Anchor Borrowers’ Programme as an Effective Tool for Food Sufficiency

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By Ndubuisi Francis

With the Anchor Borrowers’ Programme (ABP), an initiative of the Central Bank of Nigeria (CBN), the right chord appears to have been struck towards food sufficiency, writes Ndubuisi Francis

Prior to the launch of the  Anchor Borrowers’ Programme by President Muhammadu   in Kebbi State on November 17, 2015, Nigeria was beset by a combination of a precipitous falling oil prices and  skyrocketing food import bills.

Rice imports alone gulped, a about $2 billion annually– a development the Governor of the CBN, Mr. Godwin Emefiele described as unsustainable, considering the nation’s depleted foreign reserves.

Prior to the advent of the  scheme, the rice import cabal in the country fed fat from dumping the staple food on hapless Nigerians at exorbitant prices; a development the National Agency for Food and Drugs Administration and Control (NAFDAC) and the Nigeria Customs Service (NCS) perennially frowned on because of the contentious nutritional value.

Importers frustrated every effort of government to grow rice locally such that when the federal government banned its importation through the land borders and embarked on tariff hike when imported through the seaports, they still devised strategies to smuggle the item into the country. 

Again, when the CBN included rice as one of the 41 items on the foreign exchange (Forex) prohibition list, they literally engaged the apex bank in fisticuffs.

However, despite the sustained campaign of calumny against the ABP, the successes recorded so far have vindicated Emefiele’s disposition that given the right incentives, Nigerian farmers will meet local food demand.

Since the ABP took off in 2015, about 17 states have embraced it with total disbursement from CBN as at December 2016 stands at N26, 998,143,566.

Emefiele had said that it was the beginning of rice revolution in the country. Thousands of jobs have also been created along the rice value chain.

Currently, rice production in Nigeria, according to available statistics, stands at 4.5 metric tonnes and out of this figure, 2.5 metric tonnes is from the CBN ABP.

Aside that, Nigerians insatiable appetite for foreign rice has waned considerably in the last one year as consumers have come to appreciate the freshness of local rice unlike the foreign brands that have been stored for upward of half a decade under questionable conditions, before being dumped in the country. So, it was the need to reduce the pressure on the nation’s scarce foreign exchange (Forex) for the importation of foods like rice, milk, wheat, fish, etc; create jobs, guarantee food sufficiency and open export windows that Emefiele insisted the country must immediately start local production of these items using the ABP as the fulcrum.

Hence, the scheme became one of the vehicles the CBN used to move from concentrating only on price, monetary and financial system stability to act as financial catalyst in specific sectors of the economy, particularly agriculture.

N40 billion, out of the N220 billion Micro, Small and Medium Enterprises Development Fund (MSMEDF) has been earmarked as loan for farmers at a single-digit interest rate of 9 per cent. The CBN also released the simplified guidelines on how any business-minded stakeholder could access the fund all in its efforts to return Nigeria to the early 1960s to mid-1980s era, when visionary leaders like Chief Michael Okpara in Eastern Nigeria, Obafemi Awolowo of the Western region and Tafawa Balewa of the Northern flank, made agriculture the main stay of the economy.  Okpara revolutionised oil palm; Awolowo built the economy of the western region with cocoa, while Balewa spearheaded the groundnut pyramids which the north was known for.

The apex bank targets that by 2021, the ABP will have created at least 1,000,000 direct and indirect jobs in the processing segment of the identified value chains.

Unfortunately, it was the discovery of crude oil in commercial quantity in the 50s and 60s that panned successive government’s attention away from agriculture, thus vandalizing the nation’s economy and leaving it in prostrate state till date.

Emefiele said the ABP, which is being implemented under the auspices of Presidential Task Force on Rice, Wheat, Cassava and Tomato with the involvement of the Federal Ministry of Agriculture and Rural Development, aims at creating economic linkages between over 600,000 smallholder farmers and reputable large-scale processors with a view to increasing agricultural output and significantly improving capacity utilization of integrated mills. This, he noted, would close the gap between the levels of local rice production and domestic consumption, as well as complement the Growth Enhancement Support (GES) Scheme of the Federal Ministry of Agriculture and Rural Development by graduating GESfarmers from subsistence farming to commercial production.

