BY EMEKA EJERE
Ecobank Nigeria Plc last week declared that it is supporting over 70,000 farmers with special loans nationwide to increase their capacity and yields during this planting season in a further demonstration of its commitment to the development of the nation’s agricultural sector.
The move, the lender said, is one of its initiatives to promote entrepreneurship in the sector and support the Central Bank of Nigeria (CBN’s) Anchor Borrowers Programmes (ABP) for the 2020 wet season with the Maize Growers, Processors and Marketers Association of Nigeria. The current global health pandemic, which has crippled the world economy, has again shown the relevance of the agric and SMEs to the development of any nation.
By extending the agricultural support loan to 70, 000 farmers this time, the pan African financial institution is matching words with action. The bank had at its Webinar held recently in Lagos, assured stakeholders in the agriculture and Small and Medium Enterprises (SMEs) sectors of the economy of its unwavering support. The assurance was at the instance of policymakers who also expressed their commitments to the growth of the two vital industries.
Presenting a paper titled: ‘Harnessing CBN and other Ecobank funding opportunities for Agribusiness in the emerging economic climate’, head of Agribusiness at Ecobank Nigeria, Ms Moji Oguntoyinbo, noted that Ecobank is sustaining its commitment to the agriculture sector in partnership with NIRSAL and some other developmental institutions in the next two to three years.
According to her, Ecobank is a partner with the CBN in all its intervention schemes and programmes which are focused on the development of the agricultural sector. She said, “This relationship is generating activities across the entire value chain of the sector.”
Oguntoyinbo listed the various schemes and programmes as Anchor Borrowers Programme (ABP), Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL), Commercial Agriculture Credit Scheme (CACS), Micro, Small and Medium Enterprises Development Fund (MSMEDF), Real Sector Support Facility (RSSF), Paddy Aggregation Scheme (PAS), Maize Aggregation Scheme (MAS) and Rice Distributors’ Facility (RDF).
A statement from the bank on Wednesday (July 15) quoted Oguntoyinbo as saying that the initiative is aimed at supporting the government to create an ecosystem that would give smallholder farmers access to funding and the required support to increase food production in the country.
According to her, the scheme was designed to connect smallholder farmers with processors and off-takers within the agriculture value chain.
The statement read in part: “We are creating opportunities in the agric sector that will help many smallholder farmers expand their business and become worthy employers of labour by adopting modern farming techniques for the betterment of our economy.
“We are in strategic partnership with NIRSAL and some other developmental institutions to achieve our purpose. We are also partnering the Central Bank of Nigeria in all its intervention schemes and programmes aimed at developing the sector. Our relationships are generating positive activities across the entire agric value chain.”
Partnership with NIRSAL
In January, Ecobank and NIRSAL) signed a Memorandum of Understanding (MoU) on an N70 billion portfolio commitment from the former to agribusiness projects initiated and de-risked by the latter.
The facility was to be drawn down in series, with the MoU effectively kicking off with an initial N15 billion agribusiness financing provision by Ecobank. The commitment by Ecobank was at the time the latest fruit of NIRSAL’s focus on breaking the jinx of poor investment in agribusiness by the financial sector by providing banks with strong incentives such as risk-sharing, technical assistance and innovative insurance.
The MoU was an offshoot of a meeting that took place between the two organisations on June 20, 2019. It is believed that the attraction for Ecobank and other commercial banks which have made portfolio commitments to NIRSAL-supported agribusiness projects are anchored on NIRSAL’s Mapping-to-Markets (M2M) strategy, conceived to de-risk and make operations in commodity value chains more efficient through optimized primary production in a closed financing loop.
Speaking at the MoU signing ceremony in Lagos, managing director, Ecobank Nigeria Limited, Mr Patrick Akinwuntan, said the bank was actively promoting agriculture as a strategic initiative to support national development which is critical to the wellbeing of Nigerians. According to Mr Akinwuntan, Ecobank was committed to working with NIRSAL to open up the vast opportunities that abound in agriculture and to ensure citizens benefit ultimately.
He said, “This is a collaboration; the federal government had made it clear that investing in the agriculture sector is very critical for Nigeria to succeed, especially taking into consideration the natural endowment God granted us in terms of population, land and whether.
“We have the opportunity to make agriculture the economic spinner for Nigeria. What we are doing is to fulfil this policy direction of the federal government and the Central Bank of Nigeria (CBN).”.
Mr Akinwuntan reiterated that “in Nigeria, Ecobank hopes to contribute positively to move the economy forward, creating employment for the teeming population through agriculture.
“We found a natural partner in NIRSAL as they have the requisite intellectual capacity to act as a meeting point for the stakeholders in the sector. The de-risking participation of NIRSAL gives us the will to provide these facilities at single-digit rates at a maximum of 9% to ensure that the users can make profits. When our customers make profits, we are also able to make profits. So, it is a win-win business for everyone”.
Managing director/CEO, NIRSAL Plc, Aliyu Abdulhameed, said that Ecobank’s onboarding demonstrated the growing acceptance of the CBN’s proposition of NIRSAL as an innovative mechanism targeted at de-risking lending to the agricultural sector and providing a safe climate for highly profitable private sector investments.
Abdulhameed said: “This MoU signing marks the beginning of a collaboration between NIRSAL and Ecobank on NIRSAL’s agribusiness initiatives and the development of products that will support lending to actors in the agricultural value chain in conformity with Ecobank’s risk acceptance criteria and credit process.
“With Ecobank’s commitment of an N70 billion portfolio to NIRSAL’s agribusiness initiatives, the bank and NIRSAL would jointly select and develop projects that will meet the financing needs of actors in NIRSAL’s focal commodity value chains.”
According to Abdulhameed, NIRSAL’s focus commodity value chains, otherwise known as the 5-4-3-2-1 commodities, include 5 Industrial Commodities – maize, soybean, wheat, cassava and cotton; 4 Export Commodities – hibiscus, sesame, ginger and shea butter; 3 Consumer Commodities – rice, sweet potato and beans; 2 Controlled Environment Agriculture Commodities – fresh fruits and vegetables (FFV) and aquaculture; and Integrated Livestock Commodity.
Under this agreement, and in line with its M2M strategy, NIRSAL was to identify and refer structured projects to Ecobank to support the bank’s deal origination and financing operations in agribusiness. On its part, Ecobank is to finance the projects leveraging NIRSAL’s Credit Risk Guarantee (CRG) which is a further comfort for lenders to agriculture and agribusiness.
Showcasing the potentials
In February, Ecobank Nigeria, in partnership with Vanguard newspapers, the Economic Forum Series and Nigeria Agribusiness Group (NABG), held the first edition of its Agribusiness Summit in Lagos.
The summit themed: ‘Unlocking productivity and investment opportunities across the Agribusiness value chain,’ was part of the bank’s determination to further showcase the potentials in the agricultural sector of the nation’s economy.
In his opening remarks, Mr Ademola Ayeyemi, Group chief executive officer, Ecobank Transnational Incorporated, asked players in the Nigerian agricultural sector to keep their eyes on the vast opportunities for every player in the value chain in enhancing the capacity to feed Nigeria’s 200 million people.
The bank’s Group CEO, Mr Patrick Akinwutan, noted that enhancing the productivity of Nigerian agriculture across the value chain would not only reduce the foreign exchange spent on importing food items but would also revive the role of the sector as a major exporter.