to commercialize agriculture-based industrial products. It took an equity position in the company or a royalty on sales, and it had an agreed exit strategy after eight years. Unfortunately, the AARC was disbanded after seven years when the USDA Inspector General’s Office uncovered serious deficiencies in its management and oversight.1 Despite this outcome, a similar mechanism with a narrower mandate, perhaps run by a nongovernmental organization (NGO) that could be held to account, might prove effective in funneling venture capital funds to small companies that would directly further the aims of the program. An essential ingredient of any such program is effective evaluation and approval of the product and associated service for quality and compliance with published standards as well as the oversight that was ineffective in the case of AARC. Like many venture capital firms, the proposed one could also offer technical assistance with logistics and help in negotiating the legal requirements.
Alternatively, a large major company in the solar energy or pure water business could be enticed to develop a system for sales in Nigeria and offer franchises to entrepreneurs to sell and service units in different parts of the country, providing credit and training as required.
In the previous chapters and in the following recommendations, reference is frequently made to the “Nigerian government.” However, in Nigeria, as in most countries, government exists at several levels—generically, federal, state, and local. The present distribution of power frequently allows the state and local levels of government to undertake actions such as those proposed here. Moreover, they may have easy accessibility to the poor rural populace and community-based projects that are involved. Here we do not try to determine which level of the Nigerian government system is most appropriate for the indicated action. The term government should therefore be understood to apply to all three, with the hope that the recommendation will be considered by the one that is most interested and effective.
Recommendation: The Nigerian government should develop a system of incentives to encourage private companies to sell and service solar electric systems for the home to rural residents who are not connected to the national grid. The Nigerian government also should develop a system of incentives to encourage private companies to sell and service water purification systems to communities that are not served by municipal or national water supplies, or to produce household filtering systems for safe drinking water.
U.S. Department of Agriculture, “Assessment of the Alternative Agricultural Research and Commercialization Corporation—Management Lacking over High Risk Investments,” 1999, http://www.usda.gov/oig/webdocs/37099-1-FM.pdf.