1 Background of contributions to the ATASP-1 Program Development Objectives

ATASP-1 was formulated into three complementary and mutually reinforcing program components as follows: (i) Infrastructure Development; (ii) Commodity Value Chain Development; and (iii) Program Management.

The Program will provide improved production, processing and marketing infrastructure necessary for selected commodity value chains. ATASP-1 will rehabilitate water conveyance structures necessary for irrigation; train value chain actors in technical and managerial skills; provide extension services to producers and processors; facilitate and improve key accesses through peri-urban/urban cities passing through markets. It will rehabilitate and construct schools, health centers; and provide sanitation and potable water facilities in the Processing Zones (PZs). The Program will enhance employment of youth and women by providing access to improved productive resources (including credit) and practical skills and increase the number of SMEs and persons engaged in the agriculture value chain.

Objectives Its specific objective is to increase, on a sustainable basis, the income of smallholder farmers and rural entrepreneurs that are engaged in the production, processing, storage and marketing of the selected commodity value chains. The direct beneficiaries are the 45,300 economically active smallholders living in the rural areas who are already participating in commercial agriculture. This number is expected to increase significantly when other economically active value chain entrepreneurs enlist in the Program. The indirect beneficiaries include existing or potential small, medium and large-scale entrepreneurs and business associations who provide services to rural households. Among the target group, women and youth play a major role in crop and animal production, processing, small enterprises operation and marketing. They will be specifically targeted for Program activities and benefits.

Rationale The Agricultural Transformation Agenda (ATA) has a great potential in enhancing the role of agriculture as an engine of inclusive growth leading to rural employment, wealth creation, and diversification of the economy. A major policy accomplishment in the sector is the liberation of seed and fertilizer supply, which had hitherto been controlled by the Federal Government, undermined the private sector and did not deliver the inputs to genuine farmers. Since September 2011, fertilizers and seeds are being sold by companies directly to farmers. Lending commitments from commercial banks has been leveraged using guarantees issued by the Ministry of Finance to finance the seed and fertilizer supply. In order to provide a legal framework for the establishment and perpetuity of Staple Crop Processing Zones, and transform the Nigerian agriculture sector with significant multiplier effects on the entire economy, an Act to provide a legal framework for the establishment of Staple Crop Processing Zones (SCPZ) was drafted and to be presented to the National Assembly for adoption.

An assessment of past investments in the agriculture sector showed that the alignment of the country's strategic orientation with development objectives and strategy of the Bank Group were satisfactory. Current performance of the Bank's portfolio in Nigeria is satisfactory with a rating