Furore in Nigeria over real benefits of Zimbabwean farming investors

by Emmanuel Mayah

The announcement of what was called a "strategic sales offer" on The Shonga Farms Ltd. has yielded unsavoury payoffs for Nigeria's Kwara State government. In a paid advertorial in a national daily on 15th February 2007, the Kwara State government announced that "the Shonga F.H. Ltd has attracted investments up to the value of one billion naira ($8 million) in both loans and equity for the company from two major banks in Nigeria."

The advertisers went on to express pride in the N1 billion as a mark of growing confidence by investors in the state's commercial agriculture initiative. They rounded off by saying, "We are optimistic that in the days ahead, other investors will pay attention to the huge profit potentials and commercial viability of this project and buy in."

If the newspaper advertorial was calculated to stave off mounting cynicism over the invitation and terms of engagement of white Zimbabwean farmers in Kwara State, it ironically produced the opposite effect. Scores of stakeholders dismissed the N1 billion investment as a suggesting that the deal with the Zimbabweans is ridiculously benevolent to them.

Documents suggest that in trying to woo the Zimbabwean farmers and put Kwara State on the map as "the leading agricultural economy in Nigeria and the West African sub-region," the administration of Governor Bukola Saraki may have been less than adroit in its negotiations with the farming sojourners.

Insisting that the Zimbabweans got a good part of Kwara State for a song, a one-time Commissioner for Agriculture in the state, Akogun Iyiola Oyedepo, said that contrary to initial belief, the Zimbabwean farmers technically are not foreign investors. "They did not come with any money. They came only with their suitcases, tee-shirts, short knickers and coffee. They are not employees of the state, neither are they technical partners because the farms belong to them. The only definition we can find for them is refugees who have been given first-class rehabilitation scandalously more than they could ever dream of getting from England, Netherlands, Portugal or wherever they originally may have come from."

In 2004, no one could possibly doubt Bukola Saraki's sincerity of purpose when he headlined his agriculture revolution dream by flying in some white Zimbabwean farmers. The Kwara State governor had journeyed 4,000 kilometers to Zimbabwe to woo the farmers, chased off their farms by machete-wielding supporters of President Robert Mugabe.

As soon as he emerged governor in 2003, Bukola Saraki had launched a Back-To-Farm strategy. But he said he quickly had realised that the agricultural economy was composed of peasant farmers, most of whom were in their 60s and 70s with little exposure to modern technology and mechanization. Spearheading somewhat of an agricultural revolution to make Nigeria self-sufficient in food production, Saraki had automatically set off a campaign with a promise to wean the country's economy from wholesale dependence on oil. He had quarreled with the fact that despite abundant land, Nigeria was spending N400 billion($3 billion) a year on food imports that included rice, sugar, milk and smuggled chickens; all of which it could grow itself.

Mired at rake-and-hoe level, Nigeria's agriculture needed a radical push into a modern, commercial era. However, bewildered observers say that what Saraki offered to the Zimbabweans smacked of desperation. Hundreds of thousands of fertile land, seldom farmed before, along the upper reaches of the Niger river. It was almost twice as much as the Zimbabwean farmers had bargained for.

On a visit to Shonga Farms, for example, I saw that Allan Jack, a wiry maize and tobacco farmer, was given 2,500 acres of well-watered virgin bush. He is entitled to a five-year exemption from tax and import duties on farming equipment. Fourteen other farmers were each gifted with no less than 1,000 hectares where they now grow soybeans, maize, cassava, wheat, cow pea and sorghum. Riding in a van, what was seen was almost an endless stretch of lush green farmland.

Vigorously courting the Zimbabweans, the host state has provided more incentives, facilitated bank loans, invested over N400 million ($3 million) in roads, housing and electricity and guaranteed a 25 year lease on the land. There are boreholes scattered everywhere and the farms boast of luxury homes with Internet facilities and swimming pools. Dreamlike as the
landscape has become, the nagging question has remained : What are the Zimbabweans giving back for all the charity they are getting? In hushed tones, a few are even asking : who really own the farms?

