Nigeria approves loan facility worth US$1.2 billion for agricultural mechanization

- Advertisement -

In a significant move, Nigeria’s Federal Executive Council has given its approval to a loan facility of US$1.2 billion to finance agricultural mechanization.

Sabo Nanono, the Minister of Agriculture and Rural Development, announced the decision while briefing media correspondents. However, he didn’t provide details of the loan, including its source and conditions.

“Today, we presented a joint memo with the Federal Ministry of Finance in which we seek the approval for a loan facility of about 950 million Euros translated approximately to 1.2 billion US dollars. This is going to be a major revolution in the agriculture sector, that we have never seen before,” Mr Nanono said.

According to the minister, the funding would be used to set up over 630 tractor serving centres constituting IT and admin offices, chemical workshops and storage facilities. Each tractor will be equipped with an advanced tracking system for the accurate identification of the area and to record the amount of revenue generation.

It is to be noted here that the serving centres will be privately owned by the indigenes of the local government areas on a loan basis. They will be chosen through a competitive bid based on one’s experience in agriculture, financial position and investments of between N10m (US$25,000) to N70m (US$180,000).

“Because you may probably be handed an asset of over N150 million (US$387,000), so we will not take that chance,” the minister said.

For beneficiaries, it would take around 3-4 years to conclude the loan payments, after which the N150 million (US$387,000) worth assets becomes their personal property.

Nigeria has about 7 tractors per 100 sq km as against 27 tractors owned by Kenya.

Underlining the necessity of agri-mechanization, Nanono highlighted that, “In fact, the standard is 127 tractors per 100 square kilometres. In most developed countries, it’s about 1000 tractors per 100 square kilometres.”

“We anticipate seven million direct jobs from this and 20 million indirect jobs. So that is the essence of this. There will be 140 agro-processing plants attached to these service centres across the 36 states of the federation,” he said.