From Enyeribe Ejiogu (Lagos), Uche Usim (Abuja) and Priscilla Ediare (Ado-Ekiti)

The intervention by the Central Bank of Nigeria, CBN, in the agricultural value chain, under the Anchor Borrowers Programme (ABP) has continued to yield dividends for the country, though loan repayment by beneficiaries is under threat because of the worsening security challenges. One other aspect of the apex bank’s intervention is the inclusion of tertiary institutions with large acreages of arable land for commercial farming.

Responding to the great need to boost local production of staple foods and wean the country from over dependence on imported foodstuff that could be grown by Nigerian farmers, the apex bank created Anchor Borrowers Programmes as a special intervention, to channel investment funds under a tightly controlled and monitored arrangement to help organised farmers, who for long had been ignored by the commercial banks that were unwilling to invest in agriculture.

Barely months after President Muhammadu Buhari took up the reins of governance, he, on November 17, 2015, travelled to Birnin-Kebbi, the capital of Kebbi State, accompanied by the CBN Governor, Mr Godwin Emefiele, for the formal launch of the Anchor Borrowers Programme, and thereby kicked off the national process to create a rice cultivation revolution in the country. 

Present on the occasion were the Kebbi State governor, Atiku Bagudu, officials of the Nigerian Agricultural Insurance Corporation (NAIC) and other stakeholders in the agriculture sector. Not long after, Ebonyi State, long known for local rice cultivation joined the bandwagon. Similarly, corporate farmers like the Coscharis Group set up a huge rice farms in Anambra State.

The intervention was birthed after consultations with stakeholders comprising the Federal Ministry of Agriculture and Rural Development, state governors, millers of agricultural produce, and smallholder farmers to boost agricultural production and non-oil exports in the face of unreliable crude oil prices and its concomitant effect on the revenue profile of Nigeria. Another goal was to create a new generation of farmers/entrepreneurs, create employment, progressively make Nigeria self-sufficient in food production and ultimately hedge against food insecurity.

To remove the bottleneck posed commercial banks reluctance to extend credit to the agricultural sector, the CBN established alternative financing schemes such as the ABP and Commercial Agriculture Credit Scheme (CACS) to provide finance for the cultivation of crops locally. Farmers, especially those in far-flung villages, access the ABP loans through their cooperative societies and primary mortgage institutions at five per cent interest rate per annum.

Due to the COVID-19 pandemic, the CBN has restructured the loans and extended the moratorium window where necessary to lighten the burden of farmers and other beneficiaries of the facilities.

Before the ABP, Nigeria spent N1 billion daily from its lean external reserves to import rice.

Aside from eroding the reserves, the reckless imports of rice and other foods worsened the country’s unemployment nightmare by denying Nigerians jobs and other derivatives in the agricultural value chain. On the flipside, the economies of Thailand, China and India boomed, a development President Buhari said was totally unacceptable.

The programme thrust of the ABP is provision of farm inputs in kind and cash (for farm labour) to smallholder farmers (SHFs) to boost production of food commodities, stabilize inputs supply to agroprocessors and address the country’s negative balance of payments on food. The CBN guideline for the ABP shows that the targeted commodities of comparative advantage to Nigeria include, but not limited to: cereals (rice, maize, wheat), cotton, roots and tubers (cassava, potatoes, yam, ginger etc); sugarcane; tree crops (oil palm, cocoa, rubber etc; legumes soybean, sesame seed, cowpea etc; tomato; livestock like fish, poultry, ruminants, etc and any other commodity that will be introduced by the apex bank from time to time.

As Emefiele disclosed at a forum, over N791 billion has been disbursed to 3.7 million farmers who have cultivated over 4.6 million hectares of farmland under the ABP as at August. In the retail agriculture sector, N631,408,779,670 has been released as at May 28, through 23 primary financial institutions (PFIs) to all the 36 states and the FCT to cultivate 21 commodities. For instance, Unity Bank disbursed N275,294,461,734.9; KeyStone- N114,286,258,406.4; Bank of Agriculture- N106,276,823,728; NMFB– N32,223,169,674; NIRSAL– N38,885,123,890.48 and 15 other PFIs- N64,442,942,237.26.

Similarly, N440 billion was disbursed to 711,706 beneficiaries under the Agribusiness/Small and Medium Enterprises Investment Scheme (AGSMEIS) and the Targeted Credit Facility (TCF) being run by the NIRSAL Microfinance Bank.

Some other CBN intervention schemes include Non-Interest Guidelines for Accelerated Agriculture Development Scheme (AADS); Non-Interest Guidelines for Intervention in Textile Sector; Guidelines for the operation of the Agribusiness, Small and Medium Enterprise Investment Scheme (AGSMEIS) for Non-Interest Financial Institutions; Non-interest Guidelines for Non-oil Export Stimulation Facility; Non-interest Guidelines for Anchor Borrowers’ Programme; Non-interest Guidelines for Real Sector Support Facility Revised Guidelines; Non-interest Guidelines for the operation of the Credit Support for the Healthcare Sector, Modalities for the implementation of the Creative Industry Financing Initiative (Non-interest version).

