Obinna Chima examines the contribution of the Anchor Borrowers’ Programme, a development finance initiative of the Central Bank of Nigeria, towards the country’s drive to raise productivity in the agriculture sector

In order to develop other sources of revenue as well as to protect the economy from perennial shocks occasioned by the drop in crude oil prices, the federal government has been paying more attention to the agricultural sector.

Indeed, that has prompted the Central Bank of Nigeria (CBN), through its Anchor Borrowers’ Programme (ABP), under its development finance function to continue to seek for ways to support operators in the agricultural sector in order to create job opportunities and help preserve foreign exchange (forex) revenues.

In fact, agriculture has been described as a key catalyst for creating jobs, reducing unemployment and driving growth in Nigeria.

The ABP was also one of the reasons why the non-oil sector’s contribution to the country’s Gross Domestic Product figures released recently improved. According to the NBS, the Nigerian economy grew in real terms by 1.92 per cent in the fourth quarter (Q4) of 2017 (year-on-year), maintaining its positive growth trajectory since the emergence of the economy from recession in the second quarter (Q2) of 2017.

Specifically, the non-oil sector recorded an annual growth of 0.47 per cent compared to -0.22 in 2016, adding that the fourth quarter growth was 1.78 points higher than the rate recorded in the same quarter of 2016 but 2.21 per cent point higher than in the third quarter of 2017.

The pilot phase of the ABP with rice cultivation that commenced in Kebbi state had proven to be a success, which was extended to other states.
The ABP programme was designed to assist small scale farmers to increase the production and supply of feedstock to agro-processors.

The programme is aimed at creating an ecosystem to link out-growers (small holder farmers) to local processors, increase banks’ financing to the agricultural sector enhance capacity utilisation of agricultural firms involved in the production of identified commodities and as well as the productivity and incomes of farmers. The anchor borrowers’ programme is also a platform to build capacity of banks in agricultural lending to farmers and entrepreneurs in the value chain, reduce commodity importation. It is also expected to reduce the level of poverty among small holder farmers and create jobs while assisting rural small-holder farmers to grow from subsistence to commercial production levels.

In terms of the modalities for implementation, the programme was hinged on three pronged approach namely the out-grower support programme; training of farmers, extension workers and banks; and risk mitigation. In addition, the major stakeholders in the agricultural value chain worked with financial institutions, including the insurance industry and CBN, to create the linkages required to sustainably ramp up production.

The second leg is the training of farmers, extension workers and banks. The training component involved customised value-chain finance modules for banks and an agri-business training protocol for farmers that is consistent with the aspiration of the ABP.

The Governor of the CBN, Godwin Emefiele recently put the total amount of money disbursed under the ABP in partnership with the state governments and private sector group since the commencement of the programme, at N55.526 billion to over 250,000 farmers. These set of farmers, according to the CBN Governor, have cultivated almost 300,000 hectares of farmland for rice, wheat, maize, cotton, soybeans, cassava, etc.
“Two years into the implementation, the programme has contributed to the creation of an estimated 890,000 direct and 2.6 million indirect jobs,” he explained.

Boost for ABP

Owing to the success story recorded with rice cultivation, the Central Bank of Nigeria (CBN) recently expressed its willingness to support the setting up of a new Egg Powder Plant in Emure-Ile, near Owo, Ondo State that would be established through a Public Private Partnership (PPP) arrangement between the Ondo State Government and Greenfield Assets Limited.

For example, in 2003, importation of chickens was banned Nigeria, with the exception of day old chickens. Yet, this seemingly innocuous policy served as a major fillip for the poultry industry. Today, some analysts have put the Nigerian poultry industry to be worth about N1.2 trillion, comprising about 165 million birds, which produces over 650,000 Metric Tonnes of eggs and 290,000 Metric Tonnes of poultry, making Nigeria the largest producer of eggs in Africa.

