Nigeria has signed a $3 billion agriculture financing deal with the United States Agency for International Development (USAID) to empower its agricultural sector.
The agreement which was signed at the Central Bank of Nigeria (CBN) headquarters in Abuja by the CBN Governor, Lamido Sanusi, Nigeria’s Minister of Agriculture and Rural Development, Akinwumi Adesina and USAID Administrator, Rajiv Shah; is anchored on the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) project that was introduced to encourage banks to lend to farmers from their balance sheets, rather than just collecting money from the CBN.
The deal will enable the parties to use co-guaranties, joint technical assistance, combined training and workshops for local banks and agriculturally related enterprises and other interventions to encourage the growth of the agriculture sector in Nigeria.
Under the agreement, the US would immediately provide guarantee of up to $100 million in commercial lending to Nigerian banks which will help in increasing private financing to the sector as well as reduce banks’ apathy to agricultural lending.
Speaking at the occasion, USAID’s Shah, said “We are very proud of this partnership agreement because we know that in all of the promise and success that the future holds for Nigeria agriculture; nearly 70 per cent of small scale farmers lack access to financing.”