The federal government of Nigeria has announced plans to distribute 10 million free mobile phones to its farmers in 2013 in order to deliver fertiliser and seed subsidies to e-wallets on their phones. The roll out comes in sharp contrast to the Kenyan government's current gridlock in achieving any similar distribution of subsidised inputs, and makes Nigeria the first country in Africa to use electronic wallets to reach its farmers, in a system that is being built using Kenyan technology.
The free phone distribution is part of an electronic wallet programme that has already benefited more than 300,000 Nigerian farmers. The government has also rolled out a farmer’s help line in each local government area delivering agricultural information, to further encourage improved agricultural production - as it moves to diversify the country's economy away from its volatile oil revenues. In this, the government has given priority to achieving transparency in the distribution of subsidized fertilizer by ensuring there is no third-party interference. Fertilizer subsidy programmes have presented major challenges, everywhere, in stopping “leakage” and the sidelining of funds by entrenched cartels and middle men posing as farmers who then repackage the subsidised fertilizer and resell it at a higher price.
But the Nigerian government has now vowed to get beyond these obstacles in stimulating agriculture. “It would not be business as usual in the agricultural sector. The target now for the government is to reach out to 20million farmers between now and 2015,” said Nigeria's Ministry of Agriculture and Rural Development Minister, Dr. Akinwumi Adesina during a recent conference. Under the e-wallet scheme, an accredited farmer receives a fertilizer allocation through an e-wallet as a unique voucher number that also covers seeds and other inputs. The recipient then redeems the voucher for the farm inputs at subsidised rates after paying the top-up to specially appointed agro-dealers.
The successful roll out of the electronic distribution process by the Nigerian government may now create a model that could likewise solve other countries' issues with the misappropriation of funds meant for agricultural subsidies. This is made all the more significant in that the consequent fertiliser shortages have been cited in repeated studies as being the single greatest cause of food insecurity in sub-Saharan Africa. In Kenya, government subsidized DAP fertilizer sells for Sh2500, compared with a commercial price of Sh4000. But it is hard for government to identify the genuine farmers, meaning that many commercial stores and sellers buy at the subsidized rates before the farmers can access it, and then repackage for onselling.
This leaves many genuine farmers paying full price, and thus going short on fertiliser. The situation has been so dire that last planting season there was a national maize shortfall of four million bags putting some 10 million Kenyans at the verge of starvation. Yet the company now building the electronic system for Nigeria is Kenyan software company Cellulant, which earlier this year won the four-year Sh745m for creating and managing the e-wallet system.
Written by Bob Koigi for African Laughter