Despite this huge success in the subsector, statistics from Eurostat, however highlight that between 2009 and 2011, over 3 million Metric Tonnes of poultry products were imported into the Republic of Benin, and eventually smuggled into Nigeria.

This means that despite the huge domestic production, Nigeria is still far behind meeting our local consumption needs for poultry products.
These clearly, were some of the reasons that made Greenfield Assets Limited and the Ondo State Development and Investment Promotion Agency (ONDIPA) to fill the gap with the investment.

Emefiele pointed out that the Integrated Poultry Facility comprises a pasteurised liquid and powder egg processing facility, 200,000 commercial rearing capacity, 600,000 commercial layers, egg grading and packing centre, a state of the art Feed Mill, and modern Broiler Processing Operation.
He disclosed that Ondo State was working closely with the CBN through the ABP to support an out growers’ programme.

Emefiele who spoke during the ground-breaking ceremony for the factory added: “Let me note at this juncture that this attention to agriculture is by no means a bad strategy. In fact, agriculture can still be used as a key catalyst for creating jobs, reducing unemployment and driving growth in Nigeria.
“For example, many of you would recall that in 2003, importation of chickens was banned Nigeria, with the exception of day old chickens. Yet, this seemingly innocuous policy served as a major fillip for the poultry industry.

“Today, some analysts have put the Nigerian poultry industry to be worth about N1.2trillion, comprising about 165 million birds, which produces over 650,000 Metric Tonnes of eggs and 290,000 Metric Tonnes of poultry, making Nigeria the largest producer of eggs in Africa.

“Despite this huge success in the sub-sector, statistics from Eurostat however highlight that between 2009 and 2011, over three million metric tonnes of poultry products were imported into the Republic of Benin, and eventually smuggled into Nigeria.
“This means that despite the huge domestic production, we are still far behind meeting our local consumption needs for poultry products.”

He said the central bank remains committed to working with state governments in supporting small holder farmers and processors across other items, just as he assured Ondo State Government of the continued support of the Bank.
Also, the technical partner on the project, the Managing Director, Big Dutchman, Mr. Elmar Dorenkamp, stated that the project would help reduce the egg glut suffered by farmers in Nigeria and reduce significantly, the importation of powdered egg into Nigeria. The programme would also be beneficial to over 1,000 maize and soyabeans farmers in the state as under the ABP, they would be allowed to supply their produce to the feed mill.

In addition, the presentation from the Technical Partners indicated this Integrated Poultry Facility comprises a Pasteurized Liquid and Powder Egg Processing Facility, 200,000 Commercial Rearing Capacity, 600,000 Commercial Layers, Egg Grading and Packing Centre, a state of the art Feed Mill, and modern Broiler Processing Operation.

Continuing, Emefiele added: “We at the CBN have said that we will give support to anybody that wants to tap the potential that God has given our country by providing access to finance and creating job opportunities for the youths.”

In his speech, the Ondo State Governor, Rotimi Akeredolu estimated value of this project by Greenfield Investment, which is expected to be completed in one year, at about N42 billion.
The Minister of Agriculture, Chief Audu Ogbeh has described the Anchor Borrowers’ Programme (ABP) introduced by the Governor of Central Bank of Nigeria (CBN), Mr. Godwin Emefiele as revolutionary.

According to Ogbeh, with the ABP, rice revolution has started in the country.Ogbe noted that the ABP remains one of the greatest achievement by the CBN in the last 50 years.
For instance, he pointed out that there had been tremendous pressure on the government to import rice in order to meet the demand for the commodity, which was an indication that those mounting such pressure never believed that the ABP was working.

Ogbeh said that it does not make any economic sense to continue to spend scare foreign exchange resources on rice importation and other produce the country has huge potential to grow rice in commercial quantity, noting that each ship load of rice imported into the country displaces 12, 000 farmers from employment. According to him, the CBN ABP initiative is making rural dwellers rich.