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. 

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!

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

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

“Our adoption of the Treasury Single Account has resulted in the blocking of financial leakages in the public sector, making more funds available for the business of governance and ensuring the welfare of our citizens" President Muhammadu Buhari, 13th November, 2015

Treasury Single Account (TSA) is a public accounting system under which all government revenue, receipts and incomes are deposited into one single account or a network of accounts with one control. TSA is usually maintained by the country’s Central Bank and all payments are done through this account. The primary purpose of TSA is to ensure accountability of government revenue, enhance transparency and avoid misapplication of public funds. The maintenance of a Treasury Single Account helps to ensure proper cash management by eliminating idle funds usually left with different commercial banks and in a way enhance reconciliation of revenue collection and payments of government finances. Control of finances centrally ensures transparency and accountability in governance in addition to blocking of financial leakages, which end up in private pockets.   TSA is simply a strategy for government financial management of public funds and is being practiced in some countries because of the apparent benefits.  There are many advantages of TSA as outlined in the IMF 2010 paper titled "Treasury Single Account: Concept, Design, and Implementation Issues". Some of the benefits are:

1. Allows complete and timely information on government cash resources. In countries with advanced payment and settlement systems and an Integrated Financial Management Information System (IFMIS) with adequate interfaces with the banking system, this information will be available in real time. As a minimum, complete updated balances should be available daily.
2. Improves appropriation control. The TSA ensures that the Ministry of Finance has full control over budget allocations, and strengthens the authority of the budget appropriation. When separate bank accounts are maintained, the result is often a fragmented system, where funds provided for budgetary appropriations are augmented by additional cash resources that become available through various creative, often extra-budgetary, measures.
3. Improves operational control during budget execution. When the treasury has full information about cash resources, it can plan and implement budget execution in an efficient, transparent, and reliable manner. The existence of uncertainty regarding whether the treasury will have sufficient funds to finance programmed expenditures may lead to sub-optimal behavior by budget entities, such as exaggerating their estimates for cash needs or channeling expenditures through off-budget arrangements.
4. Enables efficient cash management. A TSA facilitates regular monitoring of government cash balances. It also enables higher quality cash outturn analysis to be undertaken (e.g., identifying causal factors of variances and distinguishing causal factors from random variations in cash balances).
5. Reduces bank fees and transaction costs. Reducing the number of bank accounts results in lower administrative cost for the government for maintaining these accounts, including the cost associated with bank reconciliation, and reduced banking fees.
6. Facilitates efficient payment mechanisms. A TSA ensures that there is no ambiguity regarding the volume or the location of the government funds, and makes it possible to monitor payment mechanisms precisely. It can result in substantially lower transaction costs because of economies of scale in processing payments. The establishment of a TSA is usually combined with elimination of the “float” in the banking and the payment systems, and the introduction of transparent fee and penalty structures for payment services. Many governments have achieved substantial reductions in their real cost of banking services by introducing a TSA.
7. Improves bank reconciliation and quality of fiscal data. A TSA allows for effective reconciliation between the government accounting systems and cash flow statements from the banking system. This reduces the risk of errors in reconciliation processes, and improves the timeliness and quality of the fiscal accounts.
8. Lowers liquidity reserve needs. A TSA reduces the volatility of cash flows through the treasury, thus allowing it to maintain a lower cash reserve/buffer to meet unexpected fiscal volatility.

