Review of Budgeting and Funding of the Agriculture Sector in Nigeria 1970

8/2/2019 Review of Budgeting and Funding of the Agriculture Sector in Nigeria 1970

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REVIEWOFBUDGETINGANDFUNDINGOFTHEAGRICULTURESECTORINNIGERIA19702010

By

DavidAdama

5EsighiStreet,OffBateba,Calabar,CrossRiverState

[email protected]

ExecutiveSummary

Thedenialoftherighttofoodcompromisespeoplesabilityandcapacitytoachieveallother

rights. To fight the scourge of hunger we must address its causes rather than alleviate its

symptoms. In spite of the growing importance and reliance on oil, Nigeria has remained

essentially an agrarian economy accounting for significant shares in the Nations Gross

DomesticProduct (GDP) and total exports aswell asemploying the bulkof the labour force.

Available statistics showed that prior to Nigerias independence in 1960, agriculture

contributed substantially to the GDP which was about 60%, usual for developing countries.

However, as the year goes by, agricultures contribution to the GDP fell to only about 25%

between 1975and1979, thiswasattributed to thegrowthof theminingand manufacturing

sectors. AsNigeriasGDPratedeclined,soalsowasthegrowthrateforagriculturalproduction.

The Agriculture sector has had several policy documents which had highlighted government

position and commitment to funding and implementing sustainable agriculture. Of all the

severalpoliciesofgovernmentTheaswellbutofnoteandcommendationistheNationalFood

Security Programme which was developed three years ago with ample policy direction and

fundingexpectationsthoughwithoutfigures.

Fundingfor

the

agricultural

sector

has

not

been

within

aparticular

budgetary

trend

based

on

data available which is worrisome. Data from 1960 to 2001 showed that the Federal

Government of Nigeria implemented the incremental1 budget system of which budgetary

figures were simply added to the previous budget irrespective of the programmes being

undertaken. One therefore takes for granted that every ministry of government will benefit

fromthislarges.Thiswasnotthecasewiththeagricultureandwaterresourcesweretheir

budgetaryallocationsfluctuatedlikepowersupplywithoutaclearbasisforthisfluctuations.

Until2001,AgricultureandWaterResourceshadtheirvariousbudgetheadbeforebothwere

merged to form what we have today as Federal Ministry of Agriculture and Water

Resource(FMAWR). I would assume the merger was for effective coordination and

administrative

convenience

rather

than

operational

convenience

as

it

shows

that

the

individual

ministries prior to 2001 enjoyed better budgetary allocation as compared to what transpires

todayasindividualentities.

1Incrementalbudgetingwhichwasbasedonpreviousallocationandutilizationofbudgetaryallocationwas

operationalbytheFederalandStatesgovernmentinNigeriapriorto2004whentheMediumTermExpenditure

Framework(MTEF)wasadopted.


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Nigeriasbudgetaryallocationandutilization has risen over 3,600%between1990and2010.

The budget has grown nominally over the years but in real terms, there has not been real

growthbecauseofinflationandvalueformoneyexpenditure.Withintheperiodunderreview,

agriculturehashaditsfairshareofthebudgetaryallocation.Inthelast10yearsofdemocracy,

thesectors

budget

has

grown

by

475%

which

may

however

only

be

nominal

growth

rather

than

realvaluegrowth.

Despite the over 3,600% increase in budgetaryallocationbetween1990 and 2010, there are

stilllargefundinggapswhichneedtobeaddressedtoeffectivelyimplementthemanypolicies

and blue print that various governments have developed. Like every other sector in Nigeria,

Agriculturalfundinghasbeendictatedbytheinterestandagendaofthegovernmentinpower.

Nigeriahasexperienceda greatnumber of agricultural policy documentswhich has equalled

thenumberofadministrationsthecountryhashad.Almostalltheregimeshavecomeupwith

oneagriculturalpolicyortheotheryettheyarenotsufficientlyfunded.Thequestiontherefore

ariseswhywerethesepoliciesdeveloped?

Inmostcases,thesepoliciesdevelopedbythesamegovernmentshavenotbeenimplemented

to the later based on poor and inadequate budgetary allocation as evidence in the annual

budgetaryallocation.Theevidentdearthoffundingtotheagriculturalsectorisagelongandas

oldasindependence.Despitetheinadequatebudgetaryallocationtothevarioussectors,the

issueofabsorptivecapacityoftheMDAshasremainedamajorissue.

