Nigeria’s cash-strapped states can hardly sustain the Growth Enhancement Support (GES) initiative as their monthly allocations continue to nosedive on the back of dwindling oil revenues.
GES involves cost sharing of major agricultural inputs, such as fertiliser and seeds between the Federal Government, state government, and the nation’s farmers.
Within the framework of this agreement, the federal and state governments pay 25 percent each, while farmers bear the cost of the remaining 50 percent.
But with the current insolvency situation in nearly all the 36 states, it is increasingly doubtful whether the sub-national governments could carry on with this scheme which has made positive impact on the agricultural sector through eradication of corruption in the fertiliser distribution chain, increased access to high-yield seeds and easy access to other inputs.
Some farmers who spoke with BusinessDay say states should not break the chain, and have to see this scheme as one that will help Nigeria’s quest for economic diversification and food security.
They say President Muhammadu Buhari’s government needs to correct the errors of the previous administration and make the scheme all-inclusive.
“The Buhari-led government should improve on the scheme by ensuring that these agro-allied contractors distribute good and quality seeds to farmers. The scheme should continue,” said Abiodun Olorundero, chief executive officer of Green Vine Farms.
Muhammed Augie, a rice and wheat farmer in Kebbi State, who farms up to 15 hectares, said the scheme should continue “because it enables farmers to get seeds and fertiliser at lower rates. We don’t have money and this is one of the ways government can support us. If farmers get it right at the farm, then there will be good harvest, which will ensure the country’s food security.”
Nigeria’s 36 states shared N299 billion last month, as against N1.2 trillion in early 2015 in FAAC (Federal Account Allocation Committee).
The states have continued to struggle to meet social and economic obligations, as dwindling federal allocations are not sufficiently supported by internally generated revenues (IGRs) across states.
The Federal government has continued to provide reliefs and bailouts to struggling states.
As at the fourth quarter of 2015, the debt owed by Nigerian state governments to deposit money banks (DMBs) was in excess of N600bn.
In addition to N338 billion injected by the Central Bank of Nigeria (CBN) as bailout, the total credit to some 27 financially distressed states was in the neighbourhood of N1 trillion.
Given the deteriorating financial situation of most states, some farmers advise the states and Federal Government to hands off their involvement in fertiliser distribution but rather, create a better operating environment and an atmosphere for mechanisation.
“Subsidising agro inputs is no more sustainable. States don’t have money and they can no longer meet their obligations,” Ahmed Rabiu Kwa, executive secretary, Fertiliser Suppliers Association of Nigeria (FEPSAN) said in a telephone interview with BusinessDay.
“What farmers need from the government is infrastructure, mechanisation and technology that would improve their productivity,” said Kwa.
BusinessDay had earlier reported that government at both levels is yet to offset an accumulated N72 billion debt it owes agro allied companies which supply agro inputs to farmers under the scheme.
Josephine Okojie
