ActionAid, Small-Scale Women Farmers Organisation in Nigeria (SWOFON), ONE and the CAADP Non-State Actors Coalition (CNC) Press Conference on the 2024 Proposed Agriculture Budget

The analysis focuses on the proposed 2024 agricultural sector’s budget to x-ray how the Nigerian Agricultural sector is funded and positioned for growth, employment creation, domestic food requirements, and export promotion of quality processed agricultural commodities. We looked at (i) Budget adequacy and alignment with the CAADP framework, (ii) how the budget addresses the concerns of smallholder farmers, women, and youths (iii) Allocations for agricultural components such as irrigation, climate resilience and sustainable agriculture, value chain development, access to credit, extension services, mechanization, post-harvest loss reduction supports, etc. We also assessed the budget against some targets and key performance indicators of the Malabo Declaration around fund adequacy, goals on reducing post-harvest losses and using the agricultural sector to account for 50% reduction in poverty.

Percentage of Agriculture Sector Allocation from the Total Federal Government Budget (2017-2023)

At NGN362.9 billion, the budget for the agriculture sector is very low and represent only 1.32% of the total Federal Government Budget. The budget allocated to the agriculture sector has not exceeded two percent of the overall budget for the past seven years or more. Nonetheless, actual data has demonstrated that a sector's production in terms of social benefit to society increases with the amount of resources allocated to it. Enough support for the agriculture sector needs to be prioritized in the national budget since it is the sector that have the most potential to change the economy and employ the hordes of young people.

Budget Compliance to CAADP Framework (Malabo Declaration)

In accordance with the Maputo/Malabo Commitment, the amount should be ₦2.75 trillion if the government were to allot 10% of the ₦27.5 trillion budget for 2024. As a result, there is a massive deficit and shortage of ₦2.4trillion given the existing amount. The National Assembly should address the shortfall and push FG to adopt more effective methods for allocating and managing the budget, directing all associated savings towards the crucial agriculture sector. Some of the reasons why the government has not met this commitment are:

1.         Lack of political will

2.         Poor prioritization of the agricultural sector

3.         Inefficient and corrupt management of budgetary resources

Inflation and the Real Value of the 2024 Proposed Agriculture Budget

Even with the low allocation, considering inflation we are faced with, the real value or the purchasing power of the agricultural sector’s budget in 2024 is ₦285 billion with the set inflation rate of 21.4%. Although ₦362.9 billion was nominally budgeted for the sector, all things being equal, the budget amount will depreciate by at least ₦77.7 billion. To achieve the desired investment impact in monetary terms, the gap of ₦77.7 billion needs to be filled either by providing additional budgetary resources or reducing inflation to the barest minimum.

Comparative Review of Allocations to Federal Ministry of Agriculture & Food Security (FMAFS) Headquarters and other Agencies

For the year 2024, of the total N362.9 billion allocated to the sector, the Federal Ministry of Agriculture and Food Security - HQTRS got N124,158,278,469; that is 34.21%, while the other DAIs got N238,782,377,691 or 65.79% of the total budget. This is an impressive shift away from the norm where the Headquarters gets most of the allocations, leaving the other Departments, Agencies, and Institutions (DAIs) under FMAFS redundant and excluded in project management and programme implementation.

Development of Major Agricultural Value Chain by FMAFS and Her Department and Agencies (DAs)

Approximately N29.7billion has been allocated in the planned 2024 agriculture budget for the development and promotion of several value chains involving different crops, fisheries, livestock, etc. The growth of certain commodity value chains can support local food production, foreign exchange earnings, import substitution, etc. However, the Federal Ministry of Agriculture and Food Security's (FMAFS) sector offices would be responsible for carrying out the majority of this allotment (N28.7billion). This is abnormal since value chain development for fisheries, agriculture, and animals should not be carried out by the ministry’s administrative headquarters; rather, it should be responsible for regulation, monitoring, assessment, and coordination. The initiative is intended to be led by other DAs in the sector. Giving DAs with technical expertise in those sub-sector areas additional authority will be more efficient and productive.

Research and Development (R&D)

Public investment in agricultural research and development (R&D) is important for food security and environmental sustainability. Agricultural R&D is a crucial determinant of improvement in agricultural productivity. The agricultural sector has a strong repository of research, development, and academic institutions, however, due to poor prioritization, these institutions are not adequately funded. Some significant research & development institutions have received capital allocations totalling almost N234million. For instance, The National Centre for Agricultural Mechanisation- Ilorin received N93million and another ₦91.9million, the National Institute of Freshwater Fish- New Bussa received ₦20.3 million, and the National Agric. Extension Research Liaison Services- Zaria received ₦11 million. It should be remembered that research & development institutions are the agencies that carry out the implementation; hence, funding should be transferred to them while the primary Ministry focuses on policy formulation, regulatory, supervisory, and coordinating duties.

