NIGERIA – The government of Brazil has set aside US$100 million to boost Nigeria’s agribusiness sector which is part of US$1 billion Brazil plans to channel into the sector in the next three years in bid to promote agribusiness financing in the country.
This was disclosed by Brazil’s Ambassador to Nigeria, Mr. Francisco Carlos Soares Luz, during a symposium on agribusiness finance, with the theme: “Making Agribusiness Bankable: Lenders and Investors Expectations,” organised by the Financial Services Group (FSG) of the Lagos Chamber of Commerce and Industry (LCCI).
According to Luz, the fund is meant to enable Nigerian farmers to access agro machineries from Brazil and assist in cassava and sugar cane production.
“These are more than food products. We generate 8000 megawatts of electricity and ethanol for fuel from sugar cane in Brazil,” he added.
The Nigerian agriculture sector, according to President of LCCI, Mr. Babatunde Paul Ruwase, attracted US$169.37 million foreign direct investment between April and June 2019.
He said: “Research conducted locally and internationally confirmed a positive correlation between agriculture finance and agriculture development.”
“Nigeria need to scale up investments in improving agriculture yield and integrating the value chain over the next decade to effectively capture a significant share of the market,” he added.
In contribution, the Managing Director of NIRSAL Plc, Mr Aliyu Abdulhameed, said NIRSAL was established to de-risk agriculture lending in the country and encourage the flow of finance to the sector.
He said Nigeria was suitable for agribusiness finance due to its 84 million hectares of arable land, favourable government policies and rapid growing population.
He also said the Nigerian agriculture was in need of finance capital, technology capital, equipment capital and human capital to translate its potentials to reality.
Recently NIRSAL announced that its initiative had created about 400,000 jobs in different segments of the agricultural value chain.
These jobs were made possible via the provision of N101 billion by banks as the money was utilised in catering for 693 agricultural projects.
CBN lending to farmers
The apex bank of Nigeria is also in the for front of supporting agriculture sector financing.
According to its third quarter financial report, Central Bank of Nigeria released a total of N610.4bn (US$1.68bn) for 593 projects to the banks for farmers under the Commercial Agricultural Credit Scheme.
The total amount repaid stood at N368bn at end-June 2019, compared with N338.4bn (US$0.933bn).
The apex bank also said a total of N1.21bn (US$3.3m) loan was guaranteed to 9,752 farmers under the Agricultural Credit Guarantee Scheme during the period under review.
It stated that this represented an increase of 41.7 per cent above the level in the preceding quarter, but was 14.6 per cent below the level in the corresponding quarter of 2018.
A subsector analysis showed that food crops received the largest share of 49.0 per cent guaranteed to 5,436 beneficiaries; mixed crops got 18.3 per cent guaranteed to 2,472 beneficiaries; while livestock had 14.4 per cent guaranteed to 690 beneficiaries.
Cash crops, fisheries and ‘others’ got 8.8 per cent, 6.9 per cent and 2.6 per cent, guaranteed to 629, 321 and 204 beneficiaries, respectively.