FG Seeks N455bn Loan From Brazil To Fund Agric Mechanisation

The Federal Government has disclosed plans to borrow $1.2bn from the Dutch Bank and the Development Bank of Brazil to deepen mechanization in the Nigerian agriculture sector.

The $1.2bn when converted to the Naira based on the N379 to a dollar exchange rate of the Central Bank of Nigeria translates to about N455bn.

Speaking with Journalists in Abuja, the Senior Special Adviser to the President on Agriculture, Andrew Kwasari said that the initiative is under the Green Imperative Project of government that is aimed to address issues of mechanisation and provide agro-processing.

He said, “The Green Imperative will address issues of mechanisation and provide agro-processing. These two will work together through service centres that will be created in each Local Government Area in Nigeria.

“The Green Imperative is a borrowing programme that will inject foreign direct investment of €995m, that is $1.2bn.”

The green imperative agreement which was signed between Nigeria and the government of Brazil for the production and deployment of 10,000 tractors to be assembled in the country, captured mechanisation as a priority project to boost the sector

According to Kwasari, the loan request is currently before the National Assembly.

“This project has been in the making for quite some time and we have reached a point where we are completely ready for its take-off,” he said.

According to him, the programme which will be private sector driven, has a financing agreement of 15 years for repayment and an interest rate that is below three per cent per annum.

“This has been structured financially to allow the government use bilateral negotiation and arrive at a financing that is below three per cent per annum interest rate and a gestation period of about 15 years to be paid.

“This removes the risks of this loan from sitting on our sovereign guarantee because we have sold the risk and reinsured this loan in the international insurance market,” he said.

Speaking further, Kwasari said that all the service centers to be established across the country will be owned and operated by private entrepreneurs who will have the responsibility of servicing the loan.

The Director, Mechanisation, Federal Ministry of Agriculture and Rural Development, Abdullahi Abubakar, pointed out that under the green imperative, there will be primary and secondary service centres to deal with production and processing.

“For the production, we should expect equipment such as tractors, implements that can be used to serve the farmers in a particular community or local government,” he said.