Just last week, the CBN added the Tertiary Institutions Entrepreneurship Scheme (TIES) to its basket of intervention programmes, saying that it aims at harnessing the potential of graduate entrepreneurs (gradpreneurs) in the country and and tackling unemployment and underemployment.

The CBN said that the new framework to be operated in partnership with Nigerian polytechnics and universities, would provide an innovative financing model for job creation, enhance the entrepreneurial ecosystem and support economic growth and development.

The apex bank added that the scheme was designed to create a paradigm shift among undergraduates and graduates from the pursuit of white-collar jobs to a culture of entrepreneurship development for economic development and job creation.

The CBN said the focal targets under the Scheme include 25,000 ‘gradpreneur-led innovative start-ups and businesses annually with access to finance under the scheme; 75,000 sustainable jobs created by gradpreneur-led businesses financed under the scheme annually, and 50 per cent per annum of female-gradpreneurs financed as a percentage of total projects financed under the scheme.

Other targets include 40 per cent per annum of agropreneurs financed as a percentage of total projects financed under the scheme; 20 perncent per annum of creative entrepreneurs financed as a percentage of total projects financed under the scheme. Techpreneurs financed as a percentage of total projects financed under the scheme, and 20 per cent per annum of other gradpreneurs financed as a percentage of total projects financed under the scheme.

Those higher institutions classified in the first place would be granted N150 million; second place N120 million; third place N100 million; fourth place N80 million, and fifth place N50 million.

The CBN said the grants would cover agribusiness, information technology, creative industry, and science and technology, innovative start-ups and existing businesses owned by graduates of Nigerian polytechnics and universities in agribusiness – production, processing, storage and logistics; IT application/software development, business process outsourcing, robotics, data management; and entertainment.

In this regard, Southern Atlantic Polytechnic, Uyo, has acquired several hectares of land across Akwa Ibom State to serve the needs of its Agricultural Technology programme, which is a major course in the educational institution.

Recently, it launched the first products harvested and processed from it farms. These include garri, palm oil and crayfish. Another unit in the polytechnic makes shoes for military and paramilitary agencies.

Founder of the institution and National President of the Association of Private Polytechnics Founders and Rectors, Pastor Bassey James, in a phone chat with Sunday Sun explained that the polytechnic, like a few other educational institutions, responded to the clarion call to organisations to engage in commercial agriculture as way of contributing to the country’s quest to attain food security as a national strategic goal. “We are training our students on various aspects of agribusiness, food processing, packaging, marketing and other important aspects of agro-development. Rapid development of agribusiness, particularly production and processing of market-ready food products, is what we need to be able to feed the nation and at the same time conserve foreign exchange now being spent on importation foods that can and should be grown here in the country and create employment,” James said, boasting that Akwa Ibom has the the most fertile land in Africa and one the best in the world, and asserting that “everything grows here.”

Not too long ago, the polytechnic keyed into the special intervention programme of the Central Bank of Nigeria, CBN, for tertiary institutions that have land for agriculture or wished to set up agricultural projects. James revealed that the polytechnic evaluated the initiative and then applied to the apex bank.

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His words: “We were elated when we got a letter from the CBN inviting our polytechnic for the poultry farm programme. We have completed the process with our bank. We have also have invited our South African partners in preparation for the project. The required are on the way. In fact, our partners are happy and it is our expectation that CBN will come through for us.

“We are immensely grateful President Buhari and the CBN governor, Godwin Emefiele, for initiating the tertiary institutions agricultural programme. I dare say that the CBN started off what can be called an agricultural revolution in Nigeria. We are exploring the waters for the crayfish and fish farming. Our palm plantation and cassava farm are all geared towards enabling us create wealth beyond oil.

“Our major has been that no financial institution was ready to support us. We had previously approached the Bank of Industry (BOI) for assistance in acquiring necessary processing equipment just as we also sought support from the Niger Delta Development Commission (NDDC) and the Bank of Agriculture. Those efforts yielded no success. The value of our fixed assets is more than enough to guarantee for the loans we need. Notwithstanding all this the banks were reluctant to support us. That is why I am elated over the new CBN intervention programme. I urge all Nigerians to support this laudable initiative of the CBN, to develop and deepen agriculture. With patriotic commitment we can create employment in agro-allied business just like USA and China, which are the two biggest economies and world powers. Together we can build our country’s agricultural base.”

Another institution that could key into the programme is Afe Babalola University, Ado Ekiti, ABUAD, but it is not certain whether it is a beneficiary. However, what is widely known is that it has a robust commercial farming venture. Associate Professor and Acting Head of Department, Agricultural Science, ABUAD, Dr. Bamigboye Funmilayo, in a WhatsApp chat said: “ABUAD Farm is a commercial farm that is industrialised. This is because majority of the farm produce/products are processed and value added into other finished products. For instance, mangoes from the plantation are processed into juice as well as dried exportable chips at the mango factory in ABUAD farm. Also, Moringa oleifera is turned out as 10 different products from the moringa factory and so.

