The Central Bank of Nigeria (CBN) has approved a takeoff grant of N75 billion to boost agriculture business across the country, an official has said.
Mr Jude Uzonwanne, CBN's Head, Project Implementation of Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), disclosed this in an interview with on Monday in Abuja.
Uzonwanne said the grant was approved by CBN to assist farmers to de-risk agricultural business and damages arising from climate change.
He said that NIRSAL was a public/private initiative designed by the apex bank and the Federal Ministry of Agriculture in 2011 to disburse such grants to financial institutions for easy access by farmers nationwide.
“The Federal Ministry of Agriculture is also helping drive the re-construction of value change and where we can, we support that because our role is more all less to act as the lender to lenders.
``So in order for us to do that comfortably, we have provide technical assistance to ensure that people can get the goods to markets, that buyers of goods are organised, so we don’t want farmers producing 6 million tonnes of tomatoes and there is no buyer for it.
“If we can work with tomatoes processors to create paste factories or with rice millers to create rice mills, that becomes part of our responsibility in joint partnership with the Federal Ministry of Agriculture.
“We are trying to move away from an era in which people saw government assistance to agriculture as their piece of the national cake and they didn't pay back loans, we know people who still owe Federal Government money, we want to move away from that.''
According to him, CBN will release the fund to financial institutions for onward disbursement as loans to farmers’ cooperatives, at low interest rate.
He said that N45 billion had been earmarked from the N75 billion as loans to the farmers, while the balance would be used to train the farmers and insure them.
“The N45 billion becomes critical to the lenders, the remaining of the N75 billion will now be spent on technical training of the farmers to know when to plant, type of fertiliser to use, because not all fertilisers are perfect for all crops and soil types.
“There is an allocation from the fund to support insurance companies to produce products to address the needs of farmers, and we are also trying to work with other partners to get more capital to support the growth of farmers.”
Uzonwanne said the fundamental goal of the initiative was to create millions of jobs with wealth out of agriculture in the next 10 years, which at the end would create societal stability.
He said that inadequate extension workers and private agro dealers in the country was a challenge, as such services were not appropriately deployed.
“We have spoken with some state governments to help improve the extension workers as well as to bring in more private agro dealers and to ensure that when farmers need fertilizers they don’t have to travel more than two kilometers.”