The recent announcement on Thursday last week, of the appointment of Muhammad Abu Ibrahim, Executive Secretary of, the National Agriculture Development Fund (NADF) by President Bola Ahmed Tinubu, has elicited hope of increased funding for agriculture investors and farmers across the country.
Chief Ajuri Ngelale, Special Adviser to the President on Media and Publicity, announced the approval of Mr. Muhammed Abu Ibrahim by President Tinubu, via a State House Press Release on Thursday, October 19th, to serve as the Executive Secretary and Chief Executive Officer of the National Agricultural Development Fund (NADF).
- “The President expects the new leadership at the Fund to successfully remove all barriers to efficient access to provisional funding in the sector for proven stakeholders nationwide, who will credibly contribute to the Renewed Hope Agenda’s mandate in the attainment of complete self-sufficiency in local food production and eventual surplus export.
- “By this directive of the President, the above-mentioned appointment takes immediate effect,” the release stated.
A Growing Concern for the Nation’s Agriculture Sector
Despite her immense agricultural potential, Nigeria has been grappling with a critical challenge that threatens its ambitions of becoming an agricultural powerhouse – the chronic issue of inadequate funding.
Despite the country’s vast arable land and a young, tech-inclined population, the agricultural sector has remained stunted due to a lack of substantial financial support.
Widely recognized as a key driver of economic growth in Nigeria, agriculture contributes significantly to the nation’s GDP and provides livelihoods to millions.
However, the insufficient allocation of funds to this sector has resulted in missed opportunities and a failure to realize its full potential.
One of the primary reasons attributed to this funding crisis is the inconsistent budgetary allocation by the Nigerian government.
The highest percentage of the national budget allocated to agriculture was 3.61 per cent in 2019. In 2020, it reduced to 1.51 per cent, but rose in 2021 to 1.92 per cent and dropped again to 1.25 per cent in 2022.
The Food and Agricultural Organisation (FAO) recommends that 25% of the government capital budget be allocated to agricultural development.
Nigeria is also a signatory to the 2003 African Union Maputo Declaration, which recommends a 10% national budgetary allocation to the development of agriculture, but the country’s inability to meet the set standard has resulted in negative implications for food security.
The repercussions of this funding crisis are profound. Nigeria continues to grapple with food insecurity and an over-reliance on food imports.
Furthermore, the country’s potential to become a regional and global agricultural exporter remains largely untapped, as its capacity for value addition and agribusiness development remains underdeveloped.
Some efforts that have been made to address these challenges by the government include, agricultural intervention programs and the creation of specialized financial institutions like the Bank of Agriculture and NIRSAL created in 2013, which stands for Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, to provide funding to farmers and agri-businesses.
However, the impact of these initiatives has been limited, and much more specialized and innovative funding is needed to bolster the sector’s growth.
Following the yearning of agricultural stakeholders, who believed the sector would be better served by a Fund that would specifically cater to its development, like TETFUND is to tertiary institutions in the country, the National Agricultural Development Fund was created in 2022 when former President Muhammadu Buhari signed the bill which was passed in March by the National Assembly into law.
Funding
In part IV of the Act establishing the NADF, its account shall be funded through a take-off grant provided by the Federal Government; 0.5% of the Natural Resource Development Fund; 5% of profit after tax of each commercial bank in Nigeria; 5% of petroleum profit tax; 50% of the duty levied on imported rice, wheat, sugar, and milk; monies appropriated by the National Assembly.
The Fund will in turn provide financing for the implementation of agricultural policies and to strengthen agriculture institutions within the framework of National priorities and strategies.
It will provide funds for on-lending to farmers and corporate bodies through appropriate financial institutions on appropriate soft terms; and provide finance for the establishment of special agricultural zones in the six geo-political zones to boost the food production system in Nigeria, among other financial interventions for agricultural development, the Fund is also mandated to assist donor institutions on efforts to increase food production in the country.
The Board of the Fund is expected under its establishing Act to be populated by a chairman, one representative each of the ministry of finance (office of the accountant general); Federal Inland Revenue Service; All Farmers’ Association of Nigeria; National Food Reserve Agency; Bankers Association of Nigeria; the organized private sector to represent special interest; two persons to represent the Federal Ministry of Agriculture and Water Resources; one person from each of the six geo-political zones and an Executive Secretary.
Stakeholders react to Ibrahim’s appointment
As stipulated in the NADF Act, the president shall only appoint to the position of the Executive Secretary/CEO of the fund, a person with cognate experience in agricultural finance, economics, and agricultural policy formulation and implementation.
Muhammad Abu Ibrahim holds a first degree in Accountancy from the University of Jos and is a Certified Agricultural Finance and Banking expert, he is an Alumnus of the Harvard Kennedy School and has also attended the Robert Kennedy College Zurich, Frankfurt School of Finance and Management and a Fellow of Aspen Institute Leadership Initiative for Africa.
He co-founded and was CFO of Sponge Analytics (A Data Analytics Company), which partnered with MTN Nigeria to develop Animal Identification and Management Solutions (MTN AIMS), the first of the kind in Africa, that was meant to solve the problems of cattle rustling, animal disease transmission, and the underdevelopment of the livestock value chain.
