ATIKU BAGUDU: CBN’s Anchor Borrower Programme is a Phenomenal Success


With the launch of the 2020 wet season harvest aggregation and 2021 dry season, input distribution under the CBN-Rice Farmers’ Association of Nigeria (RIFAN) Anchor Borrowers’ Programme (ABP) in Zauro, Kebbi State, rice production in Nigeria is set to continue its growth trajectory. In its fifth year, the CBN has, through the ABP, galvanised agricultural production to meet the country’s growing population requirements. The ABP is an essential part of President Muhammadu Buhari’s drive for economic diversification; it has improved the fortunes of rural farmers and transformed agriculture into the potential for economic growth.

The CBN and RIFAN have targeted to cultivate one million hectares of rice farms, representing over 350 percent increase from the 221,450 cultivated in 2020 In the last five years, 2,923,937 farmers cultivating 3,647,643 hectares across 21 commodities through 23 participating financial institutions were financed in the 36 states, including the Federal Capital Territory. The seed for this revolution was first sown in Kebbi State under the leadership of Atiku Bagudu. In this interview with Eromosele Abiodun, Bagudu, vice chairman of the National Food Security Council, praised the CBN for its drive to sustain local production. He also spoke on how Nigeria can generate $15 billion from rice annually if it produces 30 million metric tons of rice, even at $500 per ton, Nigeria’s partnership with the Benin Republic, the farmers-herders crisis, and the food blockade by some northern trade unions. Excerpts:

Last year there was massive flooding in Kebbi and across the country that threatened Nigeria’s food security. As vice chairman of the National Food Security Council, can you tell us what was done to remain food secure?

I think in 2020, in addition to the pandemic, Nigeria witnessed two severe climate-related problems. The first one was the flooding in many states particularly in the northern parts and then a drought in a number of states particularly in the southern part. So the combination of the two no doubt affected food production. However, most Nigerian farmers are increasingly moving from one crop a year to two crops a year and some as much as three crops a year. So, that is the saving grace. For those who do dry season farming, the farm has control over variables, higher than during the wet season, where you can’t control the incidence of rainfall or rainfall intensity. But in the dry season, you use water pumps for irrigation, so you have control over the amount of water in the farmland. So, yields tend to be higher during the dry season because you have control over input. So, those combinations of multiple cropping per year and increasing yields have served to compensate for the losses occasioned by both drought and flooding.

But that is not to suggest that the farmers who suffered those droughts and floods are the same. So that is why many state governments and indeed the federal government has put in support measures. The federal government is considering given money and other forms of support to all the affected farmers in the 2020 season. And the Central Bank of Nigeria has expanded its programmes, both the ones it has been doing directly – the Anchor Borrower Programme, the admin scheme, COVID-19 support, and other institutions like NICAP. NICAP has also expanded, and then the federal government’s economic sustainability plan envisages spending of over N600 billion in agriculture, both as a response to the COVID-19 pandemic and to boost the level of economic activity. The results show that the recovery of the country from the recession, witnessed in the first quarter, is the net effect of all the policies and the resilience of the Nigerian people. S,o food security is not materially affected.

Can you tell Nigerians about the whole idea of the ABP? Where we are now, and where we are going?

The Anchor Borrowers Scheme, since it started, has been an innovation of the Central Bank of Nigeria to ensure that any organised group of participants in the agricultural space should have funding. They should also have uptakers; they should have the knowledge to do whatever subset of agriculture they want to do and do it well. Because once you help – whether it is farming, fishing, or animal husbandry – people with the knowledge to do it properly support them and provide financing to secure adequate inputs, once they are successful in that undertaking, they don’t have to worry about the market.

Then, part of the financing is also to ensure that they are insured against unforeseen events. You are reducing the risks that participants have taken. Measured by those indices, the Anchor Borrowers Programme has been a phenomenal success because it has mobilised farmers, fishermen, fishing communities, and those in the livestock sector to expand the economic activity, generate more yield and earn more from it. That has been quite a remarkable success, being celebrated, both in Nigeria and outside. The central bank also further recognises that even despite this Anchor Borrowers Programme, a good intention, there are young Nigerians, men, and women, out there who want more capital that is riskier because they don’t have a piece of land to start. They don’t have any collateral to secure.

Together with the Nigerian banking sector that donates five percent of annual profit to a fund managed by the central bank, also a scheme called Admins was introduced. It supports both production and processing, particularly for young entrepreneurs. No doubt, one can see that many companies in technology, financial innovation, processing, and knowledge provision to the agricultural sector had come up in the last few years. This has been very supportive of the economic recovery and growth creation in the country.

Kebbi is becoming the hub of rice production in Nigeria and can become the mainstay of the economy. What plans do you have regarding this?

