CBN releases guidelines for private sector agric scheme
NEWSMAN, Abuja – Central Bank of Nigeria (CBN) has released the framework for the Private Sector-Led Accelerated Agriculture Development Scheme.
The move is in line with the developmental mandate of the Apex Bank targeted at expanding access to finance to critical sectors of the economy to achieve food self-sufficiency as well as diversification.
To address the food security and youth unemployment challenges across the country, 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.
According to the guidelines, 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.
The guideline also stated that 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, Vanguard reported.
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.