Thisstudytherefore isareviewofFederalGovernmentofNigeriasbudgetingandfundingof

governmentprogrammesvisavisagricultureexpenditurebetween20002010.

Thetable

below

shows

Nigerias

budgetary

allocation

and

expenditure

pattern

in

the

last

ten

years.

Table1.SummaryofFederalGovernmentExpenditure20002009(=N='Million)2

Year RecurrentExpenditure CapitalExpenditure Total

2000 461,600.00 239,450.90 701,050.90

2001 579,300.00 438,698.50 1,017,998.50

2002 698,800.00 321,378.10 1,020,178.10

2003 984,300.00 241,688.30 1,225,988.30

2004

1,032,700.00

351,300.00

1,384,000.00

2Thisexcludesinterestpaymentsondebtservice,othertransfersandextra

budgetaryitemsandcapitalrepaymentondebtservices,othertransfersandnet

landing


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2005 1,223,700.00 519,500.00 1,743,200.00

2006 1,290,201.90 552,385.80 1,842,587.70

2007 1,589,270.00 759,323.00 2,348,593.00

2008 2,117,400.00 960,900.00 3,078,300.00

2009 1,964,267.00 562,373.1 2,526,640.10

20103

3,310,343.38

883,874.50

4,194,217.88

Source:CBNStatisticalBulletin(2003,2007,2009and2010),BudgetOfficeoftheFederation;

BudgetPerformanceReport(2009)

The attendant nominal growth of the Federal budget has however not being realistic and

programmeoriented

with

the

annual

increases

addressing

only

recurrent

expenditure.

It

thereforeputtotheforetheimportancegovernmentplacesonissuesthataffectthepoorand

inmanycasessmallholder farmers.Analysisofseveral fiscalmanagementreportsshowsthat

theincreasehasnotbeendeliberateneitherhasittargetedsectorsthatcontributetopoverty

reduction and wealth creation. Within the period under review (20002010), recurrent

expenditurehasincreasedbyover475.6%whilecapitalexpenditurehasincreasedby234.9%of

thetotalbudgetsizeforthefiscalyears20002010creatingaratioof2:1.

Starting from colonial to post colonialNigeria, several agricultural policies documents have

beendevelopedbysuccessivegovernment.Despitethenobilityoftheseagricultural(policies)

programmes,onlypartsoftheseplanshavebeen implementeddueto inadequatefundingof

theplans.

Analyses

of

budgetary

documents

have

shown

that

the

funding

gap

for

this

sector

3Thisincludesinterestpaymentsondebtservice,othertransfersandextra

budgetaryitemsandcapitalrepaymentondebtservices,othertransfersandnet

landing

0

500000

1000000

1500000

2000000

2500000

1 2 3 4 5 6 7 8 9 10 11

(=N=Millions)

SummaryofFGNbudgetexpenditure20002009

Year

RecurrentExpenditure

CapitalExpenditure


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datesbacktothe1958whenpetroleumwasdiscoveredincommercialquantity.Thetrendhas

howeverchangedwithinthelast10yearswithagrowthrateofover475%between2000and

2010.

Percentageanalysisofagriculturalspendingshowsthatbudgetaryallocationandutilisation in

thesectorfluctuatesupwardanddownwardbuthasneverreachedtheminimum investment

requirement

of

at

least

10%

set

by

the

heads

of

government

of

Africa.

Records

were

not

available to review 2007, 2008, and recurrent for 2009. However, 2009 utilization is

commendableand feetshouldbemaintained.Thedataaboveshows thatagriculturebudget

expenditurehasactuallygrownwithinthelastthreeyearsabove200%andalsoimprovement

ofbudgetimplementationperformanceto83%.

Howeverthereisaseriousconcernwithagriculturebudgetbasedonitconstantfluctuationsin

budgetaryallocation. It istherefore imperativethatthemuchtalkaboutfightingpovertyand

hungercanonlybewonandsustainedifadequatebudgetaryprovisionsaremadeandutilized

withintheComprehensiveAfricaAgricultureProgramme(CAADP)

1.0Introduction

Thedenialoftherighttofoodcompromisespeoplesabilityandcapacitytoachieveallother

rights. To fight the scourge of hunger we must address its causes rather than alleviate its

symptoms. In spite of the growing importance and reliance on oil, Nigeria has remained

essentially an agrarian economy accounting for significant shares in the Nations Gross

DomesticProduct (GDP) and total exports aswell asemploying the bulkof the labour force.

