The Bank of Agriculture has secured a $1 billion intervention fund through a partnership with the African Export-Import Bank to support smallholder farmers and strengthen Nigeria’s agricultural value chain. According to the Bank of Agriculture, the funding is a key step toward improving food security, enhancing livelihoods, and driving inclusive economic growth across the country.
This initiative follows the recent approval by President Bola Tinubu for the creation of the National Food Security Fund. According to the Bank of Agriculture, the fund is designed to address key challenges in the agriculture sector, particularly the limited access to finance, modern farming equipment, and structured markets that smallholder farmers face. Smallholder farmers, who contribute more than 90 percent of Nigeria’s agricultural output, are seen as critical to the success of this effort.
The new fund is a revolving matching facility developed in collaboration with state governments. Ayo Sotinrin, Managing Director and CEO of the Bank of Agriculture, explained that the fund aims to provide affordable credit for agricultural inputs, promote mechanized farming, and improve market access. He said the goal is to help smallholder farmers overcome the financial barriers that have long limited their productivity and profitability.
According to Kanayo Awani, Executive Vice President for Intra-Africa Trade and Export Development at Afreximbank, smallholder farmers are central to the agricultural value chain. She noted that their support will contribute significantly to Nigeria’s growth and food security objectives. Awani said the collaboration between the Bank of Agriculture and Afreximbank represents a joint commitment to improving Nigeria’s agricultural sector and promoting economic development.
To make the fund more effective, the partnership includes two key components: a guarantee framework and a currency swap arrangement. Sotinrin explained that the guarantee framework will allow Afreximbank to back loans issued by the Bank of Agriculture, reducing credit risks and making it easier for farmers to access funds. According to Awani, the currency swap arrangement will help shield the fund from exchange rate fluctuations by converting dollar-based funding into local currency. This will make it easier for the Bank of Agriculture to lend directly to farmers.
The National Smallholder Farmers Fund is expected to have a major impact on Nigeria’s agricultural sector, according to both the Bank of Agriculture and Afreximbank. They believe the initiative will help address structural challenges in farming and open new opportunities for growth and sustainability in rural communities.
1 comment
This is a good development but unfortunately the awareness and publicity ought to be very high than this.
I’m delighted to work with all agencies to mobilise grassroot Smallholder farmers and deliver the objectives of the program.