“The Agricultural Science students of the university engage in hands-on practical activities at the ABUAD farm. The university is not engaged in the rice cultivation under the CBN Anchor Borrowers Programme

In addition to the foregoing subsectors of the economy, the CBN created special intervention programmes for practitioners or entrepreneurs in other areas such as artworks, publishing, culinary/event management, fashion, photography, beauty/cosmetics; and science and technology (medical innovation, robotics, ticketing systems, traffic systems, renewable energy as well as waste management).

Over 11 million jobs created so far

Experts reckon that the aforementioned interventions were responsible for the quick exit of the predicted 2020 recession induced by the COVID-19 lockdown, global supply chain disruptions and crashed crude oil prices.

According to Professor Uche Uwaleke, Nigeria’s first professor of the capital market, the overall objective of these interventions is to promote financial inclusion in the country, tackle unemployment, insecurity and other social challenges.

Loan repayment as at June this year stands at N177,641,040,572 and total outstanding loan is N453,767,739,097. The amount of farmers funded projects are 3,107,949, while the number of hectares are 3,801,696. The loan repayment blueprint is that at harvest, the SHF supplies his/her produce to the agro-processor- the anchor who pays the cash equivalent to the farmer’s account.

In other words, loans granted to the SHFs are to be repaid with the harvested produce that will be mandatorily delivered to the anchor at designated collection centres in line with the provisions of the agreement signed. The product to be delivered must cover the loan principal and interest.

With that, the farmers are not burdened with finding markets to sell their commodities as offtakers (anchor) are part of the ABP chain.

Stakeholders in the scheme have severally stated that the sustainability of the programme depends on the repayment of loans accessed by farmers. Unfortunately, a lot of farmers who accessed CBN intervention facilities are currently languishing in various Internally Displaced Persons (IDP) camps, especially in the north.

These farmers fled their agrarian communities due to relentless attacks by marauding herders and terrorists and have not cultivated the soil for a long time because bombs have been planted where their crops ought to be. The development is making loan repayment difficult and the implication is that without the farmers being able to repay the loans, the ABP may be asphyxiated and ultimately leave the fragile economy in jeopardy.

A maize farmer in Sokoto, Yero Abdullahi, has appealed to President Muhammadu Buhari to deal with the ravaging terrorism, since the insurance does not cover terrorism or farmers-herders’ clashes.

“I’m supposed to be on my farm but I’m in Abuja doing “mai ruwa” (water vendor).  I didn’t plant this year because of bandits. I collected loans through a cooperative society in Sokoto and I can’t pay until I cultivate and sell my produce to them to cover the money. This is troubling. Farmers need help,” he lamented.

His colleague in Yobe, Bako John also appealed to the government to end the security crisis so farmers can return to their farms and produce food for the nation.

“We are farmers. We have been trained. We are strong and we can feed the nation. But insecurity won’t let us. I fled Fika in Yobe to Abuja to become a shoe cleaner. I’m not happy. I’m a farmer and it gives me more money. But I can’t farm because of Boko Haram. I can’t repay my loan. I’m very sad”, he groaned.

Insecurity, which led to reduced food production, has forced the available commodities to become very expensive, outside the reach of the masses. This is worsened by low foreign reserves and the government’s decision to stop importing about 43 items that can be produced locally. With local farmers unable to meet the food gap, food prices may not crash anytime soon.

The CBN Governor, Mr Godwin Emefiele, has also added his voice to the anti-terrorism crusade by advising all restive youths to drop their arms and embrace the ABP, as it is capable of solving the food insufficiency and unemployment nightmares, which are two main factors fuelling insecurity.

Nigerians are hoping that the military, leveraging on the new Tucano fighter jets, will crush insurgency and return the economy to progress path.

However, to insulate farmers from unforeseen risks, the CBN enlisted the Nigerian Agricultural Insurance Corporation (NAIC), the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) and other private insurance companies to provide some cover for them, especially against natural disasters like flooding, earthquakes and fire.

NIRSAL is an initiative of the CBN, the Bankers Committee (BC) and the Federal Ministry of Agriculture & Rural Development (FMA&RD) created to essentially administer a risk sharing fund designed to identify, redefine, measure, re-price and evolve strategies to de-risk and catalyze lending to the Nigerian agriculture value chain. NIRSAL is to encourage banks to improve direct lending to the agricultural sector while it stands as a guarantor, as the agriculture sector is still considered highly risky.

Also, the NAIC, established in 1987, is a specialized agricultural insurance company meant to provide insurance cover to farmers due to the unwillingness of conventional insurers to accept agricultural risks, which they considered too risky.

Also in the ABP league are private insurance companies because CBN felt the need to spread the risks and cover as many farmers as it possibly can.