Available statistics showed that prior to Nigerias independence in 1960, agriculture

contributed

substantially

to

the

GDP

which

was

about

60%,

usual

for

developing

countries.

However, as the year goes by, agricultures contribution to the GDP fell to only about 25%

between 1975and1979, thiswasattributed to thegrowthof theminingand manufacturing

sectors. AstheGDPratedeclined,sowasthegrowthrateforagriculturalproduction.

InNigeria,budgetaryallocationtosectorsandMDAsaregenerallynotbasedontheimportance

ofthesectorstothenationseconomyneitheritscontributiontotheGrossDomesticProduct

(GDP).RathertheyarebasedontheabilityoftheMinistry (Minister)tonegotiate, lobbyand

fightitscasewiththelegislature.ThisisevidenceinthebriberycasewhichinvolvedtheFederal

Ministry of Education paying over fifty million naira to the legislature to allow the ministrys

budget scale through without been cut down and a similar scenario reported by one time

Minister

of

Federal

Capital

Territory

in

2005

4

.

According to the 2007 report on poverty National Bureau of Statistics (NBS) Nigeria has a

populationof72millionpeople livingbelow the$1markadaywiththeseveralarable lands

4FabianOsuji,OnetimeEducationMinisterwhowastriedalongside6othersforbribestomembersofthe

parliamenttothetuneof$400,000toensureeasypassageofhisbudgetnottheinterestofeducational

development.


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availabletothepeopletofarmandmakeendsmeet. ThetargetoftheUnitedNationsthrough

MDGgoal1 is tohalveextremepoverty andhunger by2015ofwhichNigeria isasignatory.

Achieving goal 1 of the MDGs by 2015 is a tall order which therefore presupposes that

governmentbudgetaryallocationtosectorsthatwillcontributetotheachievementofthisgoal

willbeadequatelyfunded.ThisisrathernotthecasewithmanycountriesincludingNigeria.

Generallyin

Nigeria,

there

is

anotion

by

most

MDAs

that

no

sector

is

adequately

funded

no

matterthebudgetaryallocationforthatparticularyear.Thecountrysbudgethasincreasingly

increased from billions of naira to trillions of naira. How has the continued increase of the

budget yearin year out affected the common person in the street visavis their economy?

Between 1990 and 2009, Federal Government budgetary expenditure has grown from 701

millionnairato2,526trillionnairawithover3,600%increase.

In the developed countries, budgetary allocation is dependent on the policy position of that

administration or government. Linking policy planning, development and funding in Nigeria

wouldnotbeoutofperspective.Comparativelythelastthreeyearshasseenlinkagesbetween

policypositionandbudgetaryallocationhowevereffective implementationof thisallocations

remainsachallenge. Just like inthepreandpostcolonialera,severalagriculturaldocuments

weredeveloped.Withinthelast10years,Nigeriahasdeveloped2majorpolicydocumentsthat

gave direction to government funding pattern. These documents includes the National

EconomicEmpowermentandDevelopmentStrategy(NEEDS1&2)5,andVision20:2020

6.These

documentssupposedlydictatea roadmapand fundingparameters formostofthesectorsof

whichagricultureisnotleftout.BothNEEDS1&2andtheVision20:2020documentsidentified

agriculture as a key driver of growth, wealth creation and poverty reduction. However the

budgetaryprovisiontoagricultureandwaterresourcesasadriverofgrowth,wealthcreation

and poverty reduction within the operational period of these documents are far from being

realised.

2.0Budget

to

the

agriculture

sector

(colonial,

post

colonial,

2000s)

The Agricultural sector remains the largest nonoil contributor to the Nigerian economy,

accounting forover38%of foreignexchangeearnings,andemployingover60%oftheactive

forceofthecitizen(FMA&WR,NationalFoodSecurityProgramme2008).

