IFAD BOSS, DR. KANAYO NWANZE, SPEAKS ON HOW TO DIVERSIFY NIGERIA’S ECONOMY THROUGH AGRIBUSINESS

Dr. Kanayo Nwanze, President, IFAD

Seventy-year old Dr. Kanayo Nwanze of Nigeria is the President of International Fund for Agricultural Development (IFAD), based in Rome, Italy. He is currently in the country on a working visit. In this interview, he discusses strategies capable of assisting the current administration in diversifying the nation’s economic base, through investments in agriculture. Sit back and enjoy it.

Can you please briefly give an operational profile of your organization?
The International Fund for Agricultural development (IFAD) is an institution with headquarters in Rome. It is a specialised agency of the United Nations. It is also an international financing institution that provides assistance to governments and institutions in financing agriculture development. We currently operate in about 90 countries worldwide but sub-Saharan Africa receives the largest share of our investment, close to 50 per cent on annual bases. We have an operational budget for our programmes on the average of $1 billion a year, highly concessional loans and bonds globally.

What the government must do in Nigeria, apart from putting in place the right policies, is to also have to provide infrastructure, like basic roads, health services, schools, electrification and water. Any government that is not able to provide any of these, has no legitimacy, it is as simple as that.

We currently have 42 country offices; one of them of course is in Abuja, Nigeria. Half of the offices are in sub-Saharan Africa and other six or more in Asia, Latin Africa America North Africa. We provide financial assistance to finance institutions, organisations, we also fund agricultural research efforts, working with relevant institutions. We also provide input for increased productivity, capacity building of farmers. We work with private sector to link farmers with the market. We also concentrate on infrastructure and social services. So, basically, we are an agriculture rural development agency.

What’s IFAD’s relationship with African Development Bank?
African Development Bank is one of our top co-financing institutions. We have projects that we finance together like here in Nigeria and other African countries. We have co-financing arrangements with the World Bank, Asia Development Bank, OPEC Fund, among others. We work directly with governments which makes us have legally binding agreements with governments while actualising a financing deal, because we don’t give loans to individuals but governments take loans and make refunds and these are highly professional loans payable over 40 years and you have 10 years grace period.

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In agriculture, the rural sector produces, the urban population consumes. Yam does not grow in cities, cassava does not grow in cities, and they grow in rural areas and that’s where you have to invest for your agriculture.

The present administration is strategising to make agriculture a strategic focus for job creation. How can the government go about this and has the administration approached IFAD on this? We work very closely with the government. The project I visited in Akwa Ibom last Monday is one of the schemes in six states that are benefiting from the value chain development programme. The project I signed with the then Minister for Finance in August 2012 was focused on the transformation agenda and we worked closely with the Minister of Agriculture at that time, Dr. Akinwunmi Adeshina. Of course, there was an unfortunate delay of two years. The project is being implemented through the Federal  Government.

I know it is the wise decision to give agriculture priority because going back some 50 years ago, this country was an agricultural economy, having about 50 per cent of its people working in the in agricultural sector. The potential of agriculture is huge because it is the largest employer of labour. It feeds people, create jobs and consequently provides incomes for the people. If you have all of those together in a sector of your economy, you have a tremendous potential. A country like Ethiopia is an agricultural-based economy. In the 80s, Ethiopia was a like a hopeless country.

Today, Ethiopia is one of the fastest growing economies in the world, courtesy of its vast agricultural development programme. Ethiopia has the largest heads of cattle, is the largest producer of honey, one of the few shoe making countries in Africa and the economy is growing at about 8 to 10 per cent yearly.

In Nigeria, we must not just make agricultural development a priority on paper, but we should work assiduously to make it a reality. There must, for instance, be rural roads, electrification, water, just as the government in Ethiopia did when it strategically decided to focus on agriculture for its growth and development. What the government must do in Nigeria, apart from putting in place the right policies, is to also have to provide infrastructure, like basic roads, health services, schools, electrification and water. Any government that is not able to provide any of these, has no legitimacy, it is as simple as that.

It is good you mentioned the example of Ethiopia, but there is this issue of subsidy for agricultural production. What is your take on this?
When you say subsidy, what exactly are you talking about? Europe subsidises its farmers. The subsidy that European countries and some other developed economies give to farmers is about 10 times the total of development assistance they give to the developing world. So, what are we talking about? Why should American farmer get a subsidy for not growing a crop to maintain prices? Why does he get subsidy to grow maize that will be used for fuel production? And then you don’t want an African farmer to be subsidised by its government? It does not make sense. There has to be smart subsidy.

But when you create job opportunities in the cities and you neglect rural development, the rural population will migrate and then you end up having large cities with increased number of slums. And so, the government has to develop the rural areas to promote agricultural development on a sustainable basis and thereby achieve a strategic balance between urban and rural growth.

You have to understand the whole process. When you provide subsidy for farmers, it has to be an incentive for them to produce or not to produce. But they must have a market. It is not enough to give subsidy and fertilizer to farmers to produce and 50 per cent goes to waste because of poor storage or no roads to transport their produce to the market. Not just subsidy. Zambia decided to provide subsidy to its farmer but the donor community said no and the president said yes and he did. And he went from one year to another.
There was three years of drought in early 2002 and by the second year, they were exporting maize. It was a smart subsidy. Farmers have to pay back. The government subsidised them to have input but they must pay back, otherwise government could go broke. When I was in Anambra State, some persons were telling me look at our ancient machine of 1970s, we need new machines. I was shocked.

