FG moves to galvanise mechanized farming, others with $1.2bn loan
THE Federal Government, Wednesday, disclosed moves to galvanize mechanized farming and other aspects of agriculture with $1.2 billion loan under the Green Initiative project in order to boost food security, availability, affordability and job creation across various value chains.
This was made known by the Special Senior Adviser to the President on agriculture, Andrew Kwasari, at a press conference held in Abuja.
According to Kwasiri in his explanation the Green Imperative is an agricultural bilateral project that has been agreed upon to be delivered in Nigeria, between Nigeria and the government of Brazil.
He said: “This project has been in the making for some time now; we have reached the point where we are completely ready for its takeoff. The green imperative will address two twin issues with agricultural modernization in Nigeria; provide mechanization, and provide agro property and these two works hand in hand through what we call service centers and these service centers will be created in each local government across the country to compliment and support the primary production through mechanization and value addition through agro properties.
“These have carefully been designed over the years and we are happy to have update today because we have been waiting for the national assembly to give a go ahead to activate this loan.
“The most important thing is that it is private sector driven so all the study centers will be on and operated by private entrepreneurs and they would have the responsibility of servicing the loan.
“So if we are to summarize the green imperative, it is a project that will engage foreign direct investment of €995 million or $1. 2 billion that has been structured financially to allow the government of Nigeria use her bilateral provision and arrive at a financing that will develop three per cent per annum interest rate and also have a long gestation period of about 15 years to repay, and then subsequently structured so that this loan having secured, Nigerian insured it in the insurance market. “So we have financing coming from Dutsche Bank, Development Bank of Brazil and then it is reinsured by the Islamic Development Bank, the Islamic Corporation for Insurance of Export Credit.
“This removes the risk of this loan; we have reinsured this loan in our international insurance market. Subsequently then, the loan would be structured with a monetary policy from Central Bank which has been developed jointly; Central Bank, Ministry of Finance and Ministry of Agriculture to allows the unlending of this loan to entrepreneurs and these entrepreneurs will be given a loan at domestic level so what comes to our local entrepreneur is Naira denominated loan with a monthly policy the draft of which has been finalized by the Central Bank and participating financial institution that we allow our entrepreneurs take up this loan and utilize it and pay back effectively.”
He also added that “Nigeria is leveraging its bilateral understanding to secure a very cheap loan for entrepreneurs that are private sector people and the private sector will run the business of the private sector.”