Theprecolonialeconomystrivedbasicallyonagricultureasthemainstay.Basedonthenon

formalandadhocnatureofthesector,colonialandearlypostcolonialbudgetingandfunding

of the agriculture sector was more focused on research rather than production of services.

underscoring the first Nigeria developmentplan in the funding of theagriculturalsector, the

plan emphasized the introduction of more modern agricultural methods through farm

5NEEDSwasNigeriasNationalEconomicEmpowermentDevelopmentStrategywhichwasdesignedbythethen

ObasanjoAdministrationasthestrategicguideforeconomicandsocialdevelopmentinNigeria.

6Thevision20:2020policywasoriginallyarticulatedduringtheOlusegunObasanjoadministration(19992007)to

makeNigeriaoneofthetwentylargesteconomiesintheworldbytheyear2020.Vision2020economic

transformationVision2020drewitsoriginfromNigerianEconomicEmpowermentandDevelopmentStrategy

(NEEDSI&II)andthesevenpointagendaofPresidentUmarYarAduda.


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settlements, cooperative (nucleus) plantations, supply of improved farm implements (e.g.

hydraulichandpresses foroilpalmprocessing)andagreatlyexpandedagriculturalextension

service. Some of the specialized development schemes initiated or implemented during this

period included: Farm Settlement Schemes; and National Accelerated Food Production

Programme(NAFPP),launchedin1972.Therewerealsoanumberofagriculturaldevelopment

intervention

experiments,

notably

Operation

Feed

the

Nation,

launched

in

1976;

RiverBasin

and Rural Development Authorities, established in 1976; Green Revolution Programme,

inaugurated in 1980; and The World Bankfunded Agricultural Development Projects (ADP).

While each of the above programmes sought to improve food production, the ADPs

represented the major practical demonstration of the integrated approach to agricultural

developmentinNigeria.

Despite the nobility of these agricultural programmes, only parts of these plans have been

implementeddueto inadequatefundingoftheplans.Analysesofbudgetarydocumentshave

shown that the funding gap for this sector dates back to the 1958 when petroleum was

discovered in commercial quantity. The trend has however changed within the last 10 years

withanominalbudgetgrowthrateofover475%between2000and2010.

Table2:SummaryofAgricultureBudgetsandExpenditures19772010(=N=Millions)

Year RecurrentExpenditure CapitalExpenditure Total

%tototal

budget

1977 19.5 105.5 125 0.81

1978 19.2 128.4 147.6 1.2

1979 34.3 321.9 356.2 4.2

1980 32.5 435.1 467.6 1.7

1981 33.9 775.1 809 7.0

1982 34.1 1,035.10 1,069.20 8.3

1983 29.3 1,185.20 1,214.50 10.0

1984 32.8 252.5 285.3 1.7

1985 32.7 985.4 1,018.1 8.5

1986 32.9 892.5 925.4 8.3

1987 29.2 365.1 394.3 0.02

1988 54.3 595.7 650 4.54

1989 81.1 981.5 1,062.6 3.9

1990 208.1 1,758.50 1,966.60 5.4

1991

121.1

551.2

672.30 1.9

1992 161.5 763 924.5 1.7

1993 1,015.30 1,820.00 2,835.30

2.5

1994 919.0 2,800.10 3,719.10 3.3

1995 2,236.00 4,691.70 6,927.70

4.5

1996 3,892.80 5,574.00 2.9


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1,681.20

1997 1,682.20 6,247.40 7,929.60

2.8

1998 2,963.80 8,876.60 8,876.60

2.4

1999 31,347.20 6,912.60 561.900.15

2000 4,834.70 5,761.70 751.40

0.11

2001 7,064.90 57,879 64,943.90

6.3

2002 12,439.40 32,364.40 4,313.60

0.36

2003 7,534.30 8,510.90 16,045.2

1.3

2004

11,725.6

48,047.8

59,773.4

4.5

2005 10,858.8 79,939.4 90,798.2 5.0

2006 18,739.8 15,176.8 33,916.6 1.7

2007 NA NA NA

2008 NA NA

2009 NA 115,954.30

2010 NA NA

Source: CBN statistical bulletin, volume 14, Budget office of the Federation; (2009 BudgetImplementationreport)Percentage

analysis

of

agricultural

spending

shows

that

budgetary

allocation

and

utilisation

in

thesectorfluctuatesupwardanddownwardbuthasneverreachedtherequirementofatleast

10%. Records are not available to review 2007, 2008, and recurrent expenditure for 2009.