I have not seen any part of the world I have gone to and farmers are still using polythene materials or cloth to dry their rice on the floor. Are you waiting for government to build drying ground for you? Those are basic things the farmers should address on their own without waiting for a handout from the government. We are too used to handouts. We expect government to do everything. It is not right. If I am going to provide subsidy for you to build drying floor, be sure you are going to pay me back with a per cent of your produce.

It is a law in nature. You cannot keep giving and giving or else you will go broke. You must receive in return. People think subsidies are handouts that are doled out to them without paying back. There are many approaches to it, many credit systems that exist. This country has potentials and I think we can make do with what we have.

You said sub-Saharan Africa takes more than 50 percent of financing. Why?
It is based on calculation on the level of rural poverty, the population of the country that is poor and the priority that government is giving to agriculture and the performance of previous IFAD projects. And sub-Saharan Africa is the only part of the world that the number of poor is increasing. We know where the demand is. The demand is higher in sub-Saharan Africa.

You also mentioned that the Nigeria’s agricultural sector has great potential for development. What have been the challenges militating against the realization of the potential?
I don’t think we have invested rightly in agriculture. You cannot expect a sector to be productive if you have not invested in it. What does IFAD expect, why do we invest in rural population? Because we believe it will help them to grow out of poverty, so in return, we expect rural transformation to take place, to pave way for agricultural development. In agriculture, the rural sector produces, the urban population consumes.

Yam does not grow in cities, cassava does not grow in cities, and they grow in rural areas and that’s where you have to invest for your agriculture. But when you create job opportunities in the cities and you neglect rural development, the rural population will migrate and then you end up having large cities with increased number of slums. And so, the government has to develop the rural areas to promote agricultural development on a sustainable basis and thereby achieve a strategic balance between urban and rural growth.

I will stress that our potential is very huge. All you have to do is to go back to the 60s. This country was largely an agricultural country. Our economy was highly dependent on agriculture. We produced groundnuts, we have many cattle heads, we were exporting timber, we have palm oil, and the Malaysians came to collect oil palm seeds and then improved on it.

Today, they are selling oil palm products to us. We suffered the Dutch disease like most other countries as we depended on oil and we did nothing with the money which eventually went into the pockets of some elites. I hope we are now waking up. President Buhari, when I saw him in August, made it very clear that Nigeria cannot depend on oil. We have to go and invest in agricultural sector. The former Minister of Agriculture initiated some laudable projects for the sector and he transformed the fertilizer sector. More farmers are benefitting from the decentralisation of agriculture. The present minister is a farmer himself, so he is a practical person and I am already working very closely with him. The potential is there but we are far behind.

This country still spend millions of dollars importing food. Sub-Saharan Africa alone still spend about $50 billion yearly importing food. What that means is that we are creating jobs for people outside this country to grow food for us whereas larger percentage of our population is unemployed. This does not make sense. We should have invested that in our agricultural sector. The government has to invest, provide counterpart funds for farming projects. There is no question in my mind about the agricultural potential of our country Nigeria. But it has to be done as a business. We need a change in mindset, when I am talking about agriculture, I am talking about agriculture business. From growing the crop to when it is in the market and you buy it and it becomes food. You look at agriculture as food system where along that value chain, there are huge opportunities for investment.

Agriculture is a business and government has no business in agriculture. Government has the business to provide basic infrastructure. Let those in agriculture invest in agriculture.

This is what the modern world does. It is not rocket science. I am now 70, my greatest regret is that I didn’t know all of these 40 years ago. I am telling you what I have seen with my own eyes travelling across the world. Farmers are being organised, they are linking with big buyers. They are selling their produce to the world market. Agriculture is a money making business. I am seeing farmers driving and owning good trucks, SUVs from agricultural proceeds. They are organised, working on their laptops, educated.

Talking about large scale farming, how do we address the issue of land use Act?
That is why government has a lot of role to play. Let’s get our priority right, government does not grow food. Government creates enabling environment to farmers and investors. Farmers cannot put land use policy in place, even if it is being approved, who is going to implement it? Is it the farmer? Do we have the institution that can implement and monitor implementation? Is that not the role of government, both state and federal? Why do we keep on bemoaning our problems when we know the solution ourselves?

From your own perspective, what is the problem of the country when it comes to managing resources?
It is all about leadership and followership. If you have a good leader, you must have good followers. President Buhari is a good leader and has good intentions. So, what we are saying that he needs support from his cabinet. The cabinet should comprise people who are good minded. The followership should give necessary support. Then, the changes will begin to take place. We discovered crude oil the same period as Norway, but today, we are getting aid from Norway. In the 60s, we provided aids to South Korea.

At independence, our GDP was higher than that of South Korea. Today, South Korea provides aids to African countries. There is no excuse. It is time for us to stop bemoaning our colonial heritage. 55 years after independence, what do we as a nation have to show? That is why I keep on calling on the younger generation that tomorrow belongs to them. The opportunities are huge on the farms and off farms. Do not consider agriculture as a poor man’s work. We have plenty of land to actualize our potentials. We need to stay away from our dependence syndrome. (Source: Guardian)