Engr. Shedrack MadlionExecutive Director: Admiral Environmental Care Limited,

No.2 Waziri Ibrahim Crescent, Abakpa G.R.A, Kaduna, Nigeriawww.admiralcare.orgTel: 234-8037862101

NDFF 2012 CONFERENCE Guoman Tower Hotel, London 24-25 May 2012

Harnessing Nigeria’s Agric Capitals to Achieve Food Security And Job Creation

Cassandra’s curse

In Greek mythology, Cassandra, a daughter of King Priam of Troy, captured the eye of Apollo who gave her the ability to see the future. However, she did not return his love and he added the curse that NO ONE would ever believe her predictions. Cassandra foresaw the horse, and the subsequent destruction of Troy but was unable to do anything about what she knew was about to happen.

Sustainable Markets

Technology will go nowhere without the markets

Significant implications for growth, poverty and food security"

Business Environment

The business environment is the product of many factors, including infrastructure, human and physical capital, macroeconomic policies, and microeconomic regulations.

An enabling business environment is essential to the creation of a level playing field for all parties in value chain development.

To be successful, entrepreneurs need transparent and consistently applied rules and regulations, as well as a positive attitude by society to their success.

In an enabling environment, government would encourage local self-organisation, maintain an active dialogue with stakeholders, and ensure that local needs are addressed.

Harmonising public and private interests and formulating coherent policies is a challenging task for any government.

Why harnessing Nigeria’s agric capital through value chain development is important?

Globalisation does not only patch up market gaps and brings producers and consumers closer together; it also brings regional and international competition into local markets.

Key points of note: increase efficiency and thereby increase total

generated value improve the competence of intended actors to

increase their share of the total generated value.

The value chain system

USAID, 2006

Public interest in Value Chain development

While entrepreneurs invest in private interests, development agencies should invest in matters of public interest: improving access to commercial activities promoting fair-trade schemes small entrepreneur capacity building labour standards corporate social responsibility, etc.

Value Chain Players – Supporters - Influencers

How easy is doing business in the World ?

Topic Nigeria’s Ranking World’s Best

Starting a business 118 Canada

Dealing with licenses 129 St. Vincent

Employing workers 56 United States

Registering property 170 New Zealand

Getting credit 86 United Kingdom

Protecting investors 46 New Zealand

Paying taxes 105 Maldives

Trading across borders 137 Hong Kong, China

Enforcing contracts 66 Denmark

Closing a business 72 Japan

Ease of doing business 108 Singapore

Top 20 African countries on the ease of doing business

29. South Africa32. Mauritius42. Namibia48. Botswana76. Swaziland83. Kenya84. Seychelles94. Ghana97. Ethiopia102. Zambia

107. Uganda108. Nigeria110. Malawi113. Gambia114. Lesotho125. Cape Verde132. Gabon137. Benin140. Mozambique141. Cote d’Ivoire

Sub Saharan Africa is more difficult to do business in than any other region

OECD EastAsia

EastEurope

LatinAmerica

MiddleEast

SouthAsia

Africa

Average ease of Doing Business in 2007

Source: Investment Climate Program (ICP)/DFID, Cross Rivers State Launch, 14 Nov 2007.

The private sector

“… a one per cent increase in Africa's share of world trade would benefit Africa by over $70bn per year.”

Prime Minister Tony BlairLord Mayor’s Dinner, LondonNovember, 2005

NESG AGRIC SUMMIT

Price

Chemonics/USAID/World Bank 2001 industrial survey in Nigeria the report was submitted in 2002.

-300 firms Manufacturing labor market: Access to finance: Protection of the Manufacturing Sector in

Nigeria The Cost of Electricity:

Ghana, a multinational firm reported that its electricity cost was USD0.07 per KwH as in Nigeria. Nigeria firms: self-generated power for 67% of the

time & Ghana < 10%

Exportable commodities

Packaged roasted kernels from local markets

Freshly caught shrimp from Nigerian waters Sesame and Melon seeds as found in

local markets

Hides and Skin

Nigerian value chain analysis as at 2006-world Bank

Finance Costs: The 19 percent annual interest rate in Nigeria is four percentage points higher than in its most costly neighbor, Kenya, and more than three times as much as in China.