Extension Support Services

Extension services are necessary for smallholder farmers to learn about the market, become knowledgeable about contemporary technologies, and receive guidance on how to increase their output. Unfortunately, in recent years, there has been a decline in the amount of attention given to this agricultural productivity booster. The proposed budget for FMAFS and other Departments and Agencies to provide extension support services in 2024 is a mere N1.9billion. A capital budget of ₦252 million has been allotted to the National Agricultural Extension Research Liaison Services-Zaria for extension service research and delivery. These distributions are far from sufficient. With this sum, the sector will inevitably suffer from the results of ongoing subpar extension services.

Agricultural Mechanisation

Decree No. 35 of 1990, which is currently an Act of the National Assembly, established the National Centre for Agricultural Mechanization (NCAM) with the primary goal of quickening the rate of automation in the agricultural industry. A capital budget of ₦909 million was proposed in the 2024 budget for the advancement of mechanization in the nation via NCAM. Nevertheless, an additional N683 million was allotted for extension efforts to the FMAFS and other sister DAs. Thus, it may be said that N776 million was given to agricultural mechanization. This is low if agriculture needs to be developed to draw in young people and lessen drudgery.

Climate Resilient Sustainable Agriculture/Agroecology

It is imperative to prioritize increased investments in agroecology. This emphasis is crucial due to the escalating impact of climate change on traditional farming systems, affecting timings and overall production. While there has been a positive step forward with a budget allocation of approximately N1.2 billion for climate-resilient, sustainable agriculture in 2024, it is noteworthy that this amount exceeds the N655.2 million planned for the agriculture budget in 2023. However, considering the extensive consequences of adverse climate change on the agricultural sector and the nation at large, the allocated sum remains relatively small.

Access to Credit

None of the budget line items under the ministry reflect provisions to increase or offer agricultural credits in the proposed 2024 budget. This is similar to the 2023 budget of the ministry. In the current fiscal dispensation, the FMAFS does not provide credit support to farmers, in contrast to its practice in the 2022 budget when it allocated ₦190.7 million for the Provision of Credit Incentives in the Rural Communities (in Collaboration with BOA) to increase investment Portfolios of Communities Based Associations. This is not only peculiar, but it also has many limitations because smallholder farmers might not be able to produce as much as they could. However, in order for the Bank of Agriculture to function financially and give smallholder farmers simple access to credit, recapitalization of Bank of Agriculture (BOA) should be accelerated.

National Agricultural Development Fund (NADF)

We commend President Bola Ahmed Tinubu for the provision of the take-off grant for the National Agricultural Development Fund (NADF). We pushed over the years for the creation of a separate fund to support agricultural development in Nigeria as our budget cycle and limited funding cannot cater for the needs in the sector, hence the NADF. The 2024 proposed budget, allocated to the NATIONAL AGRICULTURAL DEVELOPMENT FUND (NADF) a total budget sum of N102.5 billion out of the total Agriculture sector budget of N362.9billion. This is 28% of the overall sector budget for agricultural financing. Of the total N102.5billion of NADF, N150 million (or 0.1%) is for Personnel Salary, N350 million overhead (0.1%), and N102 billion capital expenditure (99.5%).

Areas of Concern in the NADF:

1. Purchase of Building, Maintenance of Office Building: Where is the NADF currently operating location? The Purchase of Office Building for NADF operation at N1.2billion, and purchase of office furniture, partitioning and fitting of over N70million in the capital budget, after provision of office rent of N27.5million, maintenance of office building and residential quarters of N10million has been allocated in recurrent expenditure is worrisome. Should a new building and furniture be provided in year one, maintenance should not be required as these are fixed assets requiring no maintenance in the 1-3 years.

2. Purchase of operational vehicles at N450million: what type of vehicles are these and how many is required for the NADF? For a national office, this is not necessary. A brand-new operational staff bus cost about N30-50million, the NADF cannot use more than three of such buses aside very few executive cars.

3. Prodigal Research: N240million for research in world best practices to improve various agricultural output nationwide. This line item should be expunged 100% - it should be removed – not approved. The NADF should depend on the other agencies under the Ministry, as well as other partners to get all world best research and practices. 

4. Breakdown on Agricultural Development Fund: the Fund is also designed to support special interventions. No specific intervention or project have been highlighted in the budget. Where such clarity is not provided, abuse and misappropriations are likely to occur. Such ambiguity should not be allowed. A breakdown of this fund is needed.