We are not competing with other states. If you recall, I have always said, one of Nigeria’s blessings is that rice grows in 36 states and the FCT. There is no state – even Lagos – they have relatively small land because of urbanisation, which is the highest in the country. But still, they have some rice production going on in the state, which is further evidence that rice is a Nigerian crop, so to say. In the sense that maybe it is one of the few crops that you can find growing all the 36 states. Some states are even more suitably placed. For example, the most surprising will be Bayelsa. Bayelsa has a lot of water resources. Somebody doing rice in Bayelsa would not have water challenges like the one doing it in Kebbi. Because Kebbi farmers, during the dry season, have to pump (water), even the River Niger is lower than the farm level. You have to pump to bring the water up.

But in places like Bayelsa and some places in Kano (that’s not needed). That is why it is not surprising that even the Shagari government in the 1980s had the vision that Bayelsa, a prime area, should be producing at least two million metric tons of rice. Cross River is a major producer, Anambra, and Ebonyi. We also have Abakiliki. Like in Kebbi and Taraba, the women in Nasarawa, Jigawa, Sokoto, and elsewhere in Nigeria are known historically to be involved in rice farming and processing. It is not about even being the biggest; no. This is a big economic opportunity for the country in terms of its ability to contribute to employment, in terms of its ability to contribute to a product that we can sell elsewhere. Why can’t we be rice exporters? Bangladesh, which has about one-fifth of the Nigerian landmass, produces over 38 million metric tons of rice. So that means nothing stops us in Nigeria from achieving that.

If we produce 30 million metric tons of rice, even at $500 per ton, that is about $15 billion. States should complement each other, and that is what we have been doing in Kebbi. We share knowledge. The market is big to meet our needs. One of the event’s successes (in the last) two days ago was the Benin Republic delegation because all of a sudden, the Benin Republic recognised that Nigeria’s strategy is a strategy that works for the whole of West Africa. Let us mobilise all farmers in West Africa to produce more. It’s commendable that Benin has gone as far as saying they will ban any rice that Nigeria bans so that we can work. We don’t mind buying from Benin farmers. We are in ECOWAS together; we are under the ECOWAS and Africa Free Trade Agreement. What Nigeria is doing as Big Brother is evidently now showing West Africans and others; maybe, Africans benefit mutually. And that is a very, very, ingenious way for our economy, economic union to work.

Despite the ABP’s success, you will still discover there are skirmishes in some states where the programme has been hijacked. What’s done to resolve that?

I don’t think so, because really, the central bank has been very smart about it, any group can organise themselves. If there is Group A that organises itself, and there is an allegation rightly or wrongly, another group can do it. The central bank is not lending through one person or one organisation, or one entity. Because of that, nothing stops people from creating another organisation. Even the maize association has rival associations, and the central bank is dealing with all of them. I think Nigerians have also to embrace the policy success that; look, there are some things that we are not even competing with each other. We should complement each other.

When we complement each other, everyone benefits. Everyone benefits not only rice. We have done that for rice. As I said, Kebbi at one time had a partnership with Lagos. We sent people to Imo state to teach them. Because it is not like Kebbi is competing with Imo, we should complement each other to produce more. We should do the same thing for palm oil. We should do the same thing for cassava. We should do the same thing for yam. We should think of our place in the world rather than our relationship with each other and create more employment.

Some people will disagree with you on this rice success because they argued when rice was imported into Nigeria, it sold for N6000. Now that local rice production is sufficient, it sells for N25,000 or N26,000. How do you explain that?

First, when maybe rice was selling for N6,000, what was the exchange rate? What is the cost of input? How much does it cost to buy a litre of oil? For example, I tell you, in Kebbi, 100 percent of the farmers who are doing dry season farming rely on fuel generators to pump water. The fuel price will follow changes in petroleum prices. When maybe rice was selling for N6,000 per bag, maybe the fuel price was less than N80. So, input cost, material cost, and the exchange rate. But the beauty of that scenario is that Nigerians who are saying that are even ignoring a basic incentive. If you think the price is higher, produce more, go and make a farm. That is the beauty of the economic policy because you have an economic policy that supports everyone to produce.

If I don’t want to buy rice, and I think I can make money because people are making money, let me join. When we produce more, we can either reduce the amount we buy or contribute to national output increase. It is not only the price of rice that has increased. If only rice prices increase relative to other foodstuff and other foodstuff are not increasing, you can say the rice policy is not working. But when it reflects changes in general prices in the economy, the argument will be understandable. Today, the dollar in the black market sells for about N450. Somebody who imports rice obviously will have used the black market exchange rate, so if he is importing quality rice, it can’t come to him cheaper than Nigerian-produced rice.

