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97648 Public Disclosure Authorized FINAL REPORT AGRICULTURAL PUBLIC EXPENDITURE REVIEW AT THE FEDERAL AND SUBNATIONAL LEVELS IN NIGERIA (2008-12) Public Disclosure Authorized Aderibigbe Olomola Tewodaj Mogues Tolulope Olofinbiyi with Public Disclosure Authorized Chinedum Nwoko Edet Udoh Reuben Alabi Justice Onu Sileshi Woldeyohannes 22 August 2014 Public Disclosure Authorized TABLE OF CONTENTS ABBREVIATIONS AND ACRONYMS ......................................................................................................... iii ACKNOWLEDGMENTS ............................................................................................................................... v EXECUTIVE SUMMARY .......................................................................................................................... vii 1. INTRODUCTION ................................................................................................................................... 1 2. STRUCTURE, PERFORMANCE, AND POLICIES OF AGRICULTURE IN NIGERIA ..................................... 9 3. TRENDS IN PUBLIC EXPENDITURE IN AGRICULTURE....................................................................... 38 4. EFFICIENCY AND EFFECTIVENESS OF AGRICULTURAL PUBLIC EXPENDITURE ................................ 62 5. SUMMARY, RECOMMENDATIONS, AND CONCLUSIONS ..................................................................... 88 REFERENCES .......................................................................................................................................... 96 ANNEX I. ............................................................................................................................................. 100 ANNEX II. ........................................................................................................................................... 101 ANNEX III. .......................................................................................................................................... 110 ANNEX IV. .......................................................................................................................................... 124 ii ABBREVIATIONS AND ACRONYMS ADP Agricultural Development Project AETA Agricultural Extension Transformation Agenda AgGDP Agricultural Gross Domestic Product AgPER Agricultural Public Expenditure Review AGRA Alliance For A Green Revolution In Africa ATA Agricultural Transformation Agenda CAADP Comprehensive African Agricultural Development Programme CADP Commercial Agriculture Development Project CARES Cross River Agriculture and Rural Empowerment Scheme COFOG Classification Of The Functions Of Government DAP Development Action Plan FAO Food And Agriculture Organization Of The United Nations FDAE Federal Department Of Agricultural Extension FGN Federal Government Of Nigeria FMARD Federal Ministry Of Agriculture And Rural Development FMEnv Federal Ministry Of Environment FMF Federal Ministry Of Finance FMTI Federal Ministry Of Industry, Trade, And Investment FMWR Federal Ministry Of Water Resources FSP Fiscal Strategy Paper GDP Gross Domestic Product GESS Growth Enhancement Support Scheme GIFMIS Government Integrated Financial Management Information System ICT Information And Communication Technology IFAD International Fund For Agricultural Development IFPRI International Food Policy Research Institute IGR Internally Generated Revenue IPPIS Integrated Personnel And Payroll Information System LEEDS Local Economic Empowerment And Development Strategy LGA Local Government Area LSMS-ISA Living Standards Measurement Study–Integrated Survey On Agriculture MDAs Ministries, Departments, And Agencies MDG Millennium Development Goal MTBF Medium-Term Budget Framework MTEF Medium-Term Expenditure Framework MTFF Medium-Term Fiscal Framework MTSS Medium-Term Sector Strategy NACRDB Nigeria Agricultural Cooperative And Rural Development Bank NAIP National Agricultural Investment Plan NCA National Council On Agriculture NDDC Niger Delta Development Commission NEEDS National Economic Empowerment And Development Strategy NEPAD New Partnership For Africa’s Development NIRSAL Nigeria Incentive-Based Risk-Sharing System For Agricultural Lending NPFS National Programme For Food Security ODA Official Development Assistance PDAs Parastatals, Departments, And Agencies PER Public Expenditure Review iii PFM Public Financial Management PSFS Public Spending On Fertilizer Subsidy R&D Research And Development RBDA River Basin Development Authority ReSAKSS Regional Strategic Analysis and Knowledge Support System SCRI Songhai Cross River Initiative SEEDS State Economic Empowerment And Development Strategy SPARC State Partnership For Accountability, Responsiveness And Capability SPEED Statistics