Thursday 31 March 2016

Readers' Comments on TSA



Readers' Comments
This column considers reactions of the readers to previous articles important. Such reactions are generally feedbacks to the issues raised in the articles and it is another way of allowing readers to make contributions to the column. This week, I am publishing some of the comments sent by readers of this column for your reading pleasure. My dear readers, you can access my previous articles from my blog; www.breakthroughwithmkothman.blogspot.com
Technological Feats of Agricultural Engineers in Nigeria
Dear M. K. Othman,
Thanks for your interesting articles, I am particularly interested in the articles on agricultural mechanization especially the feats achieved by Agricultural Engineers in Nigeria. The desire for our nation to transform these prototypes machines for the benefits of farmers cannot be overemphasized. However, the question is; how ready is the Federal Ministry of Agriculture to create employment among the youths using various technological innovations? For us, as a nation to achieve agricultural revolution, I wish to suggest the followings:
1.     For the Federal Ministry of Agriculture and Development to function effectively and respond to the demand of the nation, the Hon Minister must reform the ministry to have the following departments: Finance and Investment, Production, Marketing & Research, Corporate Communication/Farmers Information Service, as well as Legal/Land Administration. Anything short of re-positioning the ministry along this line will clearly mean that PMB’s administration is not ready to make farming a business.
2.    PMB-led administration must define who a modern farmer is vis-a-viz, the desire of government to provide employment via agricultural sector. In determining who the farmer is; government can then determine the level of Mechanization that could be adopted to accommodate the youths.
3.    Another factor that must be taken into account is access to land. Government has to put in place a simple way to acquire land for agricultural purposes. Virgin lands have to be cleared and feeder roads constructed for easy access to cleared farm lands
4.    The government must make decision between full Mechanization and current Fertilizer agricultural policy. Shamefully, it was in the twilight of 2013, when United Nations hinted that Africa will suffer hunger and starvation, unless, they embark on full Mechanization, the then ministry  of agriculture, under Dr. Akinwumi Adesina embraced mechanization albeit, in an unwilling manner. It was clear the previous government had no intention of going into mechanized agriculture then but for UN’s intervention.
5.    Above all, Ministry has to resolve the cold war between Agronomists and Agric Engineers. This raging cold war has greatly retarded the growth of agriculture in Nigeria generally. Experts in the sector believe that agronomists have hidden fear that if Agric Engineers are allowed to play their natural role in the ministry, they, the Agronomists, would be relegated to the background. As a result of this fear factor, efforts at full mechanization of agriculture in Nigeria, has always been frustrated by the Agronomists and Agric Economists in the ministry. Further, Agric experts find it difficult to understand what the authorities in the ministry of agriculture mean by DRY FARMING, if it is not a deliberate effort on their part to shield Irrigation Engineers from having a say in the ministry. The fear of agronomists here is, once you call it irrigation farming, it then mean that Irrigation Engineer must be in-charge, this, they don’t want at the expense of the advancement of agriculture in Nigeria.
6.    In the area of granting loan to farmers, government must ensure that only the genius farmers get access to the loan. A situation where Agric loans are given to those entrepreneurs engaged in food processing, should not be encouraged by Chief Audu Ogbeh led Agriculture ministry. For instance, anybody involved in the business of Rice mill cannot in strict term, be called a farmer, because he is involved in food processing. Not agriculture.  He is at best, an entrepreneur. Core agricultural process terminates at a point the farm produce are ready for sale, this is called Farm Gate. After the farm produce are sold, the next category of people involved are either said to be into food or industrial processing, not farmers in the real sense of it.

Now that Chief Audu Ogbeh has spoken forcefully on full mechanization of Agric to provide employment for the teeming unemployed youths in Nigeria; what is urgently needed is a comprehensive blueprint towards this laudable agenda. Speaking in Ilorin, Kwara State on Wednesday, January 13, 2016, on the flag off of the second phase of Agricultural Equipment Hiring Enterprise [AEHE], Ogbeh identified the problem of agriculture in Nigeria as well as government’s planned response to the problem. To his diagnosis, experts in the sector are totally in agreement with it.  However, in formulating the required blueprint, the minister needs not to look far; he only needs to pick-up a book called: Memo To The President, The Challenge of Agricultural Development in Nigeria by Dr. Clement Kanshio Kaase. I hope this contribution will help to assist Nigeria achieve food sufficiency and poverty alleviation, amen
Emeka Oraetoka is, oramekllis@lycos.com