One major challenge about the ABP is loan repayment. There was a time that mosques were engaged to encourage people to pay back their loans. How have we been able to resolve this?

Loan repayment will always be an issue. But again, the CBN acknowledged that the rate of loan repayment has been increasing. The rate of default has been declining. We are dealing with a major transformation. In a major transformation, success is not measured by 100 percent loan repayment. Success is measured by your objective. If your objective is to ensure Nigerians can feed themselves, you have to factor in that. What are you willing to trade off to achieve that? If your objective is to create more employment for Nigerians, is it creating more employment? If it is, then you also have to add that in discounting your concern about loan repayment.

How does this loan repayment compare with loan repayment in other countries for the same crop or the same purpose? How does this loan repayment compare with loan repayment in other sectors? The CBN has stated that it wants in the next two years to ensure that agricultural lending increased from four percent to 10 percent of the bank loans. This means what’s lent agriculture is four percent of the loss. Ninety-six percent is going elsewhere, not agriculture. If there are loan losses, it is not because of agriculture. There have been loan losses in the banking sector. The most evident indicator of loan losses is AMCON. We create an asset management company to take over bad loans from the Nigerian banking sector, which is about N5 trillion.

The total lending to agriculture has been under N1 trillion. However, I am not dismissing it. It is an issue. But it shouldn’t weaken our banks. Organisations, companies are increasing the way they extend credit through the ABP and other schemes. It is almost difficult to refuse to pay a loan except on an event’s occurrence because biometrics are captured. In addition to biometrics, you have your geometric, GIS coordinates of a firm taken. You even have drones being used to monitor when planting occurs when fertiliser is applied. To reduce exposure, insurance companies are putting in more resources and more personnel to ensure that farmers and all borrowers have done all they need to do. And then, because of the uptake agreement, overall loan performance has been increasing significantly.

You are a trained economist. You know the CBN should be concerned with monetary policy, inflation, and GDP growth. It seems to be taking a different path. If you are the CBN governor today, will you take this direction by being involved in the ABP?

This CBN is wonderful. What is central banking? Central banking is at the heart of the economic management of a country. It is not supposed to be the same for every country. Some countries have a more advanced, more sophisticated financial system. Some countries have more capital from around the world come into their economic system. For example, if you go to the UK, the amount of foreign capital in the UK and the American system is higher than Nigeria’s. In Nigeria, maybe the financial resources of Nigerians dominate the banking system. If you go to the U.S., it is not so.

The sovereign wealth funds of countries around the world; the Chinese money is in U.S. treasury bills. Chinese money is not in Nigeria’s treasury bills. Because of this, we have to figure out how to do it. We have to figure out how to energise our economy. What Godwin Emefiele has done is right, and congratulations to him. He has taken whatever risk to take to energise the Nigerian economy to ensure that Nigerian economic agents, whether they are farmers, processors, young people in technology, in entertainment; whether they are fishing communities, are supported.

That is the development finance role. The CBN supports the provision of financing and, like I said, an uptake arrangement supporting it, unlike anything we have ever seen before. It is not to say that CBN has never done development finance, but the importance attached to it in the last five years as a major feature of the management of the bank has never been seen before.

Kebbi attracted JB Foods to Gaska local government area as part of the value chain in tomato farming and processing. What is the state of that partnership now?

We are seeking Mr. President’s availability sometime this month to commission the factory, with a very big tomato processing facility. The day before yesterday, I showed pictures were about 500 women are employed on a daily basis. It’s been a huge success.

Coming back to the pyramid: we understand it was from one local government in Kebbi. Is that correct?

No; not necessarily from the local government, but you can easily get from one local government? But I don’t know because I didn’t organise the pyramid. The rice farmers association did. But it’s not even a surprise. It will be a percentage of the rice output of a local government. Let Nigerian believe in themselves. God gave us a great country. I am not surprised if I see this rice pyramid in Ebonyi. I will not be surprised if I see them in Cross River. It is not a big deal. Our people are hardworking. See, our woman, 4 am they are awake. They are by the roadside selling cashew nuts. They are walking to a market with a calabash on their head, and they are out looking for water. You can see our hardworking farmers with their cutlass, hoe working. These people are not lazy.

They have demonstrated their efforts for the rest of society, for you in the intellectual arm, you and I that have been educated sometimes at their expense, to think for them so that the value of their efforts will be rewarded. That is our role. The pyramids you talked about should be seen in every state in Nigeria. That is part of God’s providence to us. If we don’t manage it, it is our own making.

Let’s talk about the resolved food crisis in the South due to the blockade by some trade unions in the North and the herdsmen crisis. In fact, the price of tomatoes soared. What do you think is the solution to a future occurrence of a crisis like that?