However, 2009 utilization is commendable and feet should be maintained. The data above

showsthatagriculturebudgetexpenditurehasactuallygrownwithinthelastthreeyearsabove

200%andalsoimprovementofbudgetimplementationperformanceto83%.

Table3.FederalGovernmentExpenditureonWaterResources19902000(N'Mn)

Year RecurrentExpenditure CapitalExpenditure

1990 NA 729.5

1991

NA

561.91992 NA 751.4

1993 NA 1,695.30

1994 NA 4,313.60

1995 NA 7,103.30

1996 NA 1,741.20

1997 NA 13,220.30


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1998 NA 11,390.80

1999 NA 6,923.90

2000 NA 13,529.90

NA=NotAvailable

Duetotheabsenceofdataonrecurrentexpenditure,itwasdifficulttoanalysethepercentage

commitmentof

water

resources

to

the

total

budget

for

the

years

in

review

prior

to

the

merger.

Source:CBN,StatisticalBulletinandAnnualReportvolume14,2003

3.0Agriculturalbudgetperformance(allsubsectors)

Analysisof

budget

performance

of

the

various

sub

sectors

within

the

Federal

Ministry

of

Agriculture(FMA)seemsacumbersometaskinthatdataavailablearesummedintoFMA&WR

ratherthanthevariouscomponents.Thisthereforelivesnooptionthantoreviewthegeneral

budgetperformancefortheministry.

Apart from the challenge of inadequate budgetary allocation to most Federal Government

Ministries,DepartmentsandAgencies (MDAs),thereappeartobeamajorconcern inbudget

implementation. From documented analysis, it does seem that there is shortage of human

capacity(skills)andassuchabsorptivecapacityoftheMDAs is limitedtoevenabsorbthefar

cried budgetary allocation to the MDAs. Analysis of the budget performance review has

indicatedthatnofewerthan60%ofFederalMDAsareoftenabletoutilizeupto50%oftheir

annual

budget

even

when

their

projects

are

cash

backed.

With

the

growth

of

the

agriculture

budgetwithintheperiodunderreview,theagriculturesectorhasremainedundoubtedlyoneof

thefewMDAsthathavebeenabletosurpassthe50%markforbudget implementation.This

doesnotprecludethefactthatbefore2005theagriculturesectordidnotperformbadlyamong

theotherMDAsinitsbudgetperformance.AsreportedbytheBudgetOfficeoftheFederation,

agriculturebudgetimplementationperformancehasthoughimprovedbetween2006from44%

to 83.59% in 2009 putting her amongst the most performed MDAs in the 2009 budget

performance review (Table4). It is commendable tonote that FMAWRhad the secondbest

0

2000

4000

6000

8000

10000

12000

14000

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000

Capital

Expenditure,

13,529.90

AxisTitle

SummaryFGNCapitalExpenditure

WaterResources19902000


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budget implementationperformanceafterworks in2009.The lowbudgetutilizationamongst

governmentMDAsisworrisomeasthenonperformanceorbudgetutilizationbysomeofthese

MDAshaseffectand implicationson theperformanceofothers. Asreflectedbythevarious

budgetaryperformancereport,theFMA&WRisnotandexceptiontothistrend.Reviewingthe

improved budgetary implementation performance of the agriculture sector in the last few

years,one

may

need

to

look

at

policy

development,

implementation

and

leadership

style

and

approach.ThepoorbudgetperformanceamongsttheMDAs,thosenothoweverprecludesthe

fact that budgetary provisions have been adequate and sufficient. The dearth of data from

BudgetOfficeof theFederationhasmade ithoweverdifficult toanalyses if truly thesectors

budget implementation performance has really improved between 2000 and 2008 as

comparedtothereportfor2009.