Treasury Single Account: Buhari's Bold Step and the Journey So Far
Dear M. K. Othman
Your article on TSA is an eye opener to what was taking place in MDAs in Nigeria. It is obvious that the primary benefit of a Treasury Single Account is the mechanism it provides for proper monitoring of government receipts and expenditure. In the Nigerian case, it will help to block most if not all the leakages that have been the bane of the growth of the economy. We have a situation where some Ministries, Departments and Agencies manage their finances like independent empire and remit limited revenue to government treasuries. Under a properly run Treasury Single Account, this is not possible as agencies of government are meant to spend in line with duly approved budget provisions. The maintenance of a single account for government will enable the Ministry of Finance monitor fund flow as no agency of government is allowed to maintain any operational bank account outside the oversight of the ministry of finance. As a matter of fact, deposit money banks stand to lose immensely from the implementation of Treasury Single Account.  This is because of the fact that public sector funds constitute a large chunk of commercial banks deposit.  Indeed, it is estimated that commercial banks hold large amount in trillion public sector funds.  The impact of this amount of money leaving the system can be imagined when one considers the fact that each time the monthly federal allocation is released, the banking system is usually awashed with liquidity and as soon as this public sector funds dries up through withdrawal by the states, liquidity tightens again with interbank rates going up.  Of major impact will be the movement of funds of revenue generating parastatals such as the NNPC, out of commercial banks. The implication of the policy Treasury Single Account, Banks will continue to device means of mobilizing funds from the private sector.  We see a return of the era when women are employed by banks specifically for deposit mobilization and tacitly encouraged to use any means necessary to get funds.  We see increase in deposit interest rates as a major means of inducing customers and most importantly we see a drop in lending and in the profitability of banks, at least, in the short to medium term until they fully come to terms with the impact of the policy and begin to properly position themselves for true banking business.  Ultimately, we see the share price of these banks falling as investors attempt to price in the policy impact. However, the implementation of this programme is a critical step towards curbing corruption in public finance. This is a tool to combat corrupt practices, eliminate indiscipline in public finance and ensure adequate fund flow that will be channeled to critical sectors of the economy to catalyze development. With TSA at the corner, Nigerians must learn to make budget and work with budget. Bravo M. K. Othman for this well enlighten information on TSA.
Dr. Muhammad M. Usman, muttaka@yahoo.com

Dear M. K. Othman
This is an excellent information gathering on TSA. More grease to your elbow for taking your time to educate public on TSA.
Mr. Nuhu Ishaya, ishayanuhu2006@yahoo.com


Made in Nigeria Tractor "NCAM TRIKE-TOR", Veritable Window for Mechanizing Agriculture in Nigeria