First, in my remarks during the crisis, I said there was no blockade. We have to rise and defend our country against those who have nothing to lose if they encourage us to do the wrong thing. A union called Amalgamated Union of Foodstuff and Cattle Traders issued a statement a few days ago calling the government’s attention that their members were caught up in incidents across the country. Not just the southern part, but across the country. They have lost their vehicles. Before vehicles, some of them lost their lives. Some of them lost their vehicles, and it is generally more difficult for them to move goods anywhere across the country. It is not North to South; not South to North; that was the statement they issued and that if nothing was done, they would go on strike. They felt nothing was done to their satisfaction, and they went on strike.

But this has been turned to ‘Oh, there has been a blockage of some movement across the country.’ I remember calling the chairman. I said, well, then whatever the nobility of your cause, it is misrepresented as a blockade, which is not good, and it is coming at the wrong time. He quickly said they didn’t look at it from this perspective. But they felt ignored. I called the chief of staff to Mr. President; informed him, and promptly agreed to act. The chief of staff told me he had set up a meeting with them. I called the chairman of the amalgamated union and told him. Kogi governor also contacted them. Kogi governor came here, and I told him, please coordinate the meeting: which had since been held, and the matter was resolved. They went there to announce that they had called off their strike. We should strengthen the bond of what works for us. Nobody can win in a blockade.

The poor farmer who produces his tomato and the person selling his palm oil are the ones losing. I have been to Oyo after the Sasha incident. I have been to Abeokuta. I was a member of the delegation to Akure before then to Imo. People who are dealing with these issues are not looking at them in this elitist camp. They are willing to forgive each other; they understand that incidents can happen. They are a matter of life; sometimes, competition, like in Ibadan, competition for leadership control is not tribal. We have seen competition for leadership of NURTW in different states, and it is still a perennial problem. We need to all put this together and know that isolated incidents should not be given pride of place to the detriment of those things that are more unifying and now supporting more Nigerians’ livelihoods.

One can see you’re pan-Nigerian. You believe in the Nigerian project. Would you allow your vision for Nigeria to go with your tenure as a governor? What is your political future?

Every one of us has an obligation before God, to use whatever providence God has given us to continue to serve our people; your role as a community leader, as a statesman, as an advisor, that it doesn’t end. We have an obligation to our country to continue to provide support, engage in discussion, promote, and advise the people whom God might put in governance. That leadership is alive. It is a lifelong role for me, and we have seen others do it be religious leaders, traditional leaders, other people.

You just have to define your role. You have to know that it doesn’t begin and end with an election. That’s part of one of the things that we have to cure about our democracy. Democracy is not just getting people elected into office or giving those elected in office the illusion that they are the only leaders. Everyone has a role, whether in or out of office, to pressure and ensure that leadership continues to recognise our dream, our ideals: we want a strong, united Nigeria. Our young men and women out there want to compete with the Japanese. They want to compete with the Koreans. They are not interested in our divisive fault lines. They want the pride of a nation. They want the support to compete globally, and we owe it to them.

The Argungu fishing festival was a global event last year. Any plan this year? Secondly, the central bank governor in Kebbi on Tuesday stated that he wanted a situation that rice production in Nigeria will grow from five percent of GDP to 10 percent. How do we get to that 10 percent?

The Agungun fishing festival was celebrated last year, March 12 to 14. But unfortunately, this year, because of the COVID-19 pandemic, we felt that having many people come to the same place, we can’t manage the COVID-19 logistics. It is a festival you can hardly control the behaviour of many people. Because it is a water-based event, people cannot jump into the water wearing a face mask. Because many people will come close to each other, it will be so much of a challenge. Regrettably, we decided that we’d rather wait and pray. With all the measures now vaccines maybe by next year, we will have the opportunity to celebrate.

As for your question about rice production, producing more rice is easy. Many farmers across Nigeria are already farming, who, with little support, essential services, training in modern agronomic practices, and financing, have moved from the current yield to a bigger yield. That automatically increases rice production. In Kebbi, it used to be with one hectare; you produced less than a tonne. Now with one hectare, you produce a minimum of five tonnes. You can imagine if all rice farmers can achieve that, that would be a fivefold yield or fivefold increase in rice production. Then more people are attracted to farming or expanding their farmland and then multiple cropping. It used to be that most of our farmers only farmed one crop during the rainy season.

Now, they do more than one crop, and they even invest more in the dry season. So a combination of these and then continuous support by government policy improved production tremendously. President Muhammadu Buhari supported the closure of borders, not because we don’t like our neighbours, but just to show that we are serious about the fact that if Nigerians can produce something, and that the government should protect those Nigerians against unfair competition from abroad. The message has resonated that more Nigerians are investing in it.