Nirsal MD commends FG for making agriculture top priority in Economic Recovery Plan

The Managing Director of the Nigerian Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL), Mr. Aliyu Abbati Abdulhameed has commended the Federal Government for making agriculture one of the six priority sectors of focus in the Economic Recovery Growth Plan (ERGP).

NIRSAL was launched in 2011 and incorporated in 2013 by the Central Bank of Nigeria (CBN) as a dynamic, holistic 500 million dollar public-private initiative to define, measure, price and share agribusiness related credit risk.

According to Mr Abdulhameed, the decision is the right one because agriculture has unrivalled capacity to create jobs, reduce poverty and drive inclusive economic growth.

The NIRSAL MD/CEO stated this while delivering a paper titled “Powering Nigerian Agriculture Through Innovative Financing: The NIRSAL Edge” at the Agribusiness & Food Security Summit 2017 organized by Businessday Media Limited.

The NIRSAL MD asserted that the administration’s strong emphasis on agriculture is evident in its programs and initiatives, citing government’s support for agencies such as NIRSAL.

In his words: “It is heartwarming indeed that the Federal Government is going beyond the much talked about potentials of agriculture to actually demonstrating, through practical policies and initiatives that it is committed to transforming agriculture for the good and progress of the country”

Expressing NIRSAL’s readiness to play its part in the realization of the economic recovery plans, Abdulhameed listed key NIRSAL plans for 2017: leveraging its balance sheet to facilitate N60 billion in fresh commercial bank lending, executing the $300 million African Development Bank’s Youth Enable Program and activating the $500m Mechanization Partnership with the Brazilian Government amongst others.

NIRSAL’s broad objective is to increase lending to 3.8 million farmers by 2026 through cooperatives and value chains. The agency also plans to reduce the break-even interest rate to agribusiness borrowers from 22% to between 7.5% and 10.5%.

Abdulhammed stated that the current economic context and the changing global economy demand that the country moves with greater urgency to fix Nigerian agriculture.

Also present at the event were Senator Heineken Lokpobori, Honorable Minister of State for Agriculture and Rural Development, Prof. Ruerd Ruben, Research Coordinator Food Security, International Value Chain & Impact Assessment at the Agricultural Economics Institute of Wageningen University, the Netherlands and Alhaji Sanni Dangote of Nigeria Agric Business Group (NABG) amongst others.

According to Mr. Abdulhameed, NIRSAL is a key part of the government’s multi-pronged strategy to move agriculture beyond potential to significant progress.

Specifically, he stated that NIRSAL’s role is to help solve the longstanding problem of inadequate financing of the agricultural sector by leveraging its $500 million fund to incentivize lending to the sector.

He pointed out that NIRSAL does this by ‘de-risking’ the agricultural financing value chain, building long-term capabilities and institutionalizing agricultural lending through risk sharing with banks, technical capacity building as well as the provision of incentives to encourage bank lending.

Speaking on the impact of NIRSAL on lending to Agriculture while operating as a transition office between 2012 and 2016 — a period he termed NIRSAL 1.0, Mr Abdulhameed said the institution provided bank guarantees totaling N64.142 billion for agricultural projects.

In relation, he added that the initiative facilitated bank finance worth N695M ($3.5 million) for the purchase of 227 tractors to Tractor Owners and Hiring Facilities Association of Nigeria (TOHFAN) and Small Scale Women Farmers Organization to ensure access to tractors at low prices.

Also within this period, NIRSAL boosted capacity of commercial banks by providing technical training for 187 bank desk officers, 185,000 farmers and 205 extension workers across the country.

Abdulhameed informed participants at the summit that NIRSAL is now fully staffed, has a proper Head Office in Abuja as well as offices nationwide and is ready for full operations. He announced 2017 as marking the start of NIRSAL 2.0, a period he said will be defined by pro-active action and deployment of strategic projects to fix lingering problems in the agricultural value chains.

Accoding to him, "NIRSAL 2.0 marks the end of the gestation period when we waited for banks to generate projects to be financed and the beginning of a new era where we are pro-active in identifying impactful projects and facilitating finance to power them. We are now properly set up to study, identify, build and mainstream financing models for special projects that will change agricultural finance in Nigeria”