Made in Nigeria Tractor "NCAM TRIKE-TOR", Veritable Window for Mechanizing Agriculture in Nigeria
Nigeria, a "giant of Africa" with vast agricultural land endowed with substantial natural resources that include 68 million hectares of arable land; fresh water resources covering about 12 million hectares and 960 kilometers of coastline. Nigeria has a diverse ecology, which enables the country to produce a wide variety of crops and livestock, forestry and fisheries products. Yet, Nigeria has not been able to produce enough food to meet the demands of its citizenry. Thus, Nigeria resorts to massive food importation on annual basis, for instance Nigeria annually imports an average of 1.8 million metric tons of rice and 200,000 metric tons of soybean among other crops. This ugly trend has to be reversed to place the country on the path of progress, a path that will make Nigeria to produce enough food for home consumptions and exportation. The  cardinal key for reversing the trend is "mechanization" of agriculture in Nigeria.   Agricultural mechanization must be harnessed, controlled and organized for improved agricultural practice. In simple terms Agricultural mechanization is the replacement of human and animal labour by mechanical devices in farming activities. Thus, agricultural mechanization is the process of adopting agricultural machines and technology and substituting human and animal power with machines for agricultural production practices. This leads to higher productivity of farm worker. Besides improving production efficiency, mechanization encourages large scale production and improves the quality of farm produce. In order to fully embrace agricultural mechanization, one of the inputs needed by farmers especially the youths is the tractor and its implements. Use of manual labour is one of the major factors affecting the progress of agriculture in Nigeria as mechanized farming operation encourages the use of farm tractors. Tractor is capable of changing the status of mechanization in Nigeria within a season.
Tractor is the power house for agricultural mechanization and a major indicator for assessing level of agricultural development for a country. FAO recommended 0.2 Hp/ha tractorization density level for developing countries while developed countries have 1.2 Hp/ha indicating high level of agricultural mechanization and productivity, making it possible for one man to produce food for more than 100 people in a given season. Tractor is a very important ingredient in mechanizing agriculture and the number of tractors per giving area shows the level of agricultural mechanization. In this respect, Nigeria is far lagging behind. A study in 2010 revealed that Nigeria had an average of 7 tractors for every 100 square km (10,000 ha) of arable land while 100 and 1,900 tractors per 100 square km were recorded Algeria and South Africa respectively. The result of 2015 Agricultural Performance Survey (APS) conducted by NAERLS and eighteen relevant agencies recorded 928 and 422 government and privately owned functional tractors in Nigeria in the year 2015. The record showed 537 and 77 government and privately owned non-functional tractors out of the total records. Although, these records of tractors are under estimated as many Nigerians are known to be poor in record keeping; "there was dearth of proper records of farm machinery and equipment that impair development planning for enhanced agricultural productivity" quoted from the 2015 APS  report. Why are tractors seem to be inadequate on our arable land?
The major reason for inadequate tractors on Nigerian farms is high initial cost of acquiring a brand new tractor. The average cost of large range tractors (150-200HP) is about N26 million  ($162,500.00), medium range (65-80 HP) is N6.5 million ($40,625.00) and small range tractors N4.0 million ($ 25,000.00). The costs are for the tractors without implements. The average costs of implement in 2015 were N550,000 for harrow, N575,000 for 3 bottom disc plough,  N600,000 for 3 furrow ridger, N1.1 million for 5-ton tipping trailer, N400,000 for 2-bottom disc plough and N400,000 for 2-furrow ridger. These costs are far beyond the affordability of small holder farmers who constitute more than 80 % of the farming population in Nigeria. In addition, other problems associated with conventional tractors for farming operation in Nigeria today are attributed to high cost of maintenance, frequent damage due to improper use, and non-availability of spare parts and specialized technicians for repairs. This is not surprising as the conventional tractors were manufactured from foreign lands with differences in soil, ecology and climate. All these factors make it difficult to have a sustainable tractor environment, especially, considering the high level of poverty experienced in Nigeria today. Due to the economic level of smallholder farmers in Nigeria, there is the need to provide a cost effective alternative to hand tools, animal draft and conventional tractors in transforming the smallholder farmers from their present land holdings of 1 to 2 ha to a large holding status of about 5 to 10 ha. In order to address these myriad problems, National Centre for Agricultural Mechanization (NCAM) worked hard to develop made in Nigeria tractor named "TRIKE-TOR"
The National Centre for Agricultural Mechanization (NCAM) located in Ilorin was established to provide technologies for mechanizing Nigerian agriculture. Among the indigenous technologies developed by this Centre is the trike-tor. The NCAM developed trike-tor is a 3 wheeled and 30 horse power mini-tractor that was developed from the concept of a motorcycle. It was designed to carry out similar duties as that of a conventional tractor but at smaller scale. This makes it ideal for smallholder farmers, thereby, increasing their productivity. The aim of developing the NCAM trike-tor is to solve one of the greatest problem bedeviling the smallholder farmers in Nigeria who needs a cheaper and affordable source of farm power for boosting agricultural productivity. The trike-tor was made from component parts that were sourced, produced, fabricated and locally assembled. This made in Nigeria tractor developed and fabricated by NCAM is the most appropriate intermediate technology Nigerian farmers need in filling up the gap today because: -
i.         The developed trike-tor at NCAM is efficient for operation in terms of work rate, quality of work done, fuel economy and ease of maintenance.
ii.       The developed trike-tor at NCAM can conveniently carry out tillage operations commonly required in Nigeria and is suitable for use in all types of soils found in Nigeria.
iii.      The lightweight of the trike-tor favours its use in Nigerian agriculture as the problem of soil compaction, resulting from the use of bigger tractors, has been taken care of.
iv.      The developed trike-tor at NCAM is affordable and easy to maintain when compared with conventional tractors. The trike-tor can act as a form of transportation when the trailer is attached to it.
The most attractive aspect of trike-tor to farmers is the cost of acquisition. Despite the dwindling value of Naira when compared to US Dollar, the cost of acquiring  trike-tor with three set of  implements (Harrow, Plough and Trailer) is estimated to be N2 million.  
This painstaking breakthrough achieved by NCAM was not done in a day. It is a product of 11 years of continuous research and developmental effort in active collaboration with a private sector.  NCAM collaborated with Bespoke Design Concepts (BDC) Limited, Lagos and developed series of prototypes of the farm bike within this long period of uninterrupted work before coming up finally with the design of NCAM developed trike-tor. The developed prototypes over the years have been tested in ensuring better performance of the farm bike. In the recent field test carried out on NCAM developed trike-tor during ploughing operation, with a two-bottom disc plough, on a sandy loam soil, showed that it recorded a travel reduction (wheel slippage) value of 19.42%, effective field capacity value of 0.2975 ha/h, time of operation value of 3.361 h/ha, field efficiency value of 80.99%, speed of operation value of 5.54 km/h, depth of cut value of 21 cm and width of cut value of 66.31 cm. More importantly, it recorded fuel consumption values of 4.25 l/ha and1.26 l/hr. The matching implements that have so far been developed alongside the trike-tor are two-bottom disc plough, tine cultivator and trailer. The Centre has further plans to develop more matching implements that will make the trike-tor handle more farming operations aside the common farming operations relating to ploughing, harrowing and transportation.
Development of trike-tor has laid a solid foundation for mechanizing agriculture in Nigeria, and indeed African sub-region. To build on this solid foundation, government has to create enabling environment for manufacturing industry to come in.  We need to search for credible manufacturing companies within or outside the country who will take the gauntlet from NCAM and mass produce the trike-tor and implements for easy access to the farmers. Mass production will reduce the unit cost of the machine and implement thereby making the technology available and accessible to small holder farmers.  This intervention will certainly help increase the smallholder farmer’s productivity by 100%. which in turn will increase the nation’s agricultural output. It is my hope that the relevant stakeholders will do the needful. 




