Leadership (Abuja)

Nigeria: Stop Creating Poverty Through Food Imports - Akinwumi


The minister of agriculture and rural development , Dr Akinwumi Adeshina, in a bare-it-all exclusive interview with Tony Amokeodo and Ruth Tene Natsa urges Nigerians to begin to appreciate and process local products as a means to wealth and generating employment as against breeding poverty

Congratulations on the Forbes Award, what are we expecting from you as a global figure now?

Thank you for your kind words. The award is a recognition and not a competition and that recognition is bigger than myself, because it is about what I stand for and what I have worked for so tirelessly all of my life, which is to create a new future for Africa, one wherein we are generating wealth out of what we have in abundance, which is agriculture; instead of managing poverty, because I really genuinely believe that we can lead millions of people out of poverty into wealth by taking agriculture as a business.

Why do you say that?

We must be able to use fiscal policy in agriculture to add to our own GDP significantly. So, I think all African countries with all humility today are looking at Nigeria. They are looking at our example and saying this is the way to do agriculture and I think it is fantastic for Nigeria. But I think there is still much work to be done.

What is the hope of this agricultural revolution?

The total gross value of our agriculture today is about $99 billion, and through the ATA, we want to grow that to about $230 billion. We want to lower our import bill and add value to every single thing that we are producing. We want to create jobs here; that is the direction that we have actually decided to move with respect to agriculture. When I came here, people were not even selling fertilisers to government and they were getting paid. It took us 90 days exactly to clean up a corruption of 40 years. I do not give fertiliser nor sign seeds contracts. And I will never sign any, because that is not the job of a minister. We have attracted $8 billion of private commitments into this sector.

Why are farmers complaining that they are unable to access their facilities?

Banks are not philanthropic organisations. They keep your money and must have a return. So, they have to be convinced that the risks are worth taking and that you are managing or reducing the risks and that the returns to lending are high enough and comparable to other sectors. So, when I became minister, my job was to take agriculture from the low level into a sector that is productive, efficient and competitive; a money-making sector. So, I created money trail for banks to see, because when banks can see the money trail, they will lend. That was what has happened? We fixed the agriculture value chain. In the case of cassava, we said we were going to use cassava for high quality flour to replace some of the wheat that we are importing, we said we were going to use cassava for starch, ethanol, dry chips, and sweeteners to replace the sugar. For example, on dry cassava chips, we secured a contract for 3.2 million metric tonnes for dry cassava chips export to China, and the total value is $830 million. Now, that means the farmers that are being loaned money by the banks, as they process and add value to chips and export to China, they can pay back. We started the GES, where farmers can get seeds and fertilisers via their mobile phones. That created markets for other agro dealers. Today, I do not run after banks, the banks are the ones that run after agriculture.

Are farmers aware of these facilities, and is the 24% interest to the banks not too high?

Let me state my position, if anybody in agriculture borrows money at 24% interest rate, you can never make a profit. American farmers, since about 1865, have been borrowing money at 4% interest rate. Europeans subsidise their farmers. I believe that agricultural loans should be provided at single digit interest rate, due to the risk and the fact that majority of farmers need money. And the fact that the loans are not short-term loans. With the BOA, the President has directed the bank's capitalisation with N15 million and that it should provide loans at single digit interest rate. Working with the minister of finance, we have launched Fund for Financing Agriculture in Nigeria, which has in fact taken off already. We are working with the German government's KFW, which is the largest development bank in the world.

Speaking of cassava bread, what are you doing to ensure it is on the tables of all Nigerians?

If you go to Park and Shop and Shoprite, the breads they sell there are 25% cassava flour and 75% wheat flour. At the D-8 Ministers' meeting, the foreign ministers saw the cassava bread from Zuma, a bakery outside Abuja, and said, "We can not believe that this is the bread that you are talking about. It is so tasty, it is so nice." We are the largest producers of cassava in the world. We should become the largest processors too.

We have signed an MOU with BOI of N4.3 billion and it will allow our bakers access to new equipment to process cassava flour. We are also going to use the facility to upgrade 135 SMEs that are doing cassava flour.

So, we can get cassava bread easily?

It is the only thing I eat everyday, and it is fantastic. You see, if you want to manufacture poverty, it is simple; forget what you produce and import what others produce. That way, you create poverty as an industry, and we are not going to do that.

Is there a ban on rice importation, and are there plans to increase rice tariffs in 2014?

We have not banned import of rice. What we are doing again is, if you look at our potential for producing rice, we should be a net exporter of rice. But we are spending too much money importing rice from Thailand and India. So, let me tell you exactly what we are doing. We raised tariffs. Yes, we had to. Now, this is where the problem is, some of the importers are angry with me, that they could not bring in rice, while some argued that we were not producing enough rice. They are all lies.

How are you sensitising the people on a positive attitude to the local rice?

That attitude is not only for rice, it is an attitude for everything that we produce. You see, we have local rice, which is very tasty, healthy and good.

How much is the government doing about aqua development?

God loves Nigeria. We have the ocean, rivers, lakes, estuaries and ponds everywhere. Fish does not grow in the air, but in water, and we have water all over the place. We have 2.63 billion cubic metres of water, and we are importing fish. Now, take a look at what is happening to us in our deep sea fishing. We don't touch it at all. Foreigners come to our deep sea, haul off all our shrimps, they take it all away, repackage it and sell it back to us. You take a look at what has happened to us in regards to our trawlers association. It is decimated, because we have sea piracy that has run that particular business out.

How much does Nigeria have in her food reserve?

When I was appointed minister, the strategic silos in the country were at about 35% completion. Today, we have finished everything. There are those that are 25,000 tonnes, there are those that are 100,000 tonnes. But they are so huge that government cannot manage them. I didn't commission them, but I had to finish them. But it is not the job of government to be owning silos. That is why I called in the Infrastructure Concession Regulatory Commission, and I directed that we must privatise and lease them out to the private sector. We have leased them out. As I speak to you, seven of them are to the African Commodity Exchange. They have started what they call electronic warehouse receipt system, where the farmers will bring their grains, get a receipt for the grains, the grains would be stored for them, and the farmer can take that receipt to the bank as a collateral. So, it creates markets, gives them higher prices and stabilises the market. And that is what we are doing. We want to create a world-class commodity exchange. We just started with a pilot. But when it comes to food losses, we still experience high losses in some of our things, like fruits and vegetables. The reason is because of lack of proper farm level storage. And so, what we need more of are actually not silos. What we need more are warehouses. The warehouses must be temperature controlled, not four walled. Those are houses, and so, we have started now.

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