Management Time Utilization: Nigeria compares unfavorably with other developing countries, taking almost twice as long as China, which itself is above average.

Business Regulatory Procedures: Data collected recently show that it takes 17.8 days on average to claim imports from customs (more than twice the duration in China) and 14 days to clear exports (in contrast to 7.7 in China and 4.7 in neighboring Kenya). Coping mechanisms managed by the private sector include the use of neighboring country ports, such as Cotonou in Benin, with unofficial road transfer into Nigeria. Efforts however are underway to speed these processes.

Infrastructure Costs: Power costs at least twice as much in Nigeria than it does for Kenya and China, and steam costs almost five times as much.

Labor Market: Labor costs are especially high in Nigeria. Apart from South Africa, where costs rise to 222 cents per hour, Nigeria has the highest costs at 92 cents per hour, Kenya at 66 cents and China at 57 cents.

African Energy Sector – 3 distinct regions

Energy consumption - Sub-Saharan Africa

Electricity3%

Biomass81%

Petroleum15%

Gas1% Coal

0% Energy Consumption - South Africa

Biomass16%

Coal27%

Coal-basedElectricity

26%

Gas2%

Petroleum29%

Energy Consumption - North Africa

Petroleum62%

Biomass4%

Coal1%

Gas18%

Electricity15%

Cost of inadequate Infrastructure

The World Bank estimates that Nigeria is losing about $600 million a year because of inadequate supplies of electricity…

Foreign investors are told to BYOI-Bring Your Own Infrastructure….Dec 5 Punch, 2007, page 13.

20

Improving business environment at subnational level

(CASE STUDY: Mexico)

Four Doing Business indicators in Mexican cities/states

Impact Top performers used the results to promote their

states to investors The worst performer undertook drastic reforms Stimulated dialogue, exchange of ideas and

reform : 9 out of 12 states reformed First phase covering 12 states generated

demand for expansion to all 31 states in phase two

Material Flow

SCOR Level 1

Operations Strategy

Analyze Basisof

Competition

SCOR Level 2

Configuresupply chain

AlignPerformance

Levels, Practices, and

Systems

Implementsupply chain

Processes and Systems

Implementsupply chain

Processes and Systems

SCOR Project Roadmap• Competitive Performance

Requirements• Performance Metrics• Supply Chain Scorecard• Scorecard Gap Analysis• Project Plan

• AS IS Geographic Map

• AS IS Thread Diagram

• Design Specifications

• TO BE Thread Diagram

• TO BE Geographic Map

Informationand Work Flow

• AS IS Level 2, 3, and 4 Maps• Disconnects• Design Specifications• TO BE Level 2, 3, and 4

Maps

Develop, Test, and Roll

Out

• Organization• Technology• Process• People

SCOR Level 3

Conclusion

Promotion of legal and regulatory frameworks that define rules and determine rights and obligations with respect to resources, assets, and business operations.

Enabling policies could include incorporation of agribusiness strategies and actions into overall agricultural development planning, reinforcement of compliance and certification systems, and provision of basic infrastructure to improve market access and reduce business costs.

To support agro-industries and value chains, options include linking small farmers with commercial farmers, exporters or agro-processing firms in long-term relationships, initiatives that improve the capacity of small farmers and small agro-enterprises to participate in chains for high value products, and innovative mechanisms to link public funding with private sector resources.

Public and private sector coalition building through the establishment of a partnership founded on evidenced-based policy reform and market oriented service delivery offer the greatest probability of medium-term improvements in power, transport, and regulatory service delivery. Herein lies the opportunity for income and employment growth in the value chains.

Closing Tip

Minerals will “come and go” but a well-planned and developed value agric chain system endures

and sustains.