Disbursements for multi-billion naira projects in agric sector
At the dawn of the fall from economic royalty, once enthroned by oil fortunes, Nigeria realised the potential inherent in agriculture and pursued with projects worth billions, in efforts to boost growth through import substitution goals.
Of course, food production is a major challenge all over the world, and with rising population, the demand for food has made it imperative for countries to invest heavily in agriculture.
In Nigeria, access to finance still remains a major challenge, but to increase funding for the sector, the Central Bank of Nigeria (CBN) and Nigerian banks established various agricultural schemes as a way of bridging gap.
Besides the most recent and popular initiative called Anchor Borrowers’ Programme (ABP), there are the Commercial Agriculture Credit Scheme (CACS), Commercial Agriculture Development Programme (CADP), the Interest Draw-Back Scheme and Agricultural Credit Support Scheme.
The broad objectives of most of the schemes are to fast track development of the agricultural sector by providing credit facilities to commercial agricultural enterprises at a single digit interest rate; enhance national food security by increasing food supply and effecting lower agricultural produce and product prices, thereby promoting low food inflation; generate employment and diversify revenue base.
In complimenting the efforts of the apex bank, Nigerian lenders, particularly, Heritage Bank Plc, has made a huge success of the schemes, by making funds available to both individuals and corporate organisations.
Under the headship of Ifie Sekibo, as the Managing Director and Chief Executive Officer, Heritage Bank has financed critical agricultural projects in the country and, in the process, putting smiles on the faces of many farmers.
Within the five years of operations, the bank is evolving into a bigger and stronger financial institution, particularly now that the country has great challenge, matched with great opportunity, of feeding its citizens and driving the nation’s economy forward.
These entails harnessing of the energy and skills of the young adults in the production, processing and marketing of food for the teeming Nigerian population. Nigerian youth will find opportunities as entrepreneurs, service providers and paid workers in a sector that is gaining popularity as solution to the troubled economy.
Heritage Bank has continued to make efforts in agricultural financing and taken the front seat in the drive to support government, corporate and individual (including young people) in the attainment of the noble agricultural goals, funding various agricultural projects in several states in the country, especially in Oyo, Kaduna and Zamfara states.
To achieve these, it has triggered assertiveness, deliberate, creative and productive action among the populace towards wealth-creation and self-sufficiency through agriculture sector, identifying with the Micro, Small and Medium Scale Enterprises (MSME).
Sekibo said the bank would not relent in its efforts at boosting the agriculture base of the nation, affirming that the financial institution would continue to make farming profitable to stakeholders and attractive to the youth.
He, however, noted that the bank would support the drive for cash crop commodities that would boost Nigeria’s foreign exchange earnings, to end the continuous reliance on imported food items, which poses danger to efforts to create jobs, as well as develop and diversify the economy.
The bank’s foray into agriculture financing also include aquaculture and reforestation projects. In collaboration with CBN, it has provided N2billion long term facility under the Commercial Agriculture Credit Scheme (CACS) to Triton Aqua Africa Ltd (TAAL).
The financing was under the CACS scheme, facilitated by Heritage Bank, to set up aquaculture businesses; nursery/hatchery to produce fingerlings and brood stock in Ikeja and earthen ponds for catfish and Tilapia in Asejire, Iwo and Gambari towns in Oyo State.
Globus Resources Limited, a subsidiary of Triton Group, also received the same support, to flag off the second phase of afforestation programme in Oyo state. Nigeria’s current demand capacity for fish is estimated at 2.7million metric tons and the country currently produces 800,000 metric tons.
Triton is now producing 25,000 metric tons and with them on board, about 25,000 metric tons capacity will be added to our current production, the company’s projection is to reach 100,000 metric tons in five years.
The bank is supporting the Oyo State Agricultural Initiative, a programme designed to revive agriculture, boost agro-allied businesses and massive empowerment programme for both youth and women across the state through the creation of thousands of jobs in the sector.
This project, spread across 3,000 hectares of land in 28 of the 33 Local Government Areas of Oyo State, is in three stages- food crop cultivation, cash crop/horticulture and food processing.
In Kaduna and Zamfara states, the bank has also assisted small holder farmers to benefit from financial support for rice and soya beans production, under the Anchor Borrowers Programme (ABP).
Sekibo said the bank’s drive to support rice production is borne out of the conviction that agribusiness is profitable and act of patriotism to achieve food security and sufficiency in the country.
In 2016, N54.9 million and N248.4 million were sourced from CBN and disbursed as loans to 185 rice farmers and 414 soya bean farmers respectively in Kaduna State. Also, in the same period, N38 million was disbursed to 259 rice farmers through 11 cooperatives in Zamfara State.
The Bank executed deals for partnership with the Nigeria Incentive-based Risk Sharing for Agricultural Lending in 2017, and already consummated some transactions like Poultry farming in Oyo State, N29million; Maize cultivation in Ogun State, N157million; and Cassava cultivation in Kebbi State, N500million, approved by CBN.
Under the Homegrown School Feeding Programme of the Federal Government, the bank, which only participates in Oyo State, said as at date, N1.8 billion has been received and disbursed by it to food vendors and supplier; over 1,500 cooks have been enrolled on BVN across the 33 Local Government Areas of the state; more than 3,000 accounts have been opened by cooks/vendors; and 1,433 customised Oyo/HGSFP debit cards have been issued.
The bank also signed a N232 million pilot phase of out-growers agreement with Biase Plantations Limited (BPL), and its joint venture partner, PZ Wilmar Limited, to produce best-in-class palm oil, using the ABP model. The first tranche of N113million has been received and disbursed accordingly.
The pilot scheme covers 45 farmers, grouped into four co-operative societies with a land mass of 150 hectares, and the funds to be administered is from BPL.
It is in recognition of the bank’s track record in youths’ scheme that apparently influenced its selection by the CBN as its pilot partner for the execution of the N3billion Youth Innovative Entrepreneurship Development Programme (YIEDP).
Under the scheme, youths were encouraged to start young and create wealth, adding that from 80 per cent of applicants under the youth empowerment programme choose agriculture as the preferred sector- agricultural value chain (fish farming, poultry, snail farming), cottage industry, mining and solid minerals, creative industry (tourism, arts and crafts), and Information and ICT.
There have been several partnerships with the private sector operators. The bank supported NatnudO Foods, a food processing company in its determination to make poultry affordable and accessible for the people.
It also partnered BKG Exhibitions Limited, in organising Nigeria’s first “PalmTech Expo” to catalyse the resuscitation of the palm oil industry in Nigeria, based on the rapid development and increasing contribution to the nation’s Gross Domestic Product (GDP). Consequently, 13 states in the palm oil producing states across the federation in conjunction with over 50 Nigerian and international companies were exhibitors at the expo.
The lender has also partnered the Nigerian Youth Professional Forum (NYPF) to support entrepreneurship in agricultural sector and others with the launch of a N500 million Young Entrepreneurs and Students (YES) grant.
The partnership was through the Centre for Values in Leadership (CVL), which empowered over 100 aspiring start-up entrepreneurs under the Young Entrepreneurship Business Training Programme (YEBTP).
“We have been playing strongly in the education and Small and Medium Scale Enterprises (SME) sectors of the economy. This project syncs with our mission and vision as a bank. The age bracket of 18 to 40 years for the beneficiaries also aligns with our corporate goal, just like the key sectors, which include agriculture, ICT and creative industry, identified for the project are pivotal for economic growth,” Sekibo said.
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