The recent announcement on Thursday last week, of the appointment of Muhammad Abu Ibrahim, Executive Secretary of, the National Agriculture Development Fund (NADF) by President Bola Ahmed Tinubu, has elicited hope of increased funding for agriculture investors and farmers across the country.
Chief Ajuri Ngelale, Special Adviser to the President on Media and Publicity, announced the approval of Mr. Muhammed Abu Ibrahim by President Tinubu, via a State House Press Release on Thursday, October 19th, to serve as the Executive Secretary and Chief Executive Officer of the National Agricultural Development Fund (NADF).
Despite her immense agricultural potential, Nigeria has been grappling with a critical challenge that threatens its ambitions of becoming an agricultural powerhouse – the chronic issue of inadequate funding.
Despite the country’s vast arable land and a young, tech-inclined population, the agricultural sector has remained stunted due to a lack of substantial financial support.
Widely recognized as a key driver of economic growth in Nigeria, agriculture contributes significantly to the nation’s GDP and provides livelihoods to millions.
However, the insufficient allocation of funds to this sector has resulted in missed opportunities and a failure to realize its full potential.
One of the primary reasons attributed to this funding crisis is the inconsistent budgetary allocation by the Nigerian government.
The highest percentage of the national budget allocated to agriculture was 3.61 per cent in 2019. In 2020, it reduced to 1.51 per cent, but rose in 2021 to 1.92 per cent and dropped again to 1.25 per cent in 2022.
The Food and Agricultural Organisation (FAO) recommends that 25% of the government capital budget be allocated to agricultural development.
Nigeria is also a signatory to the 2003 African Union Maputo Declaration, which recommends a 10% national budgetary allocation to the development of agriculture, but the country’s inability to meet the set standard has resulted in negative implications for food security.
The repercussions of this funding crisis are profound. Nigeria continues to grapple with food insecurity and an over-reliance on food imports.
Furthermore, the country’s potential to become a regional and global agricultural exporter remains largely untapped, as its capacity for value addition and agribusiness development remains underdeveloped.
Some efforts that have been made to address these challenges by the government include, agricultural intervention programs and the creation of specialized financial institutions like the Bank of Agriculture and NIRSAL created in 2013, which stands for Nigeria Incentive-Based Risk Sharing System for Agricultural Lending, to provide funding to farmers and agri-businesses.
However, the impact of these initiatives has been limited, and much more specialized and innovative funding is needed to bolster the sector’s growth.
Following the yearning of agricultural stakeholders, who believed the sector would be better served by a Fund that would specifically cater to its development, like TETFUND is to tertiary institutions in the country, the National Agricultural Development Fund was created in 2022 when former President Muhammadu Buhari signed the bill which was passed in March by the National Assembly into law.
In part IV of the Act establishing the NADF, its account shall be funded through a take-off grant provided by the Federal Government; 0.5% of the Natural Resource Development Fund; 5% of profit after tax of each commercial bank in Nigeria; 5% of petroleum profit tax; 50% of the duty levied on imported rice, wheat, sugar, and milk; monies appropriated by the National Assembly.
The Fund will in turn provide financing for the implementation of agricultural policies and to strengthen agriculture institutions within the framework of National priorities and strategies.
It will provide funds for on-lending to farmers and corporate bodies through appropriate financial institutions on appropriate soft terms; and provide finance for the establishment of special agricultural zones in the six geo-political zones to boost the food production system in Nigeria, among other financial interventions for agricultural development, the Fund is also mandated to assist donor institutions on efforts to increase food production in the country.
The Board of the Fund is expected under its establishing Act to be populated by a chairman, one representative each of the ministry of finance (office of the accountant general); Federal Inland Revenue Service; All Farmers’ Association of Nigeria; National Food Reserve Agency; Bankers Association of Nigeria; the organized private sector to represent special interest; two persons to represent the Federal Ministry of Agriculture and Water Resources; one person from each of the six geo-political zones and an Executive Secretary.
As stipulated in the NADF Act, the president shall only appoint to the position of the Executive Secretary/CEO of the fund, a person with cognate experience in agricultural finance, economics, and agricultural policy formulation and implementation.
Muhammad Abu Ibrahim holds a first degree in Accountancy from the University of Jos and is a Certified Agricultural Finance and Banking expert, he is an Alumnus of the Harvard Kennedy School and has also attended the Robert Kennedy College Zurich, Frankfurt School of Finance and Management and a Fellow of Aspen Institute Leadership Initiative for Africa.
He co-founded and was CFO of Sponge Analytics (A Data Analytics Company), which partnered with MTN Nigeria to develop Animal Identification and Management Solutions (MTN AIMS), the first of the kind in Africa, that was meant to solve the problems of cattle rustling, animal disease transmission, and the underdevelopment of the livestock value chain.
He later co-founded Livestock247.com (Nigeria’s 1st Online Livestock platform) which has changed the business of livestock in Nigeria and continued to initiate many tech-driven innovations in the crop side of agriculture through his involvement with many AgriTech companies in Nigeria.
Through Livestock247, where he served as a founding CFO, director, and later vice chairman of the board, Muhammad managed multi-million-dollar international donor-funded projects for various interventions in Nigeria.
Reacting to his appointment, the president of the All-Farmers’ Association of Nigeria, Arc Kabir Ibrahim told ThePressNG that farmers are excited by the development:
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