Table4.Budgetperformanceforcapitalexpenditurefor2009amongstselectMDAs

MDATotal ReleasesTotal CashBacked TotalUtilization %

UtilizationPolice

Formation

/Commands

Power

Transport

Health

Agriculture &

Water Res

Education

Defence

Works

NigerDelta

21,324,630,000

39,599,212,715

38,402,031,359

48,643,289,834

138,824,895,686

36,386,571,952

47,302,887,338

209,093,840,018

48,000,000,000

21,324,630,000

39,599,212,715

25,902,031,359

48,658,789,834

138,724,895,686

36,372,321,952

47,302,887,338

209,093,840,018

48,000,000,000

13,142,984,730

10,143,106,694

22,578,206,651

24,509,417,925

115,954,374,024

23,719,577,628

38,883,477,145

99,382,926,917

31,943,273,606

61.63%

25.61%

87.17%

50.37%

83.59%

65.21%

82.20%

47.53%

66.55%

60.59%AverageUtilisationbyallMDAs

Source:2009BudgetImplementationReport(BudgetOfficeoftheFederation)

Compared to other sector under review, the Agriculture sector performed creditably well in

terms of expenditure. In 2010, their performance level dropped from 83.59% to 66.91%. no

concretepositionhasbeenmadeavailableonthedecline.Undertakingabeneficiaryanalysis,

youwillagreethatmostofwhatisprovidedforistosubsidiesbigfarmersintermsoffertilizers


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andotherfarminputagainstthebackdropofsmallholderfarmersandinparticularwomen.The

other challenge associated with government budgets and expenditure is the fact that it is

genderblindandmakesitdifficulttoanalysehowvariousgroupsbenefit.

4.0SpecialInterventionFunds(crop,livestock,fisheries,waterresources,ruraldevelopment,

etc)

AspartofthegovernmentspolicypositiononNationalFoodSecurity,theSpecialIntervention

Fund (SIF) was established to provide funding to augment FGN budgetary provision for the

sector. The idea of the special Intervention Fund is that of a joint funding stream from

development partners, the World Bank (FADAMA), Islamic Development Bank, African

Development Bank, International Fund for Agricultural Development (IFAD), Food and

Agricultural Organisation, Debt Relief Gains (MDGs) as well as a part for counterpart or

matchinggrantwhichisusuallycapturedintheMDAsallocation.

In 2006, the Ministry of Agriculture benefited from the Millennium Development Goals and

Debt Relieve Gains allocation to a tune of Nine billion Four hundred million Naira only

(N9,400,000,000)outofwhichonlyEightbillionSevenhundredmillionNaira(N8,700,000,000)

wasdisbursed.AlsoWaterResourcesgotEighteenbillion,SevenhundredandSixmillion,Nine

hundred and Sixty Two thousand Eight hundred and Fifty Five thousand Naira only (

N18,706,962,855).Outofthetotalallocation fromtheMDGs/DRGs fundforAgriculture,57%

(N5,000,000,000)wasexpendedonintegratedruralroads.

Reviewing implementation framework for 2009, the government is expending over One

hundredandsixtytwobillionnaira(N162,000,000,000)fromtheSpecialinterventionfundand

anotherFiftyNinemillionUnitedStateDollars.

Table5.SpecialInterventionFund2009

SN PROGRAMME/PROJECTS SOURCE OF

FUND

AMOUNT RESPONSIBLE

DEPARTMENT/

AGENCY

AgricCadastre SIF 4,040,000,000 FDA

SoilSurvey SIF 600,000,000 FDA

Landclearing SIF 24,000,000,000 FDA

IrrigationInfrastructure SIF 16,500,000,000 DID

Livestock Breeding and

MultiplicationCentres

SIF 540,000,000 FDL

NationalPest

Control

SIF

1,500,000,000

FDL

AquacultureDevelopment SIF 2,000,000,000 FDL

Construction and Completion of

Silos

SIF 52,000,000,000 NFRA

AgroExportConditioningCentres SIF 3,000,000,000 NFRA

CassavaProcessing SIF 1,000,000,000 NFRA

RiceProcessing SIF 10,000,000,000 NFRA


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SIF

NationalAbattoirMgtandDevt. SIF 4,540,000,000 FDL

FoodandAnimalFeedProduction SIF 3,500,000,000 FDL

Dairy&ColdchainDevtProg. SIF 2,000,000,000 FDL

GuaranteeMinimumPrice SIF 28,000,000,000 NFRA

Marketinfrastructure

Devt.

