When Nigerian farmers went digital…

nigerian farmer

The application of science and technology has no doubt improved the livelihoods of Nigerian farmers. This is a case study of Nigeria Farmer’s E-wallet System, the first in Africa, which is indeed worth of emulation and implementation by other African nations.

In October 2011, the Federal Ministry of Agriculture and Rural Development, Nigeria under the leadership of the –then- minister, and present President of Africa Development Bank, Dr. Akinwunmi Adesina, introduced one of the largest agriculture transformation programs in the world.

The Problem

The central idea is to bring structure to the historically chaotic inputs distribution system in the agriculture sector by integrating farmers into an ecosystem in which the farmer has access to inputs (fertiliser & improved seeds), finance (credits and loans) , technology (mechanisation) , markets (local buying agents and price stability / transparency mechanisms) and information (weather, pricing cultivation, best practices etc). This ecosystem was designed around what is known as “e-wallet technology and business processes”.

This transformation has to be done because historically the government has always provided subsidized seeds and fertilizers nation-wide. The system relies on government procurement and distribution. The private sector has always tendered for the fertilizer and seed supply, under a massive fertilizer and seed contracting system. The system was found to be fraught with many problems. The government input procurement and distribution system was very inefficient and costly, and suffered from corruption, and displaced private commercial sales of fertilizers.

As a result, only 11% of poor smallholder farmers in Nigeria got the government subsidized inputs. Majority of it ended up on farms from influential figures, or re-sold on the open market at high profit margins, and in neighboring countries. Despite the huge sums spent on fertilizer subsidies, rural poverty continued to rise and fertilizer use was still less than 10 kilograms per hectare, compared to over 100 kg per ha global average. The level of use of improved seed is only 8,000 MT annually, by only 5% of farmers, compared to the potential effective demand of 1 Million Metric tons

It was clear the government needed to make a change and the change is the implementation of the program we call GES – Growth Enhancement Support.

The Solution: “GES”

The Growth Enhancement Support (GES) Program is a component of the Agriculture transformation agenda of the federal Government of Nigeria. It seeks to lift 20Million poor farmers out of subsistence into self-sufficiency from the 6 geopolitical zones

The GES program puts the resource constrained farmer at the center of the agriculture inputs (fertilizer & improved Seeds) distribution value chain and creates a series of incentives to encourage the critical actors in the value chain to work together to improve the productivity, food and income security of the Nigerian farmer.

The GES program stimulates demand for fertilizer by putting a cash component of the product value directly into the hands of the farmers via   mobile wallets or e-wallets.

The GES framework

The GES framework has 4 pillars:

GES as a Concept: a conceptual framework designed to lift 20 Million smallholder farmers out of subsistence into self-sufficiency through market-led approach to agriculture, production, processes and markets from the 6 geopolitical zones;

GES as a Scheme: an arrangement that gets government out of the procurement and distribution of farm inputs and gets private sector actors such as Banks, producers, distributors, agro-dealers to own the value chain for farm inputs. It stimulates demand for farm inputs by putting a cash component of the product value directly into the hands of the farmers via e-wallet. It promotes markets by linking farmers to uptakers.

GES as a set of business Processes: a set of business processes that allows Government to identify farmers and link them to agro-dealers, financial institutions and markets using the e-wallet technology.

GES as a Technology: e-wallet is a set of business rules and technology that brings together the concept and the processes and lay out a set of procedures to be followed, hence a convergence point is created through which the farmers receive GES support from the FGN and SG, is linked to an agro-dealer, to a suppliers, to financial institutions and to insurance schemes.

“E-Wallet”: How GES comes “to the farmer”

The wallet is the convergence point through which the farmer

  • Receives GES support from the FGN & SG;
  • Exchanges (pay) the support after adding his own funds for fertilizer and Seeds from agro-dealers;
  • Receives vital and relevant Agro-information alerts
  • Becomes visible as a real person to the
    • farm inputs supply chain,
    • financial system ; and
    • is available to the Agriculture extension system.
  • Participate in micro-lending & insurance schemes
  • It enables a SYSTEM rather than a ISSUE approach to agriculture sector development

Scope and impact of GES

The E-wallet system was operated and implemented by “Cellulant” corporation through Nigeria Ministry of Agriculture and Rural Development has been used for 5 programs (Wet Season 2012, Flood Relief 2012 , Dry Season 2012, Wet Season 2013, Dry Season 2013, Wet Season 2014, Flood Relief 2014 and Dry Season 2014). In year 1 on behalf of the FGN in 35 States + FCT with about 754 LGA’s. It required the participation of 25 suppliers, 836 agro-dealers manned in 900 redemption sites.

Cellulant Corporation handled the 3 key aspects of the GES operations – technology, Supply Chain Management & Redemption Centre operations. In Year 2; the institutional arrangements was expanded to include 3 supply chain managers who took over responsibility for supply chain management and redemption center operations while cellulant focused on overall program coordination and operation of the e-wallet system. In year 2, 74 suppliers, 1450 agrodealers operating almost 1600 redemption sites participated in the programs.

Results from GES

In the first 20 months of implementation of e-wallet, 6 million farmers which includes more than 450,000 women participated in GES and received subsidized fertilizer and improved seeds

Furthermore, in 2012, Nigeria added 8 Million metric tonnes of food to the national food supply and in less than 160 days, though E-wallet, 150,000MT of fertilizer and about 10,000MT of seeds were supplied to agro-dealers, and distributed to 1.2million farmers. In 2013 Nigeria added 20million metric tonnes of food and distribute almost 450000MT of fertilizer and 50000MT of seeds to farmers, 33million transactions (deposits & payments) were conducted on the system in various languages – Hausa 45%, English 25%, Yoruba 17%, Pidgin 12% and Igbo 1%. Women represented 3% of all transactions.

Cellulant effected during this period almost 33Billion naira of subsidies disbursements on behalf of the FGN and State Governments into the wallets of farmers; unused funds, which potentially might have been lost to corruption, was returned back to Government coffers.

Despite the challenges of poor road infrastructure, low quality of service from mobile phone network providers, inadequate quantity of seeds; low number of agro-dealers, the GES program already proved to be a success, and an example for the region.

Blogpost and picture by Abe Oluwayomi Kayode, yommi.abe(at)gmail.com, #AASW7 social reporter.
This post represents the author’s views only.

2 thoughts on “When Nigerian farmers went digital…

  1. Kudos Oluwayomi Abe.
    I was a beneficiary of GES (Fertilizers and maize seeds) for two years- 2013 and 2014 and I was stress- free transaction.
    Hope, pray and wish the scheme is continued and sustained by the Buhari government and subsequent ones.

  2. I’m very impressed by the GES programme, especially how Cellulant handled it successfully.

    This is another proof that digitization is a major step to eliminating corruption in industries and sectors that are greatly suppressed by corruption.

    Great post!

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