Nigeria Agriculture Public Expenditure Review (NAGPER)
and
Planned Research on Agricultural Subsidies and the Health‐Productivity Nexus
Tewodaj Mogues
Andrew Dillon
Nigeria Agriculture Nigeria
Agriculture
Public Expenditure Review (
(NAGPER)
)
IIntroduction to the d i
h
R
Research Project
hP j t
Why Analyse Agricultural Public Spending in Nigeria?
Public Spending in Nigeria?
• Renewed attention to agriculture in Nigeria
g
g
• Manifested in recent development strategies
–
–
–
–
New Agricultural Policy Thrust (2001)
New
Agricultural Policy Thrust (2001)
NEEDS I (2004)
NEEDS II (2008)
NEEDS II (2008)
Draft new agricultural strategy
• But government strategies and policies will d l
ll
have little impact unless backed up by appropriate public expenditure
bl
d
Questions addressed in NAGPER
• How much is being spent on agriculture?
• How is spending distributed across the three tiers of government?
• In what areas (sub‐sectors, programmes, etc.) are agricultural expenditures being made?
• How are decisions on resource allocation to the sector being made, and by whom?
• What recommendations can be made to support a more effective and efficient use of public funds?
Fi di
Findings presented here not final –
dh
fi l feedback welcome!
f db k l
!
Research Team
• Tewodaj
T
d j Mogues
M
(IFPRI)
World Bank:
• Michael Morris
• Lev Freinkman
• Simeon Ehui
• Abimbola Adubi
National
N
ti
l Collaborators:
C ll b t
• Chinedum Nwoko
• Olufemi Taiwo
• Caroline Nege
• Patrik Okonji
• Louis Chete
Research Team interacted intensively with various
officials from the Federal and State Ministries of
Agriculture and of Finance, LG Departments of
A i lt
Agriculture,
and
d other
th governmentt officials
ffi i l
Financial Support for the NAGPER
pp
DfID (Department for International
Development)
CIDA (Canadian International
Development Agency)
W ld Bank
World
B k
Study Area
y
Federal
Cross
River
Kaduna
Birnin
Gwari
Bauchi
Dass
Oduk
-pani
Study Area
y
S ok o to
K ats in a
K eb b i
Z a m fa ra
K an o
Yo b e
Jig aw a
B orn o
kADUNA
G o m be
B au c h i
K ad u n a
Ni ge r
A da m a w a
P la t e a u
A bu j a
K wa r a
N a ss a ra w a
Oyo
T a ra b a
K og i
Osun
Ogun
B en ue
O ndo
E do
D e lta
B ay e l
Imo
Ri ve rs
Cr o ss R i v e r
Agriculture in A
i l
i
Ni i ’ E
Nigeria’s Economy
Agriculture: Long‐Run Decline in Contribution to GDP
Contribution to GDP
100%
Sectorral share
e of GDP (%)
90%
Services
80%
70%
Manufacturing
60%
50%
Extractive Industry
40%
30%
20%
10%
Agriculture
0%
1960
1965
1970
1975
1980
1985
1990
1995
2000
2005
Agricultural Growth Better than SSA Average
Better than SSA Average
6
5.6
Sub-Saharan
Sub
Saharan Africa
Ave
erage annual g
growth - Ag GDP (%)
5
Nigeria
4
3.4
3
3.6
2.7
2.5
2.2
2.1
2.1
2
1
0
1970-1980
1980-1990
1990-2000
2000-2006
Cereal Yields in Nigeria: International Comparison
International Comparison
3,500
Asia
3,000
World
LDCs
Yield (kgg/ha)
2 500
2,500
2,000
1,500
1 000
1,000
Nigeria
Africa
500
0
1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010
Yields of Key Crop Types
y
p yp
1.1
Oilseeds
1
Index of food
d crop yield
ds (1990 = 1)
0.9
Cereals
08
0.8
Roots & tubers
0.7
0.6
0.5
0.4
0.3
Rice
0.2
01
0.1
0
1990
1992
1994
1996
1998
2000
2002
2004
Why Worry About the Agricultural Sector?
the Agricultural Sector?
• 53% of the population is rural
rural, but:
• >70% of the poor live in rural areas
• 64% off rurall (vs.