Friday 11 March 2016

Treasury Single Account: Buhari's Bold Step and the Journey So Far (II)



Treasury Single Account: Buhari's Bold Step and the Journey So Far (II)
The brouhaha between National Assembly, Systemspecs - Remita and CBN is yet to be resolved, Systemspecs is making a sprouted effort to defend her “legitimate earning” of the 1 % as reported in the media. John Obaro, CEO of SystemSpecs owners of Remita reacted to the Senate order to slash the N7.6 billion accrued charges to his organization, commercial banks and Central Bank of Nigeria (CBN) from transfers to treasury single account (TSA) by government agencies to a meagre sum of N656.504 million. Mr Obaro dismissed report in some section of the media that the Senate accused Remita of under-delivering on the substance of the contract, instead, he said the Senate recognised the company’s effort having played a significant role in the life of the nation when it mattered and that the disagreement has only been on the commercial terms of the contract “The Senate Committee further recommended that SystemSpecs’ efforts should be rewarded – albeit on a scale which is quite debatable,” as reported in the media. Nigerians are expecting the relevant authorities to quickly and amicably settle the issue without further short changing Nigeria on the hard earned income. SystemSpects or similar private enterprises can be engaged to develop the capacity of relevant personnel in the government to handle the technical requirements for efficient and successful operation of the TSA.  
 Lack of effective ICT-infrastructure in Nigeria  is another source of apprehension on the use of TSA, the operation of the TSA depends largely on the use of ICT, necessary infrastructure and skilled personnel to achieve the desired goals. Implementation of TSA policy in a given country depends on the stage of development, quality of its public institutions and financial management systems, its technological development and communications infrastructure, and the degree of maturity of its banking system. In Nigeria, weak infrastructure, poor ICT services and tendency of the policy implementers to manipulate it for personal aggrandizement cause apprehension on functionality and sustainability of the TSA policy. 
So far, the TSA Model is being implemented in Nigeria with record of successes despite these apparent apprehensions. Last month (February 2016), President Muhammadu Buhari confessed that his administration had saved N2.2 trillion in three months through the enforcement of the Treasury Single Account (TSA). He made the revelation in London during a meeting with Nigerians resident in the United Kingdom. He was quoted “We are really in trouble. What we discovered was that we tried to enforce what we called treasury single account, TSA. And the reason was simple. This government did not initiate it. It was the previous government. But it was so unpopular to the bureaucracy and the previous government for its own reasons couldn’t enforce it. But when we came and found that we were broke, we said this is the way to do it. And I will just tell you two examples to convince you,” He further said. “First, NNPC, the cow that was giving the milk had more than 45 accounts, Ministry of Defence, that is the military Army, Navy and air force had over 70 accounts. Tell me which account we can trace in these several accounts. So we enforce TSA. We said there must be TSA. By the end of December, coming to January this year, that is last month, we mopped up more than N2.2trn which we have used through the bureaucracy system to raise vouchers and sign cheques so that they don’t go into the next budget.” The N2.2 trillion was raised to 0.7 trillion within one month as reported by the Honourable Minister of Finance, Kemi Adeosun who revealed how much Nigeria has in her Treasury Single Account (TSA). She said the account had accumulated to N2.9trillion, from its initial N2.2trillion in February, 2016. Adeosun however, said the total of sum may not be used to fund the proposed N6.08trillion budget because some part of it will go as operating cost for key revenue-generating agencies of the federal government. Many other commendable discoveries were made as a result of TSA adoption in Nigeria and its advantages outweighed its disadvantages for Nigeria. To buttress this point, the Finance was quoted as saying “TSA has eliminated opportunities for brokerage and other corrupt practices that previously encouraged agencies to accumulate funds with commercial banks rather than apply them to their intended uses. We believe that this will reduce payment delays to contractors, minimise late payment penalties and will consequently improve project completion times and service delivery. TSA has corrected the practice of government borrowing short term funds at high rates of interest, whilst simultaneously having idle funds in various bank accounts.”