Obtained documents show that a collaborative agricultural agreement between the government of Kwara State and the Commercial Farmers Union of Zimbabwe was made on 27th July 2004. If some commentators on the Shonga Farm project have bandied about words like "gift, fraud and deceit," these conclusions were technically drawn from the same controversial documents. For example, one screaming contradictions is that whilst the agreement says the farmers are coming to invest in the project, the same document states that the government shall provide each of the investors "the sum of US$250,000 and also provide a guarantee for a private sector loan in the sum of US$250,000 to each farmer on terms to be agreed upon by the parties and the financiers. The state loan shall be interest free but payable in equal installment in years three (3) to five (5) from the date of first disbursement."

In addition, each of the investors received from the government a bungalow of up to 2,500 square feet, complete with amenities such as a 200KVA generator, storage sheds as well as fencing of the farmland. Additionally, the host state undertook to apply to the National Investment Promotion Council on behalf of the farmers and in the name of their companies for "pioneer status" and to "take all reasonable measures to ensure the exemption of such companies from tax liabilities for the maximum permissible period and to make further application to the council and other relevant authority for any other exemption or financial advantage, including duty free concessions."

On their part, the Zimbabwean farmers are required under the agreement to incorporate companies at their own cost. The companies shall be wholly owned by the farmers or established in conjunction with interested investors and each company shall be the leaseholder of the agricultural lands granted by the government. The agreement also states that each agricultural company shall have an authorised share capital of N10 million ($80,000) and shall open an account with a minimum deposit of N1 million or its US dollar equivalent ($8,000) with a local bank.

It further spells out that upon the allotment and issuance of the shares of the companies to be registered, the farmers are to deposit with the government the share certificates of the companies as collateral for government loans and government guaranteed private sector loans until such loans have been fully discharged.

By its own account, the government, among other benefits, has given each of the investors a loan of N35 million ($275,000) and also guaranteed a private sector loan of another N35 million naira to each of them. To the 15 farmers, the sum of one billion and fifty million ($8.25 million) has been given in cash.

Reacting to the above, Oyedepo, who was once the Agric Commissioner and later Chief Whip of Kwara State House of Assembly between 1999 and 2003, is so galled by all the controversies surrounding the agreement with the Zimbabweans that he has written a 90-page book entitled "Time Bomb." Of particular concern to him are the liberal conditions for repayment, which he says are more of a favour than a loan to the farmers.

In Oyedepo's words, when a person is granted a loan by a financial institution, it must be with sufficient collateral security. "But for the loan of one billion and fifty million naira that the 15 Zimbabwean farmers have been granted by the Kwara state government, what security was offered? With regards to the clause talks of depositing with the government the share certificates of the farmers' companies, the questions we should be asking are : can a company which is not publicly quoted at the stock exchange sell shares to the public? Can such company not publicly quoted, transfer shares?"

The understanding that should necessarily flow from this explanation is that what shall be deposited as collateral to government for a loan of over one billion naira are mere certificates of incorporation of the fifteen companies. Oyedepo asked : "In the event of incapacity of the farmers to pay the loans, who buys ordinary papers which the certificates of incorporation must by then represent? And if the farms are confiscated or taken over by government for non-performance of the agreement, would government have the necessary wherewithal to manage them?"

In the same light, Oyedepo quarrelled with another clause that has to do with corporate social responsibility called Community Trust Fund (CTF). It states that the fund shall be operated by the government, local community leaders and the farmers, jointly for the creation of social facilities and infrastructure for the welfare of the peoples of the various communities where the farms are located. However, it added that the Trust Fund shall be financed by way of a special levy of 1% of gross turnover of the companies.