He later co-founded Livestock247.com (Nigeria’s 1st Online Livestock platform) which has changed the business of livestock in Nigeria and continued to initiate many tech-driven innovations in the crop side of agriculture through his involvement with many AgriTech companies in Nigeria.
Through Livestock247, where he served as a founding CFO, director, and later vice chairman of the board, Muhammad managed multi-million-dollar international donor-funded projects for various interventions in Nigeria.
Reacting to his appointment, the president of the All-Farmers’ Association of Nigeria, Arc Kabir Ibrahim told Nairametrics that farmers are excited by the development:
- “We are quite happy that the NADF will soon take off so that the funding of Agriculture may become easier and more seamless.
- “It should be noted carefully that the bill for the act was sponsored by a former President of AFAN, HE Abdullahi Adamu and AFAN was there at the public hearing to get it passed and later assented to by former President Buhari.
- “The farmers, like Oliver Twist, await the formation of the Board as contained in the act. The board will have a farmers’ representative who knows where the shoe pinches in farming, as the government itself does not own a farm.
- “The appointment of a relatively young man as the Chief Executive of the Fund should ordinarily translate to “go-getting” to make the Fund sustainably buoyant. The ability to attract funds to the Fund is the necessary elixir for it.
- “We await the implementation which the farmers will closely monitor and periodically evaluate for efficiency.”
In another reaction, the co-founder of RiceAfrika and Livestock247, Mr Ibrahim Maigari, described the newly appointed Executive secretary as a round peg in a round hole, who will leave a legacy in the agricultural sector.
According to him, this further signifies a big win for all entrepreneurs in the agriculture sector, as the NADF is to be driven by someone who shares the same perspective as agri-partnership, this he stressed is expected to have a visible impact on the agribusiness sector.
- “This is one appointment by President Bola Ahmed Tinubu that has gotten me excited beyond measure because of the quality, experience, and passion for the development of agriculture in Nigeria of the person appointed,” Maigari said.
Dr Austine Maduka, in his reaction, noted that the appointment of a new CEO for NADF was one of the commendable efforts made by the Tinubu administration to boost agriculture and enhance food security.
- “If the resources of NADF are applied effectively, there will be positive effects on the development of the agriculture sector, perhaps similar to the impact made by the Petroleum Trust Fund (PTF), in the provision of infrastructure and facilitation for other development activities to improve the wellbeing of Nigerians.”
However, he warned that the lofty mandates of the NADF can only be realizable and beneficial to farmers and the Nigerian economy if all the functions of the NADF were implemented patriotically and with a practical desire to attain food security.
- He said he was expectant that the NADF would take the financing for agriculture during the budget cycle of January to December. “It leads to the late release of money to every Ministry of Agriculture in the country long after the wet season has ended and similarly for dry season farming. This practice should be discarded,” he said.
Another stakeholder who spoke to NAIRAMETRICS, Mr Al-Mustpha Ibrahim, Chairman of Kwara State Agriculture Network, noted that NADF is a great initiative that will no doubt bring about much-needed development to the agricultural sector, but advised that the Fund be implemented in a manner that is transparent, efficient and effective.
- “My advice to the new agency is to ensure that the Fund is implemented in a manner that is transparent, efficient, and effective.
- The activation of the Fund will be a major boost to farmers and other stakeholders in the sector, as it will provide access to much-needed financing for agriculture.
- “There are several strategic roles that the National Agricultural Development Fund is expected to play in the development of the agricultural sector.
- First, it will act as a catalyst for investment in the sector, by providing incentives and guarantees for investors.
- Second, it will help to create linkages between farmers and the markets, by supporting the development of value chains and market infrastructure.
- Third, it will help to promote sustainable agricultural practices, by supporting research and development and the adoption of climate-smart technologies.
- Fourth, it will help to ensure food security, by supporting the development of local production systems.”
What next?
The National Agricultural Development Fund is a conception of farmers and agripreneurs, which was birthed by the 9th National Assembly and former President Buhari.
The current administration of President Tinubu has effectively received the baton and has made a very critical appointment to give life to the Fund.
Since the declaration of a state of emergency on food security by President Tinubu, the agricultural sector has continued to witness key initiative announcements expected to boost food production and drive down the high cost of food items.
So far, there has been no slowing sign in food inflation, while the government has continued to announce the release and distribution of palliatives across the country to ease the burden of households struggling to feed.
However, the effect of the current Administration’s agricultural policy initiatives is eagerly being envisaged to kick in at any moment following key personnel appointments in the sector, who are expected to waste no time in hitting the ground running.
I’m interested in mechanized agro-allied,cash crops, fishery and animal husbandry. I’ve got an arable land for these projects but I don’t have the capital to kick-start any of it. Kindly put me through how I can access funds through this bank for my projects sir.
Is a welcome development for agripreneur and all that are involved in the agricultural business. And most importantly, the agricultural institutions who are yearning for more funding.