[size=14pt]CBN, AGRA sign MoU to pump N457bn into agriculture sector[/size]

TUESDAY, 10 AUGUST 2010 01:17 ISAAC AREGBESOLA


[size=14pt]Efforts to revitalise the agriculture sector received a boost on Monday as the Central Bank of Nigeria (CBN) and the Alliance for a Green Revolution in Africa signed a Memorandum of Understanding (MoU) to develop a new innovative mechanism for financing the nation’s agricultural sector.

The initiative, which is targeted at the needs of farmers, especially small-holder farmers, agro-processors, agribusinesses and input suppliers in the agricultural value chain would lead to the deployment of $500 million to leverage about $3 billion from commercial banks in the country into agriculture.[/size] With this development, AGRA, CBN and other stakeholders, including the United Nations Industrial Development Office (UNIDO), will also work together on developing innovative insurance products that are affordable to farmers, to complement the support to be provided for banks and other financial institutions, in order to further reduce the risk of lending.

Sanusi Lamido Sanusi, governor of the CBN after the signing ceremony, noted that during the initial design of the new Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), the CBN and AGRA would work with key stakeholders in Nigeria to develop an innovative financing mechanism aimed at providing farmers with affordable financial products, while reducing the risk of loans to farmers under other financing programmes offered by the financial institutions.

Sanusi said: [size=14pt]“The CBN has embarked on major reforms of the banking sector to bring it in line with our priorities for sustainable economic growth. Agriculture is one of the key sectors. Financing agriculture is central to Nigeria’s economic future.[/size] We know that farmers and agribusinesses need access to credit, coupled with proper financial literacy, market access, and insurance. They need the total package.”

The governor noted that “when the initiative is fully designed the apex bank would launch NIRSAL to deploy $500 million to leverage about $3 billion from commercial banks in the country into agriculture.

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