Many individuals and corporate bodies like the Manufacturers Association of Nigeria (MAN), the National Association of Small Scale Industrialists (NASSI) have lauded the ABP, which encompasses the commercial production of rice, wheat, tomatoes, cassava and other crops. They describe it as a timely and effective scheme that should be sustained and replicated in other sectors. They urged various Ministries to work with the CBN to see areas of immediate collaboration in the urgent task of diversifying the nation’s economy.

They said the CBN should not succumb to the pressure from some quarters to exclude rice and other foods from the 41 items on the Forex ban list. MAN President, Dr. Frank Jacobs, while appraising the programme described it as laudable and encouraged other states that are yet to key in to come on board.

“The scheme is good. Any programme that will encourage local production either in agriculture or other area is a welcome development. We applaud the ABP. It has helped create jobs for many farmers and other investors. It’s the right way to go and the CBN should be encouraged”, he said.

While appreciating CBN’s efforts in rice production, he said the same zeal should be replicated in other areas like palm oil, cocoa, rubber, among others to meet local consumption.

He also called for greater private sector participation that will come into the value chain by setting up plants that will transform the farm products into semi-processed items to be used in manufacturing.

“The private sector can come into the off-takers’ segment by using what is produced for manufacturing various items. For instance, cocoa can be used to make chocolates, palm oil for soaps and all that”, he said.

Also analysing the programme, the President, NASSI, Ezekiel Essien encouraged the apex bank to sustain the initiative.

“Anything that is done to better the lot of the Nigerian masses is a most welcome development. I know many of our members in Bornu, Adamawa, Ogun, Imo, CrossRiver and other States that have applied for this loan under the ABP scheme. Some have received positive response while others have not. “We implore the CBN to make the process easier for all those who are serious in the business. It’s good and should be encouraged”, he said.

Economic experts have also urged the apex bank not to lose sight of the export-oriented leg of government’s industrialization programme by assisting exporters to ship out locally produced goods after local demands are met. They say such a strategy is needed to achieve the forward and backward linkage effect between the agricultural and manufacturing sectors; which culminates into massive job creation, revenue generation and food sufficiency.

However, about 14 months after the launch of the ABP, the participating States have soothing tales to share as their farmers Recorded good yields, thus crashing the price of rice in their domain.

In Ebonyi State, traders who sold the locally-grown and healthier rice as low as N9, 000 per 50kg bag in December 2016 commended the CBN for the ABP. This was a significant price crash compared to N25, 000 that foreign rice was sold at that time. Same was the case in Kebbi and Jigawa States. Lagosand Ogun States also witnessed a drop in rice price.

A rice trader in Ebonyi, Chibundu Awa hailed the locally produced rice, calling on Nigerians to support the CBN in its efforts to encourage local production. 

In Cross River State, Governor Ben Ayade, while speaking with journalists after a tour of rice farms in Ogoja recently thanked the CBN for the N3 billion support. He said money will not only be used to produce rice, but also used to establish mills for processing it and silos for storage.

“So in Cross River State, the 100,000 farmers that we would be working with will have the benefit of processing all the rice they will be harvesting at the mill”, Ayade stated.

In Katsina, the State Governor, Aminu Bello Masari, said the State had set aside N8 billion for the agriculture sector in its 2017 budget, adding that over 20,000 farmers are participating in the ABP in the State.

In Anambra, a private rice farmer and Chairman of Coscharis Group, Mr. Cosmas Maduka, said his rice farm will provide full time employment for about 3,000 people as well as drive ancillary industrial growth in the State when all the phases of the investment are complete.

Meanwhile, the Minister of Agriculture and Rural Development, Chief Audu Ogbeh on the sideline of the visit said the federal government may soon stop importation of rice into the country given the increased rice production across the country facilitated by the CBN backed ABP.

Interestingly, the cheery news of the ABP’s success and the genuine determination of the Federal Government to end food importation in the country, have also attracted Chairman of Dangote Group, Aliko Dangote who told Nigerians at a recent event in Lagos that he was delving deeply into agriculture by establishing Dangote Farms Limited.

He lamented that Nigeria consumes 6.5 metric tonnes of rice, which costs the nation a whopping $2billion annually. He thus said the ABP and other government’s initiatives to address food shortage and stimulate exports are welcome developments.

Economic analysts have urged the federal government not only to sustain the scheme but expand it due to its inherent benefit to the nation in terms of job creation, Forex earning, food security and national development.