Nigeria

Since early 2002, IFDC has been undertaking a USAID-funded Developing Agri-Input Markets in Nigeria (DAIMINA) project. This project is being conducted in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD). Project activities include dialogue on policy reforms and regulations, private sector capacity building in agricultural input marketing, and strengthening of market information services. Private sector capacity building was initiated in 20 selected markets in Kano and Oyo states and was later extended to another 20 markets in Bauchi and Abuja.

The efforts of DAIMINA have resulted in the development of a strong input supply chain, revision and amendment of fertilizer and seed laws, and strengthening of the market information services. A significant improvement in input supply and fertilizer retail prices has shown a downward trend through competitive business practices of trained agricultural input dealers.

An assessment of the project’s impact follows:

• DAIMINA assisted FMARD in the revision and amendment of fertilizer and seed laws. The amendments proposed by IFDC in the Fertilizer Board Act of 1977 were accepted by FMARD in 2003 and the National Council of Agriculture in June 2004.

• An input supply chain including 300 retail dealers, 50 wholesale dealers, and 35 importers/blenders has been instituted. The retail agricultural input dealers are the main links of the input supply chain; they have been given intensive training to enhance their product knowledge and skills in business management and linked with related stakeholders.

• To develop business linkages and capabilities in negotiations and policy dialogue, the agricultural input dealers were encouraged to form trade associations. As of July 2004, 22 market-level and 4 state-level associations have been established in the project area. Emergence of the Fertilizer Producers and Suppliers’ Association (FEPSAN) at the national level, including 35 importers, manufacturers, and blending plants, was facilitated by the project in early 2004.

• As a result of the market development activities, fertilizer supply in Nigeria has shown a steady increase. During the first half of 2004, 485,000 tons of fertilizer has been imported, compared with 185,250 tons in the same period of 2003.

• Through heightened business skills, effective credit mobilization, and improved services to farmers, the trained agricultural inputs dealers have registered a 30%-40% increase in business turnover during 2004, compared with that of 2003.

• The agricultural inputs dealers have been encouraged to diversify their businesses by adding crop marketing and food processing. Eight small-scale processing mills have been established as demonstration centers, and 120 agricultural enterprises have been trained in commodity marketing.

• Trade associations, through dialogue with the Federal and State Governments, have succeeded in convincing the Government of the need for policy reforms. FMARD announced in August 2004 the Government policy of promotion of the private sector as a key player in input supply and crop marketing in Nigeria.

• The expansion of the input supply chain and improved business practices have led to increased availability and reduction in fertilizer retail prices. The price of urea (50-kg bag) has declined from US $18.93 per bag in 2003 to US $15.90 in 2004. Some fertilizer importers have opened field delivery points to supply fertilizer close to the consumption centers in the project area.

• As a market-friendly alternative to direct subsidy, IFDC—in collaboration with FAO’s Federal Government of Nigeria (FGN) Special Programme on Food Security Project (SPFS)—launched the fertilizer voucher scheme in May 2004 in seven SPFS sites. Initial response is encouraging and shows potential for expansion.

• IFDC is a leading partner in the rice alliance (a USAID-sponsored collaborative program) to promote production, processing, and marketing of rice in Nigeria.

• The project has facilitated the establishment of Nigeria Agri-Market Information Services (NAMIS) jointly with FAO, FGN, SPFS, and the Project Coordinating Unit of FMARD. Product availability and price information relating to agricultural inputs and crop produce is being collected and disseminated through print, electronic, and mass media to all stakeholders.

• Encouraged by an improved fertilizer marketing system and demand potentials, USAID has asked IFDC to conduct a pre-feasibility study for establishing a urea fertilizer production unit in Nigeria.

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