NIRSAL as catalyst for Buhari Agribusiness revolution, By Jackson Obadasha

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By far, President Muhammadu Buhari as of today ranks as the best president in agriculture. Never since the return of democracy in 1999 has Nigeria witnessed such resurgence in agriculture with all its value chain endeavours. NIRSAL is the silent driver behind the wheel.

The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) was launched in 2011 and incorporated in 2013 wholly by the Central Bank of Nigeria, CBN. And it has been discharging its mandate with clear-headed reforms for the rebirth of agriculture as of old.

The statistics are impressive. Over 12 million Nigerians are today actively engaged in the agriculture value chain. The evidences are manifest; at home and in the factories. Rice, cassava, palm produce and many others including poultry that constitute a staple in Nigeria are being produced in commercial quantity with value addition in a manner never before seen. The growth indices are in our faces. Unfortunately, it appears a few people are not happy with the strides made in agriculture. They are at pains to see well-produced local rice becoming the preferred by Nigerians. They cringe at the sight of local rice occupying huge spaces in Departmental Stores, major markets and in neighbourhood stores across the country. They suffer heart ache when they see locally produced palm and vegetable oil now beautifully packaged and branded. They are not happy that Nigeria has saved millions of dollars in forex from not importing wheat, millet, rice, beans etcetera as she used to.

Afflicted by a strange unpatriotic spirit, this garrulous few have turned the heat on NIRSAL. Their intendment, obviously, is to maliciously malign the agency and impugn the integrity of its Managing Director/CEO, Aliyu Abdulhameed. Subtly deploying some elements in the media space, they have in recent time launched an articulated attack on the agency and its drivers in a manner intended to rubbish the brilliant feat the Buhari government has achieved these past recent years.

However, some of these critics may be excused. They act on a wrong premise of their misunderstanding of the status of NIRSAL. They figure that it’s yet another loan-granting institution for agribusiness. It’s not. Instead, it holds a $500 million capital obtained through debenture which is fully subscribed to by the CBN. It uses such capital to de-risk loans farmers get from banks. In other words, when a farmer obtains a loan from a bank, NIRSAL stands behind to reduce the risk on such loan for both the loaner and loanee; more like a guarantor than a loaner.

But no matter, it’s hard, almost impossible, to obliterate the landmarks and strides achieved by NIRSAL as it rallies to deepen agribusiness in the country. Even the sworn enemies of the Buhari government cannot deny the impact of NIRSAL in rapidly boosting agribusiness. Except, they are playing politics. But no sane mind would play politics with agriculture. It’s the pathway to food security, source of raw materials for the primary sector and a defining emblem of the sovereignty of the nation.

Abdulhameed as pioneer CEO long ago hit the ground running. Often, pioneers are encumbered by the newness, even strangeness of their office. Some are fazed by the stage they suddenly found themselves. Not Adbulhameed. Armed with a Bachelor’s degree in Agricultural Economics and Rural Sociology, a Masters’ degree in Public Administration (with bias in Public Policy) from the Ahmadu Bello University, Zaria and an Executive Masters’ Certificate in Project Management from the highly coveted Project Management College of the United Kingdom, the multiple awards (local and international) winner is without doubt the right man for the job. And this perhaps explains why he has refused to succumb to cheap blackmail.

What is imperative is whether he’s discharging his duty in accordance with the mandate of the agency with defined deliverables. On this, the answer is a resounding ‘Yes!’ 

To fully appreciate the impact of NIRSAL, it’s important to first appreciate its goals one of which is to de-risk agriculture and facilitate agribusiness by sharing credit risks with lenders (banks) and borrowers (farmers) across the agricultural value chain. It’s also to engender an increase in innovative agricultural insurance products available to smallholder farmers and boost the uptake of same.

Other briefs include to provide technical assistance to players across agricultural value chains, supporting them through the transition from agriculture as a way of life to agriculture as a business; incentivize institutions, especially commercial banks, that are responsive to Nigeria’s new agricultural financing paradigm, and to rate these institutions according to their responsiveness.

It is noteworthy that NIRSAL is not an armchair de-risker. Its officials do not generate data from hotel rooms and offices. They are hands-on, moving round the nation to make on-site assessment. Recently, in response to its Credit Risk Guarantee (CRG) applications from two farmers, a palm kernel processor in Gbelebu, Ovia South-West LGA in Edo State and an integrated farm in Amafor Imeriewe in Ngor Okpala LGA of Imo State, they conducted pre-CRG issuance visits on both agribusinesses. It’s been the same process of on-site verification and assessment for all agribusinesses covered under its protective wing. The concept of NIRSAL by the government is commendable. It serves as a veritable tool for the promotion and sustenance of agribusiness for the purpose of making it attractive and profitable.

So far, it has facilitated the flow of over N148 billion from commercial banks and other sources into the agriculture sector since 2015. The key instrument in achieving this is the NIRSAL Credit Risk Guarantee (CRG) facility which gives money-back assurance to lenders who lend to agriculture in line with laid down guidelines. And with this has come many benefits including creating a total of 373,752 direct jobs and an estimated 1.8 million indirect jobs in the pre-upstream, upstream, midstream, and downstream segments of the agriculture value chain.

More than anything else, it has propelled agriculture from the low productivity level of subsistence farming to the profitable and more productive realm of mechanization, input supply, primary production, and processing.  This feeds well into the vision of Abdulhameed who has continued to insist that developing the nation’s agriculture value chain offers the most reliable pathway to achieving genuine socio-economic advancement for Nigeria. He believes that the niggling issues of crime, unemployment and inflation can be addressed by mainstreaming more Nigerians especially the youths into agribusiness. Nigeria has a huge youth population with many of them jobless, some have taken to the dangerous path of all manner of crime including cybercrime. Agribusiness offers a better alternative to wean them of crime and get them off the streets of perdition.

This is the essence of NIRSAL, a CBN initiative given more life under the Buhari government to make granting loans for agribusiness more attractive to lenders (banks). With close to 1,000 different agribusinesses assisted so far to access capital, and a risk crystallization rate of under 1%, NIRSAL’s $300 million risk-sharing facility remains the best option for businesses in the agriculture sector. The values it has added to agribusiness and the return on investment it has generated for the actors in the agribusiness space are inestimable totems that should elicit more funding for the agency rather than the cheap attempt to blackmail its leadership. 

·         Obadasha, an agronomist, writes from Abeokuta

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