Economic Analysis of Financing and Sustainability of Irrigated Agriculture in the Lower Anambra and Lower Benue Irrigation Projects, Nigeria

Irrigated agriculture provides a very important part of national food security strategies as well as individuals’ and communities livelihoods at the local level. Yet the performance of many irrigation and drainage systems in Nigeria is generally below potential due to a variety of shortcomings. The monopolistic nature of the sector and its social sensitivity has fostered extensive government intervention that has not always been conducive to financial sustainability. Insufficient cost recovery and lack of direct linkages between revenue and expenditure, and between the client and the service agency are the root of the problems resulting to lower performance. Globally, there is a consensus for irrigation sector reform to increase water productivity, bothering on the institutional structure for irrigation management and the incentives for agencies and farmers. These reforms suppose that irrigation water is to be priced and that farmers will have to pay for the cost of water supply and related services. While such arrangements are important, some questions arise: would it work in situations where the physical infrastructure is dilapidated; user ability to pay is severely constrained by macro-economic factors; market concepts and institutions are absent or in their infancy; and capability in both management and regulation is limited.