5. Unclear Travels: the sum of N49million for unspecific travels aside for trainings (which is already provided for) should also be trimmed down. With improvements in ICT and online meetings and workshops, efforts should be made to reduce cost on travels, especially miscellaneous travels.

The N100bn allocation for capital expenditure for NADF should be targeting to achieve the commitments in the President’s state of emergency on the food security situation in the country, therefore should focus on Extension Services, Access to Credit, Women in Agriculture, Youth in Agriculture, Appropriate Labour-Saving Technologies, Inputs, Post-Harvest Losses Reduction Supports (processing facilities, storage facilities, trainings, market access, etc.), Irrigation, Climate Resilient Sustainable Agriculture (CRSA)/Agroecology.

Women and Youth in Agriculture, and Mainstreaming Gender Policy

The total amount allocated for youth and women's empowerment in the agricultural sector budget plans for 2024 is N5.8 billion. Considering the capital budget allocation, the FMAFS budget's allocation for women-related activities is rather meagre. Since females contribute 70% of Nigeria’s agriculture production, it is vital that more funding be directed toward programs that support women and youth in agriculture. The agriculture industry provides a low-cost means of youth and women's empowerment. First and foremost, government needs to make a deliberate effort to target women specifically with initiatives, rather than expecting that resources will trickle down to them, in order to increase youth and women's economic empowerment. We suggest that smallholder women farmers have their own budget line in the annual national budget, separate from the youth budget, since they are not a homogenous group.

Within this allocation, the government (FMAFS) has designated the 2024 budget line "ERGP30175085 MAINSTREAMING GENDER IN AGRIBUSINESS (ONGOING) N600.6 million" as their effort and support for putting the National Gender Policy in Agriculture into action. While this is very good, the funding is not enough to support the implementation for a full year. To close the gender gap in the sector, we suggest increasing this budget line to a reasonable amount and guaranteeing gender mainstreaming in the execution of all FMAFS budget lines. It is important to remember that Nigeria can advance further if women, young people, and people with disabilities are freed from socioeconomic constraints.

Allocation to Agricultural Inputs

Access to contemporary agricultural inputs, such as machinery and farm equipment, irrigation, knowledge, and better seeds, inorganic and organic fertilizers, and crop protection agents, is one of the main worries of farmers. The allocation of funds for the provision of variable inputs, such as fertilizer and agrochemicals, was not as large as it formerly was. Merely ₦6.2billlion was allocated in the 2024 budget. Although it may be claimed that certain government initiatives have given some smallholder farmers better access to reasonably priced inputs, the majority of farmers still lack these resources. For smallholder farmers to have more affordable access to inputs, the government must boost this allocation and reinstate the Growth Enhancement Support Scheme (GESS).

Budget for Postharvest Losses Reduction Support (Processing Facilities, Storage Facilities, Trainings, Etc.) and Access to Markets

Postharvest losses is one of the foremost challenges faced by smallholder farmers especially women in communities in Nigeria. It devastates our efforts and incomes, leaving us poorer and continues to hinder Nigeria’s food and nutrition security. Nigeria’s postharvest losses, which is estimated to be N3.5 trillion annually means about N94.5bn annual losses per 36 States and the Federal Capital Territory (FCT) if shared equally, no State’s annual agriculture budget equals these massive losses. This is far more than each State and FCT’s annual agriculture budgetary allocation and spending. 

While it is commendable to see FMAFS making specific allocations to address postharvest losses, it is strongly recommended that the entire amount of N1.2 billion be increased and released to ensure the reduction of postharvest losses. In order to support post-harvest losses reduction throughout Nigeria, FMAFS must efficiently collaborate with the pertinent agencies and the Federal Ministries of Industry, Trade, and Investment, Science and Technology and Power.

Monitoring & Evaluation, and Coordination

The agriculture sector budget for 2024 suggests allocating a total of N3.4 billion for oversight. Basically, the primary ministry's job is to keep an eye on and oversee the other DAs in the industry. We therefore call attention to the issue of results and their impact on sectoral development, meaning that those in charge of implementing all MDA budgets should make sure that projects are tracked, with findings utilized to enhance the execution of the budget and projects, and that accurate data is provided for Nigeria's CAADP Biennial Report to the African Union.

