NIGERIA’S federal government is set to borrow $1.2bn from the Dutch Bank and the Development Bank of Brazil as part of an ambitious plan to provide capital for investment in mechanised agriculture across the country.
Heavily dependent on crude oil which accounts for over 90% of federal government revenue, Nigeria is very vulnerable to the economic fallout of the coronavirus pandemic as it has hit petroleum demand and prices hard. Facing a total collapse in revenue, the government has been forced to look at ways of diversifying the Nigerian economy and agriculture is seen as one way out.
Andrew Kwasari, President Muhammadu Buhari’s senior special adviser of agriculture, said that the loans from Brazil and the Netherlands were being procured under the government’s Green Imperative Project. He added that the loans were structured with a monitoring policy with the Central Bank of Nigeria to allow lending to entrepreneurs in naira.
Mr Kwasari said: “The Green Imperative Project will address issues of mechanisation and provide agro-processing. These two will work together through service centres that will be created in each local government area in Nigeria.
“This project is a private sector driven one, so all the service centres will be operated by private entrepreneurs and they will have the responsibility of servicing the loan. The Green Imperative Project is a borrowing programme that will inject foreign direct investment of €995m, that is $1.2bn.
“This has been structured financially to allow the government use bilateral negotiation and arrive at a financing that is below a 3% per annum interest rate and a gestation period of about 15 years to be paid.” He added that the loan had been insured and that financing was coming from the Dutch Bank and Development Bank of Brazil, while the fund was insured by the Islamic Development Bank.