRODUCTION................................................................................9

3.1 Nigeriasagriculturalendowments.........................................................................................9

3.2 SignificanceofAgricultureintheNigerianEconomy............................................................10

3.3 DomesticAgriculturalPolicyOverview.................................................................................15

3.4 Nigeriasagriculturalperformance.......................................................................................19

4 OTHERANALYSIS...........................................................................................................................21

4.1 UnderstandingofNationalBudgetProcessofNigeria.........................................................21

4.2 NationalAgriculturalBudgetFormulationProcess...............................................................22

4.3 NationalPublicSpendinginAgriculture...............................................................................24

4.4 AgriculturalFinanceandInsurance.......................................................................................29

4.4.1 NigerianAgriculturalCooperativeandRuralDevelopmentBank(NACRDB)...............29

4.4.2 AgriculturalCreditGuaranteeSchemeFund(ACGSF)..................................................31

4.4.3 AgriculturalCreditSupportScheme(ACSS)..................................................................32

4.4.4 MicroCreditFund(MCF)...............................................................................................32

4.4.5 RuralFinanceInstitutionBuildingProgramme(RUFIN)...............................................33

4.4.6 NigerianAgriculturalInsuranceScheme(NAIS)............................................................34

4.4.7 SmallandMediumEnterprisesEquityInvestmentScheme(SMEEIS)..........................34

4.5 AgriculturalInvestmentsandNonStateActorsinNigeria...................................................35

4.5.1 BankingSectorCredittoAgriculture............................................................................35

4.5.2 InterventionsbyInternationalDevelopmentPartners.................................................37

4.5.3 OngoingandPipelineInvestments...............................................................................41

5 RECENT(2009)DEVELOPMENTSINNIGERIASAGRICULTURALSECTORLANDSCAPE.................45

5.1 5PointAgendaforAgriculture.............................................................................................45

5.2 CommercialAgricultureCreditScheme(CACS)200BillionNairaFund.............................46

5.3 $50MillionMicrofinanceFundforNigeriaandGhana........................................................47

6 CONCLUSIONSANDRECOMMENDATIONS...................................................................................48

7. REFERENCES..................................................................................................................................52

Table1:Percentagedistributionofworkingpopulationbyactivity.....................................................13Table2:Crops,livestockandfisherytargets(20082011)....................................................................17

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Table3:CostimplicationtoGovernmentin2008................................................................................18Table4:Fundingrequired(20082011periods)toachievefoodsecurityinNigeria...........................19Table5:Broadbudgetstagesorcycle..................................................................................................21Table6:Sizeofagric.capitalbudgetvisavisagric.recurrentbudgetandtotalfederalcapitalbudget..............................................................................................................................................................28Table7:Sectordistributionoftotalnumberofdevelopmentassistanceprojects(19992007).........39Table8:Sectordistributionofdevelopmentassistancegrants(19992007).......................................40Table9:Subsectordistributionofdevelopmentassistancetoagriculture.........................................41Table10:Profileofprojectinvestmentsinagriculturaldevelopmentandfoodsecurity....................43

Figure1:MapofwatercontrolinNigeria.............................................................................................10Figure2:Growthratesofaggregate(total)GDPandAgric.GDP.........................................................11Figure3:Agricultureworkingpopulationvisavistotalworkingpopulation(20032007)..................12Figure4:Growthrateoftotalworkingpopulationvisavisgrowthrateofagricultureworkingpopulation(20032007)........................................................................................................................12Figure5:Nigeria'saverageproductivity(Nairaperworker)profilebyeconomicactivity(2007)........13Figure6:Trendinpercentagedistributionofagriculturalworkingpopulationbygender..................15Figure7:Trendintotalagric.importvaluevisavisexportvalue.......................................................20Figure8:Nigeria'sannualbudgetcycle................................................................................................21Figure9:Budgetformulation/preparationstageinthebudgetcycle..................................................23Figure10:Totalfederalgovernmentspendingvisavisagriculturalspending(20002008)...............25Figure11:Trendincapitalbudgetimplementation(%)inNigeria......................................................26Figure12:Capitalbudgetperformance(%)inagriculture(20012007)...............................................27Figure13:Trendintotalagriculturecreditguaranteeschemefund(ACGSF)inNigeria.....................32Figure14:Bankcredittoprivatesectoras%ofGDPinNigeriaandothercountries..........................35Figure15:Trendintotalcommercialbank'sloanandadvances(trillionnaira)toNigeria'seconomy(20002008).........................................................