Nigeria: CBN Making Maize Affordable

21 January 2021

Recently, the Governor of the Central Bank of Nigeria (CBN), Mr Godwin Emefiele, initiated moves to crash the price of maize, a major staple on the dining table of most Nigerians. Part of this audacious measure is the plan to release about 300,000 metric tonnes of the commodity into the market from the strategic reserve of the Anchor Borrowers Programme (ABP).

The plan by the CBN is a follow up to the move by relevant critical stakeholders, working with relevant government and security agencies to put a halt to the inanities of speculators and other middlemen who have been manipulating the market, creating artificial scarcity in the process, hiking prices and making the commodity expensive and almost unaffordable.

Maize, this newspaper points out, is one of the most important staple foods in Nigeria and consumed by all in diverse ways. As a crop it can grow almost everywhere irrespective of the season. The crop is not only consumed as food in all regions of the country but has also become a raw material in manufacturing and agriculture- related businesses within and beyond the borders of Nigeria. It has grown to become a cash crop that has the potential, through agro-processing, to become a viable foreign exchange earner.

Maize, which is grown in several regions of the world and is referred to as the world's best adapted crop, has grown to become the fourth most consumed cereal ranked below sorghum, millet and rice and the third most important cereal after sorghum and millet.

In our considered opinion, it is important to note that the demand for the crop has been on the rise due to the fact that the grain is being used not just as food but also as feed in the poultry business. Furthermore, maize, it is pertinent to emphasise, is used industrially by flour millers, brewers, bakers of bread and confectionery and animal feed manufacturers.

Considering its versatile usage, and despite its high production volumes, experts are concerned that its cultivation had received minimal attention until recently. Surprisingly, maize farming in Nigeria yields an average of 1.8 metric tonnes per hectare (MT/Ha) which is one of the lowest among the top 10 maize producers in Africa. It lags behind countries such as Egypt and South Africa where the yields are 7.7MT/Ha and 5.3MT/Ha respectively making it difficult to totally meet the domestic and industrial maize demand.

With Nigeria's population expected to surpass 200 million by 2025, there is an expected increase in the demand for maize for both domestic and industrial consumption, presenting a golden opportunity for farmers and entrepreneurs to take advantage of.

However, in our view, this opportunity will be lost if there are no right tools that could engender the growth in efficient production of the crop. One of such tools needed is the right funding, particularly for farmers to ensure that they have all that is needed to improve yield per hectare.

Without doubt, funding has always been a challenge for farmers as well as agriculture value chain operators in Nigeria. But that is in the past now as the Central Bank of Nigeria (CBN) revives some of its agricultural financing schemes as well as new intervention funds to ensure adequate funding for the sector.

Among such is the Maize Aggregation Scheme which is a working capital facility that helps Agro-businesses purchase home-grown maize. The Maize Aggregation Scheme which is under the Anchor Borrowers Programme of the CBN has so far been yielding results. Maize farmers across the country have begun the aggregation of maize as farmers in Funtua, Katsina State, last week brought over 33,000 bags (100kg) of maize showcased in pyramids.

For the dry season cultivation this year, we commend the CBN for its pledge to support maize growers so as to bridge the gap created by what happened in the first six months because of COVID-19 and flooding. Already the apex bank is gearing to finance about 750,000 farmers with some other commodity associations. With this development, it is expected that the 2020/ 2021 season will be a very good year for maize production in Nigeria.

This is even more so with the commencement of the 2020/2021 dry season farming with a target of cultivating 400,000 hectares. It is hoped that as many farmers as possible would join the scheme to address the wet season shortfall.

The CBN has taken development financing a notch high in recent times because, like the fiscal authorities, it believes that diversifying the Nigerian economy will not only make her self-sufficient in food production and industrial raw materials, but also create jobs for its teeming youth population.

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