(
35% off urban)
b ) population
l ti
are below the poverty line
• From 1993 to 2003, $1/day poverty
worsened, from 59% to 71% of population
• Welfare of the poor is intricately tied to
performance of the agricultural
p
g
sector
Magnitude of Agricultural Magnitude
of Agricultural
Expenditures: Expenditures:
Spending is Exceedingly Low
p
g
gy
Federal Spending: Agriculture vs Total
Agriculture vs. Total
N million (2001 constant values)
Budget
Actual
2001
Min. of Ag & Rural Dev
Total
17,575
Total
Actual
2002
15,916
16,509
Budget
Actual
2003
9,521
14,908
8,917
803,561 751,607 1,055,098 740,278 885,595 573,513
2004
Min. of Ag & Mi
fA &
Rural Dev
Budget
12,725
2005
10,768
643,861 621,147
11,516
11,847
729,968 717,962
Federal Agriculture Expenditure Share
is Very Low
Share is Very Low
Federal level
2.2%
2
2%
2.0%
1.8%
1 6%
1.6%
1.4%
1.2%
1 0%
1.0%
0.8%
0.6%
0 4%
0.4%
0.2%
0.0%
2001
2002
2003
2004
2005
State‐level Agricultural Expenditure Shares
are Slightly Higher
Shares are Slightly Higher
7%
6%
5%
4%
3%
2%
1%
0%
Bauchi State
2001
2002
2003
8%
7%
6%
5%
4%
3%
2%
1%
0%
2004
Cross River State
200
2001
2005
2002
Kaduna State
14%
12%
10%
8%
6%
4%
2%
0%
2001
2002
2003
2004
2005
2003
200
2004
200
2005
Local Agricultural Expenditure Shares are
Highly Erratic
are Highly Erratic
12%
10%
Birnin Gwari LGA
%
8%
6%
4%
2%
0%
2001 2002 2003 2004 2005
35%
30%
25%
20%
15%
10%
5%
0%
Odukpani LGA
2001 2002 2003 2004 2005
Agriculture Spending Falls Short of Sector’s Contribution to Economy
Sector’s Contribution to Economy
45
GDP share
12
35
10
30
8
25
20
Expenditure share
15
6
4
10
5
0
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
2
0
Ag
g exp. as % of total exp.
Ag G
GDP as % of total G
GDP
40
14
Agricultural Spending Share in International Comparison
International Comparison
Nigeria
Budget Execution has been Poor, but Not Only in Agriculture
but Not Only in Agriculture
(all figures in %)
States
Cross
Cross‐
Kaduna
Bauchi
River
Local Gov’ts
Birnin Oduk‐
Birnin Oduk
Gwari pani
Expenditure type
Federal
‐level
Recurr.
Agri‐
p
culture Capital
Avg budget Total
execution
Recurr.
Aggre‐
Capital
gate
Total
104.2
102.8
90.6
62.5
54.3
14.9
61.8
79.1
51.5
69.1
51.7
70.7
37.7
44.5
68.3
59.7
2.0
10.8
106.1
147.4
86.1
106.9
50.1
190.4
66.1
84.7
40.3
78.1
53.2
69.0
56.5
92.3
55.7
49.9
107.7
163.5
Recurr.
Agri‐
culture Capital
Total
7.5
10.8
9.4
37.5
76.6
85.1
38.2
22 0
22.0
48.5
30 9
30.9
48.3
29 3
29.3
62.3
55 5
55.5
31.7
49 6
49.6
98.0
89 2
89.2
Recurr.
21.5
47.4
16.7
6.9
49.9
105.9
33.9
59.7
46.8
43.5
44.3
95.3
15 3
15.3
27 5
27.5
31 0
31.0
30 5
30.5
50 1
50.1
78 1
78.1
Avg absolute deviation
deviation of actual spending from budget
Aggre‐
Capital
gate
Total
Composition of C
ii
f
A i lt l S
Agricultural Spending
di
Composition of Federal Agricultural Capital Expenditures
Capital Expenditures
Niger Delta
Nat’l Cereal Res Inst Badeggi
Fi h i
Fisheries
Dep’t of Ag. Land Resources
Rural Development
Rural Development
Dept of Agriculture (Crops) Livestock and Pest Control
Fertilizer
Project Coord. Unit (PCU)
Total Ag. Capital Spending
Budget Actual
0.0
0.0
0.2
0.2
02
0.2
04
0.4
0.4
0.5
11 5
11.5
19
1.9
6.3
2.0
1.4
2.7
51.1
43.5
29.0
48.9
100
100
Subsectoral Composition of State Agricultural Capital Expenditures
Agricultural Capital Expenditures
CROSS RIVER STATE
RIVER STATE
Budget Actual N million
Fi h i
Fisheries
4 66
4.66
0 13
0.13
Livestock / Veterinary 5.96
0.38
Agriculture (Crops)
307.09 126.65
Total Ag. Cap. Spending
l
di
317.71 127.16
%
Fisheries
1.5
0.1
Li t k / V t i
Livestock / Veterinary
19
1.9
03
0.3
Agriculture (Crops)
96.7
99.6
Total Ag. Cap. Spending
100
100
KADUNA STATE
Fishery
i h
Livestock
Crops
Total
Fishery
Livestockk
Crops
Total
Budget
Actual N million
1,520
17
40,431
16,125
1,069,754 425,106
1,111,706 441,249
%
0.1
0
3.6
3.7
96.2
96.3
100
100
Bauchi: Functional Composition of Agricultural Expenditures
of Agricultural Expenditures
Ge e a
General
Administration
(26%)
Agricultural
A
i lt
l
Extension
(32%)
Food security
(1%)
Livestock (2%)
Crops DeveDeve
lopment (3%)
Machinery
Services (8%)
Input
Supply
(27%)
Agricultural
A
i lt
l
Marketing (>1%)
Detailed Composition of Federal Agricultural Capital Expenditures
Agricultural Capital Expenditures
• Starkly concentrated spending: 81% of all
spending goes to 3 out of 179 sub-items
– Fertiliser supply (43%)
– Food security component of NSPFS (22%)
– Grain purchase in SGR (16%)
