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November 30, 2011

Nigerian government, banks to fund fertilizer, seeds supply

by Sunday William & Olayemi R. Ibrahim

The Nigerian federal ministries of finance and agriculture on 29 Nvember signed a 30 billion Naira (1 US$ = 161.71 NGN; December 8 2011) worth Memorandum of Understanding (MoU) with commercial banks in the country for the supply of fertilizers and seeds to farmers in the coming 2012 farming season.

Speaking at the signing of the tripartite MoU between the ministries and the banks, Minister of Finance, Ngozi Okonjo Nweala said the objective was to grow agriculture so that Nigerians could have cheap food on their tables, provide jobs for millions of young people and also achieve food security which is becoming increasingly important in today’s world.

Okonjo-Iweala gave a breakdown of the loan indicating that N22.6 billion is earmarked for financing fertilizer, N2.7 billion for seeds procurement and the balance for agro-dealers in which each of them would be entitled to N3 million.

She added that the loan shall be made available to registered agriculture input dealers across the six geo political zones at a subsidized interest rate of 7 percent per annum with the Ministry of Finance guaranteeing 70 percent of the loan principal payment.

It is envisaged that the partnership will ensure that at least 500, 000 farmers would have access to the agriculture input and the initiative to create about 3,500 jobs and also generate 20 million metric tons of food.

The minister said the Growth Enhancement Support (GES) programme, which is private sector driven and being supported under the financing arrangement with the government guarantee covering 70 percent of the total loan (about N17 billion of the loan amount) replacing the old inefficient fertilizer system that was led by the government.

The Minister of agriculture  Akinwumi Adesina said the role of the government was to provide enabling environment for farmers and not to procure and distribute fertilizers adding that the federal government believes that agriculture is not a government development project but a business.

“Fertilizer is like other commodities in the market, if you can get coca-cola in the market you can also get fertilizer without any problem,” he said.

The chairman of bankers association of Nigeria, Aigbojie Aig-Imoukhuede said the loan will be available over the next 30 days.

Daily Trust

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