Agribusiness: Nigeria’s paddies of promise


New financing mechanisms are helping to increase rice production in Nigeria. The country has a long way to go, however, before it has the milling capacity and irrigation systems needed to become self-sufficient, and can begin seeking export markets.

For Namadina Jega, testing the limits of the proverb “hard work never killed anyone” has been a daily venture for the last decade. For five or six days each week, the enterprising rice farmer travels on an old Jincheng motorcycle along the dusty path to his seven farms in his hometown of Jega, the commercial nerve centre of Nigeria’s Kebbi State, to tend to them from dawn till the sun goes down.

As an outgrower, the 43-year-old sells his production to a reseller, who treats and packages the rice before selling it to uptakers who buy in large quantities. Thanks to the e-wallet scheme initiated by Akinwumi Adesina, agriculture minister under the Goodluck Jonathan administration, Jega gets an alert once a month for subsidised fertiliser rations to nurture his crops without the interference of middlemen. And a new presidential initiative to supply farmers with subsidised fertilisers, imported in conjunction with the Moroccan government, now gives Jega and his mates various options to boost their cropping.

Back to the land

It may seem like so many things are going well in Nigeria’s rice sector. President Muhammadu Buhari has called for people to “go back to the land” amidst a recession and has predicted that the country will be self-sufficient in rice production by 2018. Critics point out that Nigeria regularly imports millions of tonnes of rice each year and that despite rising levels of production since 2014, much needs to be done in terms of infrastructure and finance. Nonetheless, a presidential aide dubiously declared in April that Nigeria was the world’s second-largest producer of rice and that exports had begun. The Africa Report went on a fact-finding mission to determine whether those claims are true and to see how well the rice sector has been doing.

There are signs of progress in many parts of the country. There are several thousand rice farmers like Jega scattered across the state who have benefited since November 2015 from the Bank of Agriculture and Central Bank of Nigeria’s Anchor Borrowers’ Programme. Kebbi State government added seed capital of N4bn ($12.7m) to the scheme, which provides loans with ­single-digit interest rates. Kebbi has 78,000 documented farmers and 3,800 beneficiaries of the Anchor scheme in the town of Jega alone.

Boosting production

To boost the local rice sector, in December Abubakar Atiku Bagudu, Kebbi State’s governor and chairman of the Presidential Committee on Rice and Wheat Production in Nigeria, announced the launch of the LAKE (Lagos-Kebbi) Rice partnership, where rice is grown in Kebbi and milled in the economic capital.

State governments are working on other ideas to boost rice production. In nearby Zamfara State, farmers in Yakoforji get free water for their crops from irrigation channels that are at least 30km long all the way from the Bakolori Dam. Not so far away, 15 farms spanning several thousand hectares and belonging to Ahmed Yerima, a former governor of the state, have Chinese engineers manning heavy machinery.

However, both local players and officials in Abuja cast doubt on claims about rice exports and self-sufficiency. “ Anyone who tells you we are exporting rice is a liar,” says Alhaji Bello Baidu emphatically. The 56-year-old head of a dry season farmers’ association in Jega is one of a few resellers who supervises the operations of a large number of outgrowers.  “We don’t produce enough rice for our sustenance here in Nigeria even, and so many people smuggle rice in from Benin Republic and Niger Republic. If you say we are exporting pepper and onions, I can agree. But not rice.”

Lending credence to this, Yemi Kale, head of the National Bureau of Statistics, tells The Africa Report: “There was no export of rice in 2010, 2012, 2014, 2015 and 2016.” Nigeria produced 7.9m tonnes of rice in 2016 – up from 6.7m in 2014, and an April 2016 report from the US Department of Agriculture projected that Nigeria’s rice imports would be 2.1m tonnes from May 2016 to April 2017. Waste from manual post-cultivation processes means that only about half of Nigeria’s production eventually gets milled. If the vast majority of the 7.9m tonnes produced last year was milled, it could meet the country’s typical annual consumption of about 7m tonnes.

Local investment in rice growing and processing is on the rise. A few players – including the likes of Olam (see page 75), a Singaporean multinational, and smaller firms like Labana – have invested in the rice sector in recent years. Concrete magnate Aliko Dangote has also mooted a $1bn investment to increase production to allow the country to meet its rice needs.

Smuggling routes

Meanwhile, there are a number of challenges for Nigeria’s rice farmers. First is the Land Use Act first promulgated in 1978, under which farmers are restricted to cultivating small farms and all land ultimately belongs to the government. There is also a lack of infrastructure to help small-scale farmers. Baidu, the Kebbi State-based rice reseller, says: “There are about seven states along the stretch of the River Niger, from Kebbi to Bayelsa alone, and we have a combined production of about 1.7m hectares with 4tn/ha currently. What of the areas along the Rivers Benue, Nasarawa, Kaduna etc., where there is rice-growing potential? With two croppings or cultivations per year, we can almost feed Nigeria.”

Nigeria’s strict policies discouraging rice imports mean that merchants on both sides of the borders with Niger and Benin have become experts at finding new smuggling routes. The costs involved in smuggling are also passed along the chain to the consumer, with a hike in prices over the past year by more than 100%. A 50kg bag of imported rice currently sells for N19,000–20,000 ($62-65), compared to about N10,000 for homegrown varieties. The local rice could be even cheaper, but the diesel for generators and levies imposed by local authorities keep prices elevated. Farmers typically buy only seed varieties with short maturity dates to use less fuel. A downside is that those varieties have smaller yields.

There has not been any recent policy focused on improving the quantity and quality of rice produced in the country. Under former agriculture minister Adesina, there was a strategic plan to create a rice boom, but it never became policy.

Self-sufficiency goals

Professor Olumuyiwa Osiname, who worked on the rice strategy with Adesina and is now at the International Institute of Tropical Agriculture, says that efforts must be coordinated if Nigeria hopes to become anywhere near self-sufficient. “If what we want is an import-substitution policy, we should concentrate on areas where we can get industrial rice [quantities] and not small-scale farming that will sustain only small farmers and their families. States to focus on are Kebbi, Jigawa, Sokoto, Zamfara, Niger and Katsina. There are big dams in these states, and they can grow irrigated rice twice a year. […] If we concentrate on 10 states like this, we can handle 70% of our needs.”

Debisi Araba, regional director for Africa at the International Center for Tropical Agriculture, says that players need to address “critical failures along the value chain. […] We should focus on increasing milling capacity and efficiency, which will in turn provide signals for increased crop production. There is urgent need to develop site-specific irrigation systems, small-scale dams and connecting farms with functioning roads. The public sector also needs to evolve strategies where public funds de-risk and stimulate private investments along the entire chain.”

Last year, many civil servants began to acquire farmland across Kebbi and Zamfara states, given the success of the Anchor Borrowers lending scheme. But they still rely on the likes of Jega, who has no formal training and no machinery – but plenty of experience in the field – to help nurture their crops to maturity. Nigeria’s new rice generation, like the economy it seeks to improve, is now in slow motion.

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