For Public Expenditure For Economic Development SSA Africa South Of The Sahara TSA Treasury Single Account VAT Value-Added Tax iv ACKNOWLEDGMENTS This review of agricultural public expenditure in Nigeria involved many institutions, processes, and individuals. Covering federal, state, and local governments demanded considerable time and financial resources. We are grateful to the World Bank for providing the necessary financial resources and to all those who contributed their time in various ways to ensure that the review was successfully concluded. Procedurally, the World Bank commissioned four consultants to undertake the review at the federal level and in each of the case study states of Cross River, Niger, and Ondo. At the same time, the International Food Policy Research Institute (IFPRI) was commissioned to lead the review at the federal and subnational levels, supervising the state consultants, providing technical support, and interacting with officials at the state and local government levels, and to produce a report that presents a holistic picture of agricultural public expenditure in Nigeria. We are grateful to Stephen Mink and Olayinka Babalola of the World Bank for their administrative support and guidance throughout the period of the review. Grateful acknowledgment is due to the Nigerian federal government and to the governments of Cross River, Niger, and Ondo states for their willingness to provide necessary information as well as their active participation and cooperation at various stages of the review. Our special thanks go to the minister of agriculture, the Honorable Akinwumi Adesina; to the director of finance and administration of the Federal Ministry of Agriculture and Rural Development (FMARD); and to other directors in FMARD who supplied information and gave us feedback at seminars and workshops during the review process. We acknowledge the assistance of officials from the Budget Office of the Federation, the Office of Accountant General, the Office of Auditor General, and the Federal Ministries of Water Resources and the Environment, who participated actively in our seminars and workshops and offered useful suggestions. We appreciate the cooperation of the commissioner of agriculture and natural resources in Cross River state, the Honorable James Aniyom; and the chief statistician in the unit of Planning, Research and Statistics, Christopher Igwe; as well as Enobong Ikong of Akamkpa local government. We owe a debt of gratitude to Dr. O. Adelola, the secretary to Ondo state government, for providing an enabling environment for conducting the study. The commissioner of agriculture in Ondo state, the Honorable Alhaji Lasisi Oluboyo; the permanent secretary of the ministry, Peter Ogunsuyi; and other members of the steering committee for the study deserve special commendation. We are also grateful to the permanent secretary of the Ministry of Economic Planning and Budget, Chris Kolawole, and his counterparts in the Ministry of Finance and Ministry of Local Government and Chieftaincy Affairs. The head of the department of agriculture in Odigbo local government and the director of budget showed tremendous enthusiasm in conducting our research team to project sites and providing relevant data for the study, and for this we are very grateful. Special thanks go to the commissioner for agriculture in Niger state, who acted as chairman of the steering committee for the study; to Zakari Abubakar, who is permanent secretary of the ministry; and to the committee secretary, Julius S. Karma, who is director of planning, research and statistics. We express our deep appreciation for the cooperation of members of the committee who took the time to provide necessary data and participate in focus group discussions. We also thank the directors of agriculture and of finance and budget of the Wushishi Local Government Council for helping us to access public expenditure records at the local government level. We offer immense gratitude to several other individuals who read drafts of this report and made useful contributions. We also recognize and deeply appreciate the efforts of Tolu Odetayo and v Motunrayo Oyeyemi for the research assistantships they offered at various stages of the review. vi EXECUTIVE SUMMARY Introduction and Objectives Agricultural expenditure is critical to the transformation of the agricultural sector in Nigeria. Yet spending on agriculture remains at low levels in spite of the sector’s huge potential for wealth creation, employment generation, and poverty reduction. This report is a summary of the findings of the Nigeria agricultural public expenditure review (AgPER) at the federal and subnational levels. The main objectives of this review are to (1) examine the extent to which the size and
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