Questionable Budget Line Items in the 2024 FMAFS Proposed Budget

Some FMAFS budget line items, with combined value of over NGN7 billion, are questionable. For example, about NGN5 billion was provisioned for the rehabilitation of roads and installation of transformer cables across some local government areas in Akwa Ibom State. This raises the question of why the Federal Ministry of Agriculture and Food Security is focused mainly on Akwa Ibom state. Worst still, installing Transformers. Another example is the provision of NGN300 million to reform Agriculture and Food Security Institutions for Renewed Hope Agenda. what exactly does this mean? And the list goes on and on.

Summary of Findings and Conclusion 

Following a comprehensive analysis of the proposed 2024 budget for the agriculture sector, several observations have been identified:

1. It is crucial to acknowledge the potential impact of inflation on diminishing the real value of the budget, thereby compromising the efficacy of the capital budget to facilitate substantive sectoral development. This consideration assumes paramount importance and warrants due attention.
2. Certain components within both the capital and overhead budgets pose challenges in terms of monitoring, as the budgetary documentation lacks comprehensive information regarding essential details such as specifications of what, where, when, who, and how pertaining to specific line items. This opacity hampers effective oversight.

In light of these findings, it is recommended that a more transparent and detailed budgetary framework be pursued to foster accountability and effective monitoring, thereby ensuring optimal utilization of resources for the advancement of the agriculture sector.

Recommendations

1. The allocations to postharvest losses should urgently focus on supporting small cottage processing and storage facilities in communities based on different commodities to be owned, operated, sustained, and expanded by smallholder women farmers cooperatives. This will help address the challenges of postharvest losses experienced by smallholder women farmers across Nigeria.
2. Solar dryers should also be provided to smallholder women farmers cooperatives in communities based on agriculture produce that can be dried to save losses.
3. The Federal and State Governments should invest massively in rural roads to support transportation of agriculture produce and trade.
4. A budget line should be created from this budget as a yearly Strengthening Access to Credit budget line. This funding should focus on getting consultants or consultancy firms to support women, youths and farmers living with disability cooperatives to be able to navigate the too cumbersome access to credit in Nigeria. The team or consultancy firm will handhold the cooperatives to access existing CBN agricultural credit facilities through preparing their business proposals, interfacing, and negotiating with BOA, Bank of Industry, NIRSAL, commercial and microfinance banks. The team or consultancy firm will ensure that the cooperatives access such facilities and other services like extension, insurance, etc. and even market access and they are able to pay back at the end of each circle, etc.
5. Insurance should be made available and easily accessible for all women farmers across communities. Insurance products for smallholder women farmers should also be targeted at risk factors such as rainfall, drought, pests, and high temperatures.
6. Gender sensitiveness and responsiveness of the agriculture budget should be enhanced by increasing line items for the implementation of the National Gender Policy in Agriculture that address specific challenges that affect women farmers different from men as well as avoid lumping up budget for women farmers and other groups such as youths.
7. Evidence exists that irrigation has the potential to boost agricultural productivities by at least 50%. The average milk yield is as low as between 1-2 litres per day in the rainy season to only 500 ml per day in dry season. The production of fresh milk is very seasonally influenced in Nigeria, with 2/3 of the production to be achieved in the rainy season, and 1/3 in the dry season. Investments in irrigation is needed and can be done through the provision of solar powered boreholes across rural communities to provide water for lives and livelihoods to support households use and water for crops irrigation, water for cattle and the growing fodder which can reduce farmers and herders’ clashes across Nigeria while bringing out increased livestock and milk production.
8. The federal government should commit 10% of her annual budget to the agriculture sector to meet the 10% Maputo/Malabo Declaration required to support at least 6% growth rate for the sector as postulated in the CAADP framework and ensure timely and total releases of the agriculture budgets towards food security, unemployment reduction and poverty eradication.
9. Budgetary allocations should be increased and should go to strategic areas of investments which include Extension Services, Access to Credit, Women in Agriculture, Youth in Agriculture, Appropriate Labour-Saving Technologies, Inputs, Post-Harvest Losses Reduction Supports (processing facilities, storage facilities, trainings, market access, etc.), Irrigation, Climate Resilient Sustainable Agriculture (CRSA)/Agroecology, Research and Development, Monitoring and Evaluation, as well as Coordination.
10. Enhance Fund Disbursement for Implementation: In retrospect, the historical performance of the budget reveals a significant deficiency, particularly in the release of funds for effective implementation. Currently, only approximately 20% of the capital budget is being disbursed, contrasting sharply with nearly 100% utilization of recurrent expenditure. This discrepancy underscores the necessity for the government to guarantee robust funding for capital appropriations, ensuring a more equitable alignment with output and fostering productivity among staff.
11. Reintroduction of GES for Input Gaps: The reintroduction of the Growth Enhancement Scheme (GES) is recommended, accompanied by an increased budget to address input gaps experienced by smallholder farmers, particularly women.
12. Gradual Reduction of FMAFS Headquarters Allocation: To optimize resource allocation, a gradual reduction in the substantial allocation to FMAFS Headquarters is proposed. Devolving more powers and activities to implementing agencies would enhance efficiency and focus on the ministry level.
13. Stakeholders Increased Involvement in Budgeting Process: FMAFS is urged to actively increase the involvement of stakeholders, including farmer organizations and civil society organizations, during the annual budget preparation process. This inclusive approach enhances clarity, transparency, and the overall usefulness of the budget for the final beneficiaries.
14. Detailed Project Information in the Budget: The budget should provide detailed information on project locations for infrastructure, mechanization, and construction. Clear indications of quantity requirements for all physical capital budget line items would expedite follow-up and monitoring.
15. Effective Sector Coordination: FMAFS should coordinate effectively with State ministries, devolve budgetary implementation to FMAFS agencies and State-level offices, and collaborate with other relevant ministries and departments. This coordinated effort is essential for addressing cross-cutting issues, including climate change.

