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BOI, NIRSAL Partner To Make Agric Attractive To Investors

audu-ogbeh
Posted: Sep 30, 2016 at 3:57 pm   /   by   /   comments (0)

Seyi Taiwo-Oguntuase

Lagos

 

In order to make agriculture an attractive business to investors, Bank of Industry (BoI) and Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) have partnered to increase finance to the sector by deploying risk sharing instruments that lower the risks of lending to the sector.

Addressing newsmen in Lagos at the signing of Memorandum of Understanding (MoU) between the two agencies, Acting Managing Director and Chief Executive Officer of BoI, Mr. Waheed Olagunju, said agricultural producers would have unprecedented access to loans at low prices as the risk-sharing collaboration seeks to lower interest rates.

He said the MoU embodies the totality of the terms, conditions and stipulations as agreed by the two parties and shall be amenable to review at the instance of either party at such time as shall be agreed by the parties.

“In the arrangement, NIRSAL will provide Credit Risk Guarantee to enhance BoI’s confidence to lend along identified value chain which shall traverse from production through processing to marketing.

“Suffice to mention that financing is just one of the integral ingredients for the sustainable rejuvenation of the agricultural sector, but it is a fundamental one.  I therefore wish to affirm the commitment of the Bank of Industry to collaborate with all relevant agencies and stakeholders towards ensuring that Nigeria’s agricultural sector takes its rightful place in the scheme of things.

He said as both agencies execute the agreements, the two institutions are expected to bring their resources and expertise to bear on this initiative to ensure that the national objective is achieved within a reasonable time.”

He noted that with the dwindling crude oil revenue, the federal government has decided to diversify the economy from dependence on the oil sector to the agriculture sector, as key revenue earner and major contributor to the GDP thorough commodity based value chain approach.

“Against this backdrop, the government has initiated efforts aimed at addressing the financing needs of the Agric and Agro allied sectors with clear directives for the agencies to create a synergy towards realizing the government’s goals of making agriculture a catalyst for job creation, poverty alleviation and income generation as part of the inclusive growth strategies,” he said.

Managing Director of the NIRSAL, Mr. Aliyu Abdulhameed, said the signing of MoU was a conclusion of several months of intense engagement between NIRSAL and BoI with focus on defining a collaborative framework to increase financing to the agriculture sector by leveraging the strengths of the organizations.

“For agriculture to work and contribute its quota to economic growth, guarantee decent incomes for farmers has to be properly linked to industry. Unfortunately for us, the linkages between agriculture and industry are weak and this reduces the ability of both sectors to contribute to economic growth.

Explaining the role of his agency in the collaboration with BoI, Abdulhameed said it would provide the Agricultural Promotion Policy (The Green Alternative) of the federal government with practical solutions for activating the potential of agriculture to ignite pro-poor growth, job creation and food security by facilitating private sector finance into agricultural production.

“The thrust of our efforts will be to package, de-risk and enable the flow of affordable financing of agricultural projects within the priority crop and livestock subsectors under the APP.

“This we will do by bridging the competitiveness gap with the rest of the world in agriculture and agro-industry. It is this high level of competitiveness that will attract sustainable commercial and private finance to Nigeria’s agricultural economy.