In November last year, Nigeria signed a Memorandum of Understanding (MoU) with the United States of America (USA) agricultural machinery firm John Deere to deliver 2,000 tractors annually to boost mechanised farming and food security.
The agreement was part of the federal government’s plan to produce and supply 10,000 tractors to farmers for five years in tranches of 2,000 units annually. The goal is to modernise agriculture, create jobs, and ensure food security in the country.
The agreement also covers the establishment of tractor assembly plants and 52 service centres nationwide, the supply of spare parts, and training for operators and mechanics.
Furthermore, the federal government signed another five-year agreement with Belarus through AFTRADE DMCC to establish tractor assembly plants and supply 9,022 agricultural implements annually in addition to the 2,000 tractors.
The minister of agriculture and food security, Abubakar Kyari, explains that the partnership is designed to make tractors affordable for farmers through low-interest financing facilitated by the Bank of Agriculture (BoA).
Vice President Kashim Shettima and John Deere officials signed the MoU at the World Food Prize Foundation event in Iowa, USA, in 2023. Shettima encouraged Nigerian farmers to form cooperatives to access the tractors, which are repayable in instalments. Then, all these appeared laudable and encouraging. But like others before it, the initiative may have run into hitches.
Sadly, one year after these agreements were signed, the first batch of 2,000 tractors under the arrangement has yet to be delivered.
After this obvious contract breach by the company, the best the agriculture minister could do when he met with the companies on the matter was express displeasure over John Deere and Tata Group’s delay in delivering the tractors. That was in July this year.
Kyari said, “The President is aware of the meeting today and is waiting for the outcome and to see how far we have gone. I expected to hear that the tractors are on the way and will arrive in Nigeria soon.
“There should be a time limit to give ourselves the desired achievement to this business, we have to wrap it up and step up as well to ease difficulty because we are expected to use them for this dry season,” he lamented.
As a newspaper, we are appalled by the government’s handling and reaction to the two companies’ obvious unwillingness to deliver on the terms of the MoUs when the government has already paid 30 per cent of the contract sum upfront.
We are also disturbed that the government has failed to disclose the entire contract amount to date. The mere disclosure of the 30 per cent down payment is suspicious and runs counter to the spirit of openness and accountable leadership.
Nigerians want to know the actual cost of the MoU and how much the 30 per cent payment represents in naira and kobo. This should be done without further delay.
This current controversial agreement is a stark reminder of Nigeria’s penchant for signing MoUs that have never been implemented, resulting in huge financial losses, litigations, and a tarnished global reputation.
The cases of P&IDs and the recent seizure of a presidential jet and a Nigerian house in a foreign country by a Chinese firm which had a questionable partnership with a state government are still fresh in our minds.
The current agriculture tractor negotiation and past incidents demonstrate the dangers of rushing into agreements without due diligence. We insist that it is wrong for the government to fail to disclose the contract sum and to announce the 30 per cent contract payment. It is not a sign of accountability and transparency in official conduct.
We therefore urge the minister of agriculture and food security to act promptly and terminate the MoU because the companies failed to do what was necessary after the minister’s meeting with them last July.
This move will prevent Nigeria from being trapped in a web of litigation and blackmail by spurious companies with no known business addresses or records of past performance.
To avoid similar pitfalls in the future, we call for due diligence to verify companies’ credibility and track record before signing such agreements.
The government should always publicly disclose contract sums and terms to ensure transparency and accountability. Clear timelines for project implementation should also be established to prevent delays and excuses.
When there are delays or failures, as in the instant case, the contract or MoU should be immediately terminated. Adopting these measures can help Nigeria avoid the pitfalls of poorly negotiated agreements.
We recall that John Deere farm equipment is notorious for being impossible to service or repair by owners or third parties; only John Deere has access to the computer code required for this and to accept non-John-Deere replacement parts. Remote locking by the manufacturer may also be possible. This effectively makes the equipment unusable without the continued involvement of John Deere.
Did the minister and his team factor in this dubious condition before signing the MoU?
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