Food Prices Are Making Nigerians Poorer
By Maureen Chigbo
Sunday, April 27, 2008
Simeon Ehui, lead economist and sector leader sustainable development, World Bank Office in Nigeria, spoke with Maureen Chigbo, general editor on the bank's activities in agricultural sector in the country and its disposition to helping Nigeria check food crisis. Excerpts:
Newswatch: What is the World Bank doing to help Nigeria check food crisis?
Ehui: World Bank has been very active in Nigeria in the area of agriculture. The involvement of the World Bank over the years, has actually helped Nigeria to reduce the impact of the food price increase. Because the World Bank has this Fadama project which is one the most successful projects in Nigeria and even in Africa. And because of the success of that particular project, farmers are able to have enough income and resources to face the hardship coming from the price rise. They are also able to produce enough food for the people during the dry season era. If the Fadama two projects were not there I am sure that the impacts of food price rise will be much more felt in Nigeria. The other project include other activities that the federal government is doing on food - on cassava, rice, some intervention from IFAD - the International Fund for agriculture Development.
Newswatch: The minister said that 65 percent of Nigerians are food insecure. How does this figure square with all you have done in the country to boost agriculture?
Ehui: What the minister is saying basically is the observation that we have now. The question is what would have happened if those projects were not there. We would have more hungry people. So what the minister is basically saying is that more needs to be done to support agriculture. And World Bank is already thinking in its programme. We are developing a project of $250 million now to cover the whole federation of Nigeria. So that is what we are discussing. The World Bank has another commercial agriculture project we are developing to cover $100 million. Then in the pipeline we put in another project of $200 million that may come out in a year or two. Fadama 1 is over. It was $67 million. It helped improve irrigation in Northern states. Then came Fadama 2 that was effective in 2004 and we are feeling the positive impact of that one now. And that is $100 million and that is almost ending. And the government had made a request now for Fadama 3 to cover the whole federation and that is $250 million. That's what we are discussing now. It would be negotiated on Wednesday. All this for agriculture. Then we have commercial agriculture $100 million.
Newswatch: When did Fadama 1 start?
Ehui: Fadama 1 started in the 90's, and ended in 1999 and then we prepared Fadama 2 that covered 12 states and after that added six states that is 18 states. That is ending next year. That is the one I said it is a successful programme. And then Fadama 3 , which is about to start covers the 36 states plus the FCT. What I am saying basically is that the World Bank is in front line to help move agriculture in Nigeria.
Newswatch: Put together, all the money World Bank has spent is about $560 million.
Ehui: Since the 90s up to now the World Bank has put in about $417 million. But we are going to add another $200 million in the next 18 months. And this is in agriculture alone.
Newswatch: Is World Bank giving Nigeria any loan now to help it to import food?
Ehui: No. We don't give loan to import food because first of all there has to be a request from the federal government to do that. All that can be done is if there is such a problem it is for the Nigeria government to look at its policy and reduce taxation and remove import tariff. Nigeria is not at the level of Haiti or Burkina Faso for which people are dying or rioting. Nigeria needs money to improve its agricultural productivity so that in the medium to long term the food production system in Nigeria will be enough to absorb the demand from the population.
Newswatch: What is the situation in Nigeria now? Would you say that hunger is ravaging the country?
Ehui: I will not put it dramatically like that. There is of course hunger. But I will not dramatise it in a way that people are dying. We are not at that level yet. There is concern that price rise is making some people poorer. There is no question about that. And we need to address it.
Newswatch: What is the bank's position on subsidy on fertiliser
Ehui: I know that the federal government through the national council on agriculture took the decision to give subsidy for fertiliser. World Bank is not against subsidy. In fact we will support subsidy. What we are worried about is that when the subsidies are not targeting the people who need it.
Newswatch: What do you advise government to do with regards to the fertiliser subsidy?
Ehui: There are many examples in the world where such things are done. And we have expertise. If the government seeks the expertise of the World Bank, we can bring in people who can work with the federal government and tell the federal government how subsidy can be used to target the needy people. Our job is to provide technical expertise and we can do that.
Newswatch: You have seen our economic reforms programme how do you assess it?
Ehui: Nigeria's economic reform programme is one of the most successful. Honestly, since 2003, the economic reform programme has been so successful that it has brought to the country a lot of reward and opportunities. Prospect for investment has increased. Governance is improving. We have less of corruption.
Newswatch: The amount budgeted for agriculture is small. What percent age of the budget is right?
Ehui: The Maputo declaration asked that the government should devoted two percent of its budget to agriculture. Nigeria is far from that. Nigeria is devoting 2 percent of the budget to agriculture.
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