CBN Releases Guidelines For Agric Development Scheme, Pegs Maximum Loan Per Beneficiary At N2bn

The Central Bank of Nigeria has released the framework for the Private Sector-Led Accelerated Agriculture Development Scheme.

The move is in line with the developmental mandate of the Central Bank of Nigeria targeted at expanding access to finance to critical sectors of the economy to achieve food self-sufficiency as well as diversification.

While pursuing this mandate, the population of the country has continued to rise at nearly three per cent annually.

Recent studies indicated that the country’s population pyramid is bulging around the youth segment, with an estimated 75 per cent of the population identified to be aged below 35 years.

A large segment of this population would have eked out a living if adequate opportunities were harnessed in agriculture given its potential of employing over 70 per cent of the nation’s workforce.

While addressing the rising food security challenge due to unproportionate production compared to population growth; value addition to agriculture; including provision of more land for cultivation has remained stagnant over the years.

To address the food security and youth unemployment challenges across the country, the CBN said it is introducing the Accelerated Agriculture Development Scheme to engage 370,000 youth in agricultural production, in collaboration with state governments.

The Private Sector-Led Accelerated Agriculture Development Scheme was also developed to complement AADS by exploring private sector partnership to facilitate more rapid land clearing for production of key agricultural commodities

The specific objectives of the scheme are to fast track land clearing for primary production of agricultural commodities; promote food security through the provision of large contiguous land for agricultural production across all states; and collaborate with agro-processors engaged in backward integration by providing financing for extended land clearing in proximal locations for cultivating commodities for supply of industrial raw materials.

Others are to support other capable stakeholders interested in unlocking land for agriculture through appropriate financing; and engender job creation for individual farmers that will cultivate on the cleared land.

According to the guideline, agricultural commodities eligible for consideration under the Scheme are rice,maize, cassava, cotton, wheat, tomato, poultry, fish, sorghum, oil Palm, cocoa, livestock/dairy and any other commodities as may be listed by the CBN from time to time.

Based on analysis of the framework, the maximum loan accessible under the Scheme was pegged at N2bn per obligor.

The facility is expected to be repaid from the Economics of Production for cultivating on the cleared farmland.

The CBN in the guideline said that interest rate under the intervention would be five per cent per annum up to February 28 2021, after which interest on the facility from March 1 2021 would be at nine per cent per annum.