Nigeria, UNDP Launch $8 Million Agribusiness Project

The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), the Federal Ministry of Agriculture and Rural Development (FARD) and the United Nations Development Programme (UNDP) at the weekend launched an $8,066,500 Nigerian Agribusiness Supplier Development Project (NASDP), aimed at guaranteeing food security in the country.

The project seeks to eliminate the existing supply chain bottlenecks, particularly in the rice and cassava value chains, through improved linkage between production and processing actors.

Speaking at an NASDP signing ceremony in Abuja, the Managing Director of NIRSAL, Mr. Aliyu Abdulhammed, said his agency’s primary mandate was to fix the broken agricultural value chain thereby facilitating the flow of finance and investment to the agricultural sector.

Under the terms of the collaboration, NIRSAL, he revealed, will be contributing $1,558,500, approximately 20 percent of the entire funding requirement of $8,066,500 to implement the project.

“Out of NIRSAL’s contribution, the sum of $558,500 will be utilized under NIRSAL’s Technical Assistance Pillar for capacity building for the beneficiaries, while $1,000,000 is non-expendable credit that can be applied under the Central Bank of Nigeria Anchor Borrowers’ Programme (ABP) and other financing interventions,” Abdulhammed explained.

He said the project will directly impact over 10,000 smallholder farmers, and over 50,000 lives annually and consolidate capacity of processors across Nigeria through a better and structured logistics arrangement with primary producers.

The NIRSAL boss maintained that the UNDP’s intention under the project is to promote economic growth through local capacity building and robust Public Private Partnership to generate opportunities for income generation.

“The aim is to ultimately support gender responsive and inclusive policies that will stimulate and expand domestic and foreign trade for global competitiveness.

“The NASDP will thus focus on women empowerment and youth in Agribusiness through support to women’s cooperatives and youth enterprises. The inclusive business acceleration model will also be deployed towards these groups. It is important to emphasise that the inclusive business model will aim at providing quality basic products and services within the low-income communities. This will harness endogenous resources and opportunities for value addition. It will also build local capacities for managing harvest seasons with a long-term view of achieving sustained growth of commodity markets and price stabilisation” he added.

The NIRSAL boss said the project was envisioned to increase agricultural productivity, boost the nation’s GDP and ultimately improve the standard of living of the average Nigerian if successfully implemented.

He said NIRSAL, by mandate, shares risks with agricultural value chain playersparticularly providers of finance by providing credit risk guarantees on viable agricultural projects and supporting agricultural value chain players with technical assistance, innovative projects and several other catalytic initiatives.

“NIRSAL’s risk management mechanism include: our field ICT and our Project Monitoring Reporting and Remediation Offices (PMROs) in each state that monitor project performance in real time using the latest technology. Collaboration is at the heart of what we do.

“Therefore, this partnership with the NASDP will support the development of agriculture and agribusiness in Nigeria”, he said.

Earlier in his remarks, the Permanent Secretary, Federal Ministry of Agriculture and Rural Development, Hassan Bukar, described the ASDP is an African regional initiative targeted at developing inclusive supply chain linking smallholder suppliers to off-takers, thereby responding to the serious challenges affecting commodity value chains through Public-Private Partnership.

He said the Ministry has since put institutional framework in place to promote agribusinesses and investments.

“We are also working with key stakeholders viz donor agencies, financial institutions and the organized private sector, to build an agribusiness economy that would be sustainable in the area of food security, job creation, exports and for inclusive growth. “We are currently engaging CBN Anchor borrower scheme to give due consideration to cassava value chain.

“ASDP is focusing on production of cassava chips because of Nigeria’s insignificant market share of the dry chips global trade. “You may recall that in 2012 Nigeria secured orders from China for dry chips totaling 2.2 million MT and the first shipment to China of Nigeria dry chips took place in August that year. It was very remarkable that close to USD 534m was earned from the trade, however, this was not sustained.

“Efforts are now underway to link cassava farmers and processors to the export trade on chips, hence the need to urgently improve cassava chip production and supply chain system to meet demand from other countries”, he stated.

He urged Nigerians to take advantage of the opportunity presented by the ASDP to focus on cassava chips production, standardization and training to meet with market export requirements.

He assured that the Ministry and its partners on ASDP would continue to provide necessary support in the area of policy and regulation, provision of improved high yielding stem and disease resistant varieties, access to finance and market in order to improve Nigeria’s current market share.