Nevertheless, operation of TSA policy in Nigeria faces many challenges; among the teething ones is delay in receiving payment from TSA. Beneficiaries might wait up to three weeks without receiving credit alert after the due process has been completed. This is a serious setback with grave consequence in financial system. ‘Time is money” is an adage best practiced in banking industry; interest rate is time and volume of money dependant, example a 3-week delay in the payment of N1 billion can result to the loss of N11 million at the annual interest rate of 20%. Although, in Nigeria, Banking services are sometime an eyesore in respect time efficiency, it is a common practice to spend hours while waiting to withdraw from ATM or trying to cash a cheque. Customer has nobody or where to complaint as everyone including the bank staff blames the “network” as if this network is not a man made system. For STA to work, banking system must be efficient.
The other challenge is ensuring the receipts paid into TSA are true and correct revenues for the government. Who are to be held responsibilities for making sure that this done? Perhaps, auditors? Well, if auditors were discharging their duties according to the rules, the corrupt practices in Nigeria wouldn’t have reached this exponential proportion. So, government must put in place a transparent and foolproof system to ensure that all government’s dues are correctly paid into STA as at when due.
Lastly, another challenge for implementing STA is ensuring that all existing laws are respected. This is one area where ASUU expressed concern on implementation of TSA in Universities. ASUU is a highly responsible union and the number one stakeholder of university system, the protection of interest of the university system in Nigeria is cornerstone of ASUU struggle and thus it is not entirely opposing  the implementation of STA in Nigeria. However, ASUU concern borders on the university autonomy; what is the role of individual university council on the university finances and TSA operation? Will the operation of the TSA not erode the power of the university council as stated in the university laws? Fortunately, ASUU is not a wheel chair critique, whenever ASUU criticizes an issue it provides alternative. So, government should challenge ASUU to provide the best way to implement TSA in universities without eroding the their autonomy. The confrontational posture being exhibited by government officials on the issue is not healthy, we don’t want anything to disturb the relative peace currently being enjoyed on our campuses.
The Buhari’s breakthrough in TSA implementation has to address these challenges  to achieve the desired results. Furthermore, government must continue to study the policy implementation for improvement as rightly observed by Guardian Newspaper in its editorial of 18/2/2016 "The long-drawn-out implementation of the federal Treasury Single Account (TSA) rule has come to a near conclusion with euphoria upon the discovery that there is at present an average daily balance of N2.3 trillion in the account. Because these TSA funds had hitherto been suppressed and hidden from the federal budgets, they are additional to the Federal Government's share of the Federation Account (FA). The daily balance is uncannily a shade higher than the preliminary 2016 Budget deficit of N2.2 trillion. The President's 2016 budget address to the National Assembly indicates the fiscal deficit in part "will be financed by a combination of domestic borrowing of N984 billion and foreign borrowing of N900 billion" Nonetheless, some of claims are open to question. For example, public corruption would still luxuriate on padded project costs and fees. Also the TSA collections were in different currencies. So there was embedded corruption when some agencies that collected revenue in foreign currencies reportedly remitted only Naira amounts into the TSA. Therefore, remittance should be made as earned in various currencies just as the daily balance should reflect those currencies. Two-thirds of the loanable bank credit remains idle because the economy not only lacks macroeconomic stability with a conducive production environment but also, suffers high inflation-induced restrictive monetary policy stance with attendant unattractive high lending rates".
President Buhari is on his way to make history with his bold step in TSA implementation but he needs the political will and the support and understanding of all Nigerians to achieve success, ride on Baba!