For the National Agricultural Development Fund (NADF)

16. The N100bn allocation for capital expenditure for NADF should targeting to achieving the commitments in the President’s declared state of emergency on the food security situation in the country, therefore should focus on Extension Services, Access to Credit, Women in Agriculture, Youth in Agriculture, Appropriate Labour-Saving Technologies, Inputs, Post-Harvest Losses Reduction Supports (processing facilities, storage facilities, trainings, market access, etc.), Irrigation, Climate Resilient Sustainable Agriculture (CRSA)/Agroecology.
17. Optimize Expenditure on Infrastructure: Before committing substantial funds to the acquisition and maintenance of office facilities, the NADF should conduct a rigorous evaluation of its current operating location. Questions regarding the necessity of a new office building, budgeted at N1.2 billion, and the procurement of office furniture and fittings totalling over N70 million should be critically examined. Additionally, considering the allocation of N27.5 million for office rent and N10 million for the maintenance of office buildings and residential quarters in the recurrent expenditure, there arises a significant concern. In the strategic allocation of funds, particular attention should be given to judiciously balancing the need for new infrastructure against the potential for corruption and the long-term cost implications. If new buildings and furniture are procured in the initial year, provisions should be made to eliminate or significantly reduce maintenance costs, as these are fixed assets requiring minimal upkeep in the initial years (1-3 years).
18. Optimized Vehicle Procurement: The allocation of N450 million for the purchase of operational vehicles warrants a detailed review of the type and quantity required for efficient operations. The NADF should conduct a comprehensive analysis of its transportation needs and consider cost-effective options, such as leasing, to minimize expenses. A transparent breakdown of the vehicle types and quantities needed, aligned with the organization's functions, should be presented.
19. Rationalization of Research Expenditure: Given the tight budgetary constraints, the allocation of N240 million for research should be revaluated. The NADF could explore collaborative research initiatives with existing agencies under the Ministry and other reputable partners. This would not only optimize resources but also ensure that research efforts are streamlined and aligned with national priorities. The proposed allocation for research may be significantly reduced or redirected to more critical areas.
20. Detailed Project and Intervention Plans: To enhance accountability and prevent misappropriation, the NADF should provide a detailed breakdown of the Agricultural Development Fund, specifying the intended special interventions or projects. A transparent plan highlighting the objectives, target beneficiaries, and expected outcomes for each allocation should be presented. This ensures that the fund is utilized strategically and mitigates the risk of misuse.
21. Clarity in Travel Expenditure: The allocation of N49 million for unspecified travels raises concerns about transparency and accountability. The NADF should provide a clear breakdown of the purpose, destinations, and expected outcomes of these travels. In light of technological advancements facilitating remote interactions, efforts should be made to minimize travel expenses, especially for miscellaneous purposes. Transparent reporting on travel expenditures will contribute to a more efficient use of resources.
22. Public Consultation on Budget Allocation: In promoting transparency and inclusivity, the NADF should consider engaging the public, relevant stakeholders, and agricultural experts in a consultation process regarding its budget allocations. This participatory approach ensures that diverse perspectives are considered, and potential concerns or oversights are addressed collectively. This can lead to more informed and well-rounded decisions.
23. Regular Review of Budget Performance: In response to the declared state of emergency in the agricultural sector, the NADF should commit to regular and transparent reviews of its budget performance. Quarterly or bi-annual assessments, with detailed reports accessible to the public, can provide insights into fund utilization, successes, and areas requiring adjustment. This ongoing evaluation contributes to adaptive management and strengthens accountability.