The Nigerian Federal Government has begun a fresh move to boost agriculture in the country as it approved a total loan package of about N5 billion ($37.9 million) for the development of the sector and poverty eradication.
Of the total loan amount, the International Fund for Agricultural Development (IFAD), an Italy-based United Nations agency, would contribute $27.78 million, representing 67.8 per cent of the figure.
The IFAD would also contribute a total grant of $386,800 towards the initiative. In addition, the Ford Foundation is to provide a grant of $500,000 while the Federal Government would contribute $6.17 million, representing 15 per cent of the total loan package.
The participating institutions would contribute a total of $4.762 million while the beneficiaries (farmers) would raise $785,100.
The loan is payable over 40 years with a moratorium on payment of 10 years. The loan is also interest-free. But it attracts a service charge of 0.75 per cent of the amount outstanding.
The Minister of Information and Communications, Mr. John Odey and his Agriculture and Water Resources counterpart, Dr Sayyadi Abba Ruma, told journalists at the end of the Federal Executive Council (FEC) meeting that the approval was in line with the government's policy thrust on agricultural development, wealth and job creation, food security, poverty reduction and provision of raw materials for self-reliant industrialisation.
The aim, Odey added, was to establish linkages with formal financing agencies with a view to creating viable rural financing institutions.
He said: "The Federal Executive Council took a bold step in seeking collaboration with established world financial agencies, particularly IFAD and secured a loan of $27.17 million for the development and strengthening of micro finance institutions. The aim is to establish linkages between the institutions and formal financing institutions with a view to creating viable and sustainable rural financing institutions.
"The ultimate goal is to develop rural financial services to enhance accessibility of the rural population to these institutions and to expand the productivity of Agriculture and micro rural enterprises with a view to alleviating poverty by focusing on the rural poor, especially rural women and the physically challenged.
The minister added: "The approval for this loan is sequel to the Minister of Finance memo to council seeking council's consideration and approval. The matter was renegotiated and IFAD insisted on the need for the rural farmers to have direct access to credit. What it means is that the programme will increase its credit base for the rural poor, agriculture and small and medium scale enterprises, which will reach 345,000 beneficiaries across the country.
"The programme will be implemented in 23 states with two states from each of the six geo-political zones of the country. Thirty-six local governments would also benefit and it will run for a period of seven years. Council approved that the Finance Minister should execute the agreement on behalf of the Federal Government."