Describing the agreement as an insult to the natives, Oyedepo said, "The interpretation of this is that out of every one million naira gross turnover, ten thousand naira will go into the Community Trust Fund. So assuming a Zimbabwean company declared a gross turnover of 100 million ($3 million), only one hundred thousand ($800) goes to the CTF for the creation of social facilities and infrastructure for the welfare of the host communities."

No one has ever been left in doubt that the Tshonga Commercial Farming Project is a priority project in the eyes of the Bukola Saraki government. The Kwara State Government on 5th March 2006 requested the state legislature to guarantee the Zim farmers' in respect of a N650 million ($5 million) facility granted by the Nigerian Agricultural, Co-Operative and Rural Development Bank. The motion was moved by the majority and the debate was resolved the same day in the affirmative.

Indeed, with the incredible stretch of green crops, no visitor to Shonga can be in any doubt that a revolution is going on in Kwara state. The state commissioner for Finance and Economic Development, Alhaji Abdulfatai Ahmed has said he is confident the Shonga project holds the
future for commercial agriculture in Nigeria.

However, Oyedepo dismissed the revolution as a farce, essentially because the success has failed to address two cardinal objectives; namely technological transfer and domestic food production.

A visit to Shonga revealed the existence of "16th Farm," a training centre where the Zimbabwean farmers are supposed to teach local subsistence farmers the techniques of modern mass-scale farming. Perhaps two years is too early to assess the level of technology transfer, but it was not reassuring to discover that the Zimbabweans are compelled by the agreement only to teach the local farmers "from time to time, but no less than once in a month."

Oyedepo insists that the technology transfer process is a sham. "In Zimbabwe where these people are coming from, agriculture is the bedrock of the relationship between the white and black. Now ask yourself what has been the technology transfer since 1899 when the white came into contact with blacks. If they have transferred anything, why haven't the blacks taken up from where the whites stopped when Mugabe chased them off?"

Just as the locals have not benefited in technical know-how, they appear not to have benefited from any mass production of foods. According to the village Head of Faigi community, Alhaji Mohammed Ndarani, the white farmers may be making bountiful harvest but the price of food remains high, particularly because what the Zimbabweans produce cannot be found in the local markets. It was gathered that none of the local staples like rice and guinea corn is grown by the white farmers who prefer soya, sorghum, wheat, maize, cow pea and the likes for export market. One farmer, Irvine Reid, is even planning to grow flowers in the near future; precisely when the logistics for cargo transport to European capitals have been taken care of.

If Alhaji Ndarani is disappointed that the promise of abundant and cheap food is not being fulfilled, his anger knows no bound concerning what he sees as low utilization of local manpower. Though the agreement prescribes that the farmers should ensure that 90 percent of local manpower are indigenes of Kwara State, the Zimbabweans are hiding under the same clause, which states that local employment should be encouraged "provided the farmers shall not be precluded from employing other adequately qualified personnel." Some of the white farmers came to Nigeria with their black Zimbabwean farmhands. For example, Alan Jack imported a black Zimbabwean, Tapera Manyika, his wife Yeukai and three daughters Norest, Simpiwe and Nesta.

For the village Head of Faigi, the most contentious issue about the presence of Zimbabwean farmers is the land which they occupy. Governor Saraki has said that convincing the locals to accept the Zimbabweans was not difficult. However village head Ndarani said he was angry because his people are peasant farmers and the land is their only means of livelihood.

The same protest song could be heard in Dumagi district where the people said their farmlands were forcibly taken from them only for the government to pay them a compensation of N3,000 ($25) per farmer. Some of the farmers reportedly refused to accept the payment.

Reacting to the recent grumbles by the community, Akogun Oyedepo said the emotions were inevitable because the Kwara State Government signed the agreement with the Zimbabweans, apparently blindfolded. "Foreign investment is inflow of capital and expertise but this one has become outflow of scarce local resources. The Zimbabweans cannot be classified as foreign investors," he said.

Daily Sun