AfDB Support Loan for Nigeria’s Agriculture

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African Development Bank supports Nigeria’s agricultural transformation agenda programme with $152.12 million loan

By Vincent Nzemeke  |  Nov. 18, 2013 @ 01:00 GMT

THE board of directors of the African Development Bank, AfDB, has approved a loan of $152.12 million to finance the first phase of Nigeria’s agricultural transformation agenda support programme known as ATASP-1. The loan is one of the initiatives put in place by the bank to transform agriculture into a profitable business.

ATASP-1 seeks to promote employment generation and shared wealth creation along the commodity value chains, as well as food and nutrition security. Its specific objective is to sustainably increase the income of smallholder farmers and rural entrepreneurs engaged in the production, processing, storage and marketing of the selected commodity value chains.

According to AfDB estimates, Nigeria has a huge potential in agriculture with 84 million hectares of arable land, abundant labour, untapped water resources and a market of 167 million people. However, less than 40% of the arable land is cultivated and the country has become a net importer of food, spending over $10 billion per annum in the importation of wheat, rice, sugar and fish.

Reports from bank funded projects indicate that while farmers have made significant gains by adopting improved crop varieties and farming practices, productivity falls far short of the full potential along the commodity value chains. Thus, the current project is targeting support for value addition through processing, better nutritious product and market linkages to improve farm profits and incomes critical for enhanced productivity from subsistence to commercial agriculture.

The programme is in line with the federal government of Nigeria’s agricultural transformation agenda, ATA, which aims to attract private sector investment in agriculture, reduce post-harvest losses, add value to local agricultural produce, develop rural infrastructure and enhance access of farmers and other value chain actors to financial services and markets. The ATASP-1 fits with the two strategic pillars of the bank’s country strategy paper for Nigeria, CSP, 2013-2017, which are: supporting the development of a sound policy environment; and investing in critical infrastructure to promote the development of the real sector of the economy.

ATASP-1 is mainly an infrastructure restoration intervention that will rehabilitate 1,300 kms of irrigation water conveyance canals; 39,777 ha of existing crop production schemes; 1,330 kms of feeder roads; 1,007 units of hydraulic structures; 14 community markets; 35 primary schools; and 14 community health centres. It will provide 63 potable water and sanitation systems and establish seven technology demonstration centres. It will be implemented in four staple crops processing zones in seven states covering 194,426 km of land and 32,121,944 inhabitants made up of 50.93 percent males and 49.07 percent females who are predominantly farmers and small scale commodity processors.

The direct beneficiaries of ATASP-1 include 45,300 farmers and rural entrepreneurs participating in commercial agricultural value chains in the four processing zones. These include existing or potential small, medium and large-scale entrepreneurs and business associations who provide services to rural households. A further 200,000 rural youth 40 percent of them are estimated to be females, who presently lack employment opportunities in the adjoining farming communities will be especially targeted in the outreach program that will provide them with training and support to improve their lives through engagement in agriculture and related businesses.

The programme which will be implemented in five years is estimated at $175 million. The bank’s financing will account for 87 percent of the overall costs. The federal government and seven states located in the four processing zones will contribute $13.85 million which is 12.2 percent while the beneficiaries will contribute $0.66 million which accounts for 0.6 percent of total program costs. The beneficiaries include farmers and farmers’ cooperatives, commodity processors, private sector operators and registered small and medium enterprises, SMEs.

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