In Nigeria, the Operation of "Consolidated Revenue Fund of the Federation" similar to TSA is a constitutional issue because Section 80(1) of 1999 Constitution as amended states "All revenues, or other money raised or received by the Federation shall be paid into and form one Consolidated Revenue Fund of the Federation". However, successive governments have continued to operate multiple accounts for the collection and spending of government revenue in total disregard to the provision of the constitution, which requires that all government revenues remitted into a single account. Nevertheless, in 2012, the Federal Government operated a pilot scheme for a single account using 217 MDAs as test case. The pilot scheme was reported to saved Nigeria about N500 billion. Despite this success, the immediate past government could not continue with the policy.  It is true that the Peoples Democratic Party (PDP)  led government  under the  former President Jonathan formulated the TSA policy. However, due to weak regulations and high level of corruption of previous government, several Ministries, Departments and Agencies (MDAs) of that era refused to conform with the TSA policy. The truth of the matter is that former  President Goodluck Jonathan  lacked the political will and audacity to force the adoption of TSA policy in all the MDAs. The present government of Muhammadu Buhari came to power  with people mandate to principally fight corruption and move the country towards economic development and poverty eradication. Right from the time he was sworn in, President Buhari did not leave  anyone in doubt that he was truly out to fight corruption as part of the change he promised Nigerians during his electioneering campaign for the presidential seat. In Africa,  President Buhari has an unblemished reputation for integrity, due process, transparency and the rule of law (Digressing; I watched one of the candidates in Niger Republic using the picture of Buhari  during electioneering campaign). Thus, the issuance of Directive to all the MDAs for compliance to Adoption of the STA was among the first steps of President Buhari's government. The directive of the government that all revenues should be remitted to TSA is in compliance with the provision of 1999 Constitution.

The insistence by Federal Government on the adoption of TSA means fiscal discipline, efficiency, and accountability, on the part of government. In fact, this  TSA policy has certainly blocked government’s revenue diversion and looting in addition to leading to the consolidation of government revenues, incomes, and receipts, it might lead to the optimal utilization of government cash resources, including creative investment of public funds in the critical development sectors of the economy.

In spite of the immense benefits of TSA, the policy is fraught with apprehension especially in the banking sector. 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 about N2.2 trillion public sector funds at the beginning of the first quarter of 2015. The mopping of public sector funds from the commercial Banks as directed by the TSA policy has some negative implications to the Banking Industry. Banks enjoyed governments' funds deposit especially fixed deposits that help them to invest and reap hefty dividends.  Some of these funds are sometimes not withdrawn for six months or even more and banks trade with them and make profits. So, once this business angle is shut, certainly the banks will bleed, so Banks employees may be apprehensive about their future. TSA might have led to the closure of about 10,000 multiple bank accounts operated by MDAs in commercial banks, banks have to wake up from their slumber. The opinion of some financial experts  is that with full implementation TSA, the era when government’s money is either lent back to government or invested in forex speculations is over. With TSA, government can easily quarantine its revenues, with intended consequences including forcing interest rates to naturally nose dive, since no serious business should be ready to borrow at such double digit rates when the economy is struggling at between 4 and 5 percent. Consequently, the TSA has forced banks to leave their comfort zone caused by dependence on government money to now become as creative and innovative as it is the case in modern economies around the world where banks have to seek private deposits through investment in the real sector of the economy. This means that while TSA will ensure accountability on one hand, but on the other hand the banks have ready to recapitalize to stay afloat.

Another apprehension to the implementation of TSA in Nigeria is the engagement of the consultants named "SystemSpecs - Remita" as facilitators of the TSA implementation at the handsomely reward of 1 % of the funds deposited into TSA. This caused uproar at the Senate in November, 2015. Senator Dino Melaye moved a motion calling on the Senate to investigate the implementation of the TSA alleging that the company implementing it had made N25 billion for “doing nothing” Melaye observed that in the course of the operations of the TSA, the Federal Government on September 15, 2015 mopped up the sum of N2.5 trillion through Remita, which charges 1 per cent of all monies passing through it, amounting to N25 billion describing the 1 per cent charges by Remita as an attempt to rip Nigerians of taxpayer’s moneys. In addition, the Senate made an observation regarding the appointment of Remita-SystemSpecs, that the appointment was a gross violation of Section 162 (1) of the 1999 Constitution and the Banks and Other Financial Institutions Act 2007. Apparently, this debated issue at the floor of the Senate made Central Bank of Nigeria to issue a circular directing banks involved to refund N3.053 billion into government treasury while  Systemspecs, the consultants were similarly requested to refund N3.812 billion they collected as fees and charges on the operation of TSA as reported by Vanguard (To be continued next week).