• Purchase of inputs and outputs may have
public
bli goods
d character,
h
t b
butt question
ti off
balance in spending
Presidential Initiatives for Agriculture
(N million)
Vegetable Oil Devt Program
Increased Rice Production & Export
Tree Crops
Tree Crops
Cassava Production and Export
National Seed Service*
Livestock
Total
g
g
Vegetable Oil Devt Program Increased Rice Production & Export
Tree Crops
Cassava Production and Export
National Seed Service*
Livestock
Total
Budget
Actual Budget Actual
2001
2002
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0 00
0.00
0 00
0.00
0 00
0.00
0 00
0.00
0.00
0.00
0.00
0.00
0.00
0.00 10.38
5.01
0.00
0.00
0.00
0.00
0.00
0.00 10.38
5.01
2004
2005
67.03 48.93 22.77 17.85
53.75 48.93
0.00
0.00
67.03 48.93 22.77 17.85
67.03 48.93 22.77 17.85
0.00
0.00
0.00
0.00
0.00
0.00 38.37 38.37
254.83 195.73 106.67 91.92
Budget
2003
154.30
154.29
154 30
154.30
154.30
0.00
0.00
617.19
Act.
0.00
0.00
0 00
0.00
0.00
0.00
0.00
0.00
Conclusions and P li I
Policy Issues
Conclusions and Policy Issues
y
• Agricultural spending is very low by any
measure. But ...
• What does the very low budget execution
say about allocating more to the ag.
budget?
• If more is spent, how should it be spent?
C
Currently
tl a very hi
high
hb
budget
d t concentration
t ti
Conclusions and Policy Issues
y
• A careful look at the “big-ticket
big ticket items”
items is needed
– Expenditures on fertiliser supply
– Investments in National Special Programme for Food security
– Spending
S
di on grain
i purchases
h
• Applied research in these 3 areas, to assess
how increased spending should be balanced
against improved spending
• Presidential Initiatives have potential
potential, but
spending patterns don’t indicate careful planning
Conclusions and Policy Issues
(not discussed in presentation but in paper)
(not discussed in presentation but in paper)
• Urgent need to improve data and reporting
systems in Ministry (effective resource allocation
Å monitoring & evaluation Å data)
• Critical to clarify the roles of the three tiers of
governmentt in
i agricultural
i lt l spending
di and
d policyli
making
• Make
M k agricultural
i lt l strategies
t t i a meaningful
i f l
exercise
New Research on Investments for Agriculture
New Research on Investments for Agriculture
* F tili S b idi
* Fertiliser Subsidies ‐
Who gets to access them? What is their impact? * How do health interventions affect agricultural productivity?
A Few Future Research Questions
• Evaluation of Fertilizer Input Subsidies
– Does delivery mechanism matter to the impact of the
subsidy?
• Vouchers versus in-kind transfers versus unrestricted cash
transfers
– What is the most efficient subsidy?
• Cost versus impact on men and women farmers induced by
different amounts of subsidy
– What are the dynamic effects of input utilization on
household welfare and agricultural production over
the long term?
Proposed Future Research Design
p
g
• Research Design (Question 1 and 2)
– Conduct baseline survey of all villages
– Allocate vouchers, in-kind fertilizer, and unrestricted
cash transfers to subsamples of villages
– Conduct follow-up survey to measure the effects
• Dynamic Input Utilization (Question 3)
– Track previously surveyed households from Kaduna
State where a detailed household/farm survey was
undertaken
Proposed Future Research Questions (2)
• What is the impact of malaria on agricultural
worker productivity? (in coordination with WB and East Anglia)
– Motivation: Most favorable agro-ecological zones are
likely to be high risk malarial transmission zones
– Research Question: What is the impact of malarial
episodes on worker productivity, family labor supply,
and household income?
– Research Methodology: Provide free malarial
medication to a sample of plantations when their
g
workers have malarial episodes
p
agricultural
Research Activities
• Feasibility Study
– Identify geographic scope of study, collect
demographic information for accurate sampling,
contact local NGO collaborators to help implement
study, meet with local experts and government
officials to refine research design
• Tracking Survey
– Return to four villages previously surveyed in Kaduna
State to evaluate whether we can track households
and/or individuals who have formed new households.
Nigeria Agriculture Public Expenditure Review (NAGPER)
and Planned Research on Agricultural Subsidies
Tewodaj Mogues
Andrew Dillon
Thank you!