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FG, German Development Bank establish $100m agric fund

By BusinessNews Staff on February 26, 2014

The Federal Government and the German Development Bank have established a $100m fund for agricultural financing in Nigeria.

The Minister of Agriculture and Rural Development, Dr. Akinwunmi Adesina, stated this at the inauguration of the Executive Leadership of the Nigerian Agric-business Group in Abuja on Monday.

He said that FAFIN would provide financing of $2m to $5m to qualified agricultural businesses.

Adesina stated that an independent survey of 75 leading agricultural businesses, which was conducted in 2013, showed that the enterprises were facing serious challenges.

These, he said, included infrastructure, financing, supply, security, government regulations, taxation and policies.

The minister explained that the ministry was addressing the first four challenges through the establishment of staple crop processing zones.

He said, “The staple crop processing zones are expected to add an additional N1.4tn to the GDP of Nigeria. They will help to create 250,000 jobs across the country.

“Cargill, the world’s number one food company, will be investing N33bn ($200m) to set up cassava-to-starch and cassava-to-sweetener manufacturing plants.”

The minister added that staple crop processing zone at Alape, Kogi State, would become a centre of excellence in processing cassava fresh roots into starch and sweeteners.

“To address the issue of financing, the Federal Ministry of Agriculture and Rural Development, the German Development Bank and the Federal Ministry of Finance have established the Fund for Agricultural Financing, a private equity and quasi-equity and debt fund, which will deploy $100m in long term finance to agric-businesses,” Adesina said.

He added that the President Goodluck Jonathan administration had ended four decades of fertiliser corruption in the country.

According to him, the private sector now sells farm inputs to farmers instead to the government.

He said, “To cut out the rent-seeking middlemen, who for decades have cheated farmers, we launched an electronic wallet system.

“The system allows smallholder farmers to receive subsidised electronic vouchers for seeds and fertilisers directly on their mobile phones. Farmers use their electronic vouchers to pay for farm inputs from private sector agricultural input dealers.”

[Punch]

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