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NIRSAL’S Contribution To The Buhari Agricultural Revolution



The story of Nigeria’s agriculture blends stagnation amid massive potential. However, the sector has been witnessing good progress in the last three years of the Buhari administration. Statistics show a significant increase in the production of local staples, a development that has led to a corresponding decline in the volume of food imports. Take rice for instance. Milled rice production has increased by about 60 percent, from 2.5 million metric tonnes (mt) in 2015, to 4 million mt in 2017. It is estimated that more than a billion dollars of private sector investments have gone into the production of rice, wheat, sugar, poultry, animal feed, fertilizers etc since 2015.

While there are several ongoing agricultural intervention programs that are helping to fuel this positive turnaround, the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) stands out in terms of depth, scope and institutional capacity. The corporation, which was established by the Central Bank of Nigeria (CBN) in 2013 to create a handshake between agriculture and finance has been a key part of the emerging positive outlook of the sector.

Under the leadership of the dynamic and visionary Managing Director, Aliyu Abatti Abdulhameed, the institution has been in the forefront of championing a new era of smart agriculture. NIRSAL’s agricultural solutions include creative agribusiness financing frameworks, a recourse to science and technology innovation in field agriculture management, and the promotion of agriculture as a viable business, not only for agricultural value chain players but the financial institutions too. A defining feature of its uniqueness is the business-driven capacity to sustainably fix long-standing problems that have over the decades hobbled growth of the sector.

Consider the strides NIRSAL has made in tackling inadequate financing. In the past three years – two of which have been largely dedicated to preparation and operational roll-out), NIRSAL has facilitated over N16.8 billion to the sector. Between January to date, the institution has helped large and smallholder players across the agriculture value chain to access over N9.7 billion to power their projects across the country.

Overall, NIRSAL since its inception, through the use of its Credit Risk Guarantee (CRG) made possible the injection of N77.27billion: Input supply N43.71bn, Primary Production N11.55bn, Processing N20.97bm and Mechanization N1.03bn.

Finance is a vital catalyst to agricultural growth. Over time budgetary provisions and half-measured financing interventions have proven to be grossly insufficient for creating the required impact. This leaves private sector financing as the best spur. However, commercial banks have traditionally considered the sector a high-risk investment destination for very valid reasons. It is estimated that lending to agriculture accounts for only 3.36% of total commercial bank lending. NIRSAL intends to change this by raising commercial bank agriculture lending portfolio to 7%.

This is the reason why NIRSAL’s ability to engage the financial community and convince them to notch up lending to agriculture is significant. A combination of financial leverage, deep institutional understanding of the sector by its management and strong corporate positioning as a private sector friendly corporation that is ready for business has been key to NIRSAL’s ability to make this inroad and build consensus among key finance leaders about the feasibility and profitability of investing in the agriculture sector.

For one, the corporation has done a good job of using its $300M risk sharing facility to share risks with commercial banks by providing credit guarantees for agricultural loans. Take lending to primary production for instance. NIRSAL provides up to 75 percent credit guarantee for loans that banks give to the value chain considered as the riskiest.

On the back of its risk sharing facility, NIRSAL signed groundbreaking agricultural finance schemes with leading commercial banks in the country. Some of the key agricultural financing partnerships include a N15billion (expandable to N50billion) and N10billion agricultural finance schemes with Stanbic IBTC and Union Bank respectively. From the aggregated sum, over N13.5billion has been drawn from the two projects so far, with the numbers increasing daily, to finance major projects including Fertilizer distribution, Organic Farms, Rice milling and other Grains processing. NIRSAL has also created a pipeline of viable projects to be financed from the two schemes totaling over N20billion.


NIRSAL’s world-class risk management structure also made it a prime candidate for the implementation of the CBN Anchor Borrower Program (ABP), a programme that was created to provide systematic input and output markets for smallholder farmers nationwide to boost agricultural production. Since its appointment as a Participating Financial Institution (PFI) in 2017, NIRSAL has aggregated and organized farmer groups and farmlands across twelve (12) States of Nigeria. In addition, NIRSAL has facilitated highly affordable, single-digit interest rate finance of about NGN5.7billion to over 33,000 farmers for the wet and dry seasons of 2017 and early 2018.


Aside fixing the financing challenge, NIRSAL’s comprehensive approach to agriculture has seen it contribute towards building technical capacity amongst farmers to ensure adherence to farming practices that guarantee better yield.This includes the provision of high-quality agricultural inputs and capacity building of farmers through training on Good Agricultural Practices (GAP). Since inception, NIRSAL has organized and sponsored technical capacity building workshops and programs for over 200,000 smallholder farmers. For the 2017/2018 farming season alone, over 15,000 have benefitted from its capacity training efforts across the country.

An innovative part of the NIRSAL structure that supports the provision of this technical capacity building practice is the Project Monitoring and Remediation Offices (PMRO) that it has in all the state capitals nationwide.The PMROs, which are more like the agriculture extension services, are staffed by trained professionals and supported by experienced consultants. This support is helping smallholder farmers experience higher yield and incomes from their farm holdings.

Although NIRSAL has only been in active operation for just three years, its innovative and impactful interventions are earning it a name in the nation’s agriculture sector. The initial work done by its management has helped to position NIRSAL as the savvy ambassador of agriculture to the financial industry – local and abroad; a partner of choice to international development finance institutions in their efforts to support government agriculture plans in the country and indeed a leader in the continental drive to green Africa.

The corporation deserves not only the cooperation but also the support of all stakeholders. It is reassuring to know that Mr. Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), owners of NIRSAL has been providing strong support to the Abdulhameed led management.

NIRSAL has embraced technology and innovation as key planks of a strategy for driving agriculture and agribusiness, a focus that is in line with global best practices in the sector. The series of schemes and programs that it is implementing are helping to reshape agriculture and make agribusiness more attractive to the private sector. Its business-driven solutions, which target large players in various agricultural value chains as well as smallholder farmers, have helped thousands of agropreneurs to access finance, expand their production and increase productivity and incomes. It is indeed a tool that is likely to play a central role in the future of agriculture in Nigeria.

*Joseph is a public policy analyst





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