SIF

3,570,000,000

NFRA

ResearchandDevlopment SIF 6,000,000,000 ARCN, RIs, FCAs &

NASC

FADAMAIII IDF USD50M NFRA

Rural Finance Institution Building

Prog.

IDF 100,000,000,000&

USD9.8M

NFRA

Total 162,890,000,000

USD59.8M

Source:2009Budgetimplementationframework,FMA&WR

Analysisof

the

Special

Intervention

Fund

has

revealed

that

the

fund

has

made

more

impact

on

agriculturefinancingmorethanthetraditionalbudgetbytheministry.Thisisnotfarfromthe

fact the partners and donors have reporting requirement and work plans which makes it

mandatory for the ministry to report. Analysis also shows that some of this budget heads

providedforbysomeofthedonorsordevelopmentpartnersareduplicatedintheMinistryof

Agricultures budget as they are not captured in some cases and reported in the ministrys

budget.

Thisthereforecallsforspecialattentiontothefactthattheprocessformakingthebudgetfor

suchsensitivesectorsshouldbemoreparticipatoryandrobust.

The other issue associated with the special intervention fund is the tendency to make

governmentshyaway from itsmandateandresponsibility in funding thesectorsincedonorsand other development partners are already providing support to the sector. It is therefore

necessary for the entire special fund to be appropriately and adequately captured in the

Agriculturesectorbudgettoavoidduplicationoffunctionsandwasteofscarceresources.

5.0ChallengestoAgriculturefinancinginNigeria

Thegrowthofagriculturalfundingwithinthe lasttenyearshasnotbeingwithoutchallenges.

Someoftheobstaclesonthewaytoagriculturaldevelopmentincludepolicyandfundingissues

aswellasothernaturalissues.

The

agricultural

sector

has

been

beset

by

several

challenges

which

have

greatly

affected

its

growthandcontributiontothenationaleconomy.Manyofthesechallengesinclude;

Absenceofeffectiveparticipationoffarmersandbenefittingcommunitiesinagricultural

programmes and projects design and implementation. The constant development of

agriculturalpoliciesexcludingthemajorstakeholdersandbeneficiarieshashad it tool

onmanyoftheagriculturalpoliciesasthereislittlebuyinbythevariousgroupsoutside

government.


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Poorarticulationandimplementationoflocallyinitiatedprogrammes:Overthelasttwo

decades,manyoftheagriculturalpolicieshavebeenborrowedfromothercountriesor

development institutions. As such, we have hardly been able to spend time and

articulatehomegrowninitiatives,programmesandimplementthemtothelater(NEEDS

1&2).

Raw and wrong adoption of external agricultural initiatives: Many of the agricultural

policies we have implemented in Nigeria have been developed by bilateral or

International Financial Institutions (IFIs) who brought in these programmes based on

theirinterestandnottheinterestofthebenefitingstateorgovernment(e.gStructural

AdjustmentProgrammeSAP)

QuicksuccessionandturnoverofMinister(s)intheministry:InNigeria,itiscommonto

seeMinistersstaylesstwoyearswhichislikeaminimumtobeabletomakeevenany

policymovementnottotalkofimplementation.Likeeveryothersector,theAgricultural

sector has suffered immensely based on frequent change of Ministers. With Nigerias

desiretojointhe20largesteconomyby2020,itisimportantthatweallowthesector

growthroughappointingrenownedindividualswhocanoneadministrationforeffective

policyimplementationinthesector.

Poor linkages between sector strategies and budgetary allocation: one of the big

problemswithPublicFinanceinNigeriaisthepoorlinkagesbetweensectorstrategyand

budgetaryallocations.This isevidence in thearbitraryallocation tosectorsbyBudget

OfficeoftheFederationirrespectiveofsectorsprioritytotheNationanditsimportance

to the economy. There is no reason why agriculture should lack funding if policy

documents

and

sector

strategies

are

based

on

in

allocating

resources.

It

is

therefore

imperativethatmeasuresmustbetakentolinkbudgetaryallocationstosectorsstrategy

ifmustmakeanydifferenceinthefuture.

The absence of finetuning mechanism of macroeconomic and agricultural sector

policiestomeettheneedoffarmersandinvestorsintheagriculturalsectorislackingin

Nigeria.Despitethemanyagriculturalresearch institutionsanduniversity,theministry

of agriculture develops it policies documents without inputs from the public. The

essenceoftheagriculturaltertiaryinstitutionsissupposedlytofinetunethecrudeideas

that may arise in the cause of agricultural design and implementation. Based on our

initial

statement

on

borrowing

external

policies

and

programmes,

it

is

inevitable

to

always engage with professionals and these institutions to finetune our policies

positionsbasedonempiricalfindingsandevidence.

Liberalizationofthemarketthatallows food import:This istheprocessof freertrade

without any restrictions allowing food importation into the country barriers or

restrictions.Thisprincipleisbasedonthelogicthatwhenindividualtraderscompeteto

sell goods without any restrictions, the consumer is the first person to be benefited.


13/14

However,thisideaisdeeplyrootedinthefreemarketcapitalisteconomicsystem,which

views citizens as mere consumers and disregards National economies & sovereignty.

With technological advancement in the developed and developing countries, it is not

difficulttoguesswhowillultimatelybenefitfromtheopeningofthemarket.

Inadequate

availability

of

farm

inputs

to

farmers

has

remained

a

major

challenge

to

smallscalefarmersinNigeria.Thechallengehasbeenthatofgovernmentnotproviding

atallorprovidingforthoseingovernmentwhoareintofarmingleavingthepeoplewho

needitthemosttobestrandedtherebyaffectingtheiryieldandproductivity.

Absenceofaccesstofarm landsbysmallscalefarmersandwomen:Womenmakeup

themajorityofsmallholderfarmers inmostdevelopingcountries.TheUNsFoodand

AgricultureOrganization,(FAO),estimatesthatatleast80%ofruralsmallholderfarmers

worldwidearewomen.Despitetheirsignificantrole inagricultureandhouseholdfood

security,womenfarmershavenotreceivedthesupporttheyrequiretothrive.Research

indicationsshowthatwomenarenotrecognizedasfarmers intheirownrightbytheir

ownfamilies,orcommunities,letalonebygovernmentsordonors.Whilethereisalot

ofrhetoricthatmentionswomenasthemajorityoffarmers,rhetoriciswhatitremains

and thespecificneedsof thesewomenareoverlooked inpolicy, legislation, research,

extensionoranyformofsupportextendedbygovernmentsortheiragencies.

Absenceofmicrocreditatlowinterestratebackedbygovernmentguarantyisamajor

challengetowhymanysmallscalefarmersoreventhebigtimefarmerscannotaccess

approach the banks for credit to finance agricultural development. If farmers are to

access agricultural loan from commercial banks, government at the Federal andState

levelmustbeabletoguarantytheloanswiththesebanks.

6.0Conclusions

ThedevelopmentandgrowthoftheNigerianeconomyremainsundoubtedlydependentonthe

growth of the agricultural sector. This sector has great potentials if effectively financed to

providemassivejobopportunitiestotheteemingunemployedNigeriansaswellasprovidethe

rawmaterialsforindustrialandagriculturaladvancement.

The actualization of the Vision 20:2020 can be put back on track if only government will be

sincere

to

fund

the

current

policy

positions

on

agriculture

amongst

which

is

the

current

policy

document on National Food Security Programme. The present National Food Security

Programmeaspreparedhasidentifiedtheneedtorevolutionalisecommercialagriculturealong

the concept of intensification and the value chain approach. Undoubtedly, this will enhance

food production with positive economic chain effects in the area ofjob and wealth creation

acrossthecountry.


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Agriculturestillprovidesthemainsourceoflivelihoodfor80to90percentofthepopulationin

manycountriesNigeriainclusive.Increasingtheirincomeswillbringruraleconomiesbacktolife

andgeneratemorejobsforotherpoorpeopleandincreasedemandfordomesticallyproduced

goods and services. Greater numbers of ruraljobs and increased incomes generally lead to

improved nutrition, better health, and increased investment in education, while increased

revenues

allow

local

governments

to

respond

to

demands

for

better

infrastructure,

such

as

ruralroads.

While addressing the bigger issues across the agricultural sector, investment in smallholder

agriculture and women is not only the way to beat hunger, but the best path to economic

recoveryandresiliencefordevelopingcountries.

Documents

Review of Budgeting and Funding of the Agriculture Sector in Nigeria 1970