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Heritage Bank’s agric financing scheme is commendable


Heritage Bank Limited

Heritage Bank Limited

The cheering news of the slight rise in the price of crude oil in the international market and the seemingly relative calm in the Niger Delta (as reflected in the reduction in the breaching of pipelines and other oil production or lifting facilities in the zone), will ultimately translate to more foreign currencies in the coffers of the Federal Government, especially given that the 2017 budget of the Federation is largely predicated on earnings from oil – pegged at projected production and export levels of 2.2 million barrels per day.

Nevertheless, it is doubtful if the country, at least in the short term, can earn enough foreign exchange, particularly the United States Dollars, to meet the between $3 billion and $5 billion needed for the sustenance of projected expenses on the importation of food items in 2017. Even then, experts agree that even if the requisite volume of foreign exchange ever becomes available, the Muhammadu Buhari administration would be cautious given the dangers the continuous reliance on imported food items pose to its efforts to create jobs as well as develop and diversify the Nigerian economy.

Indeed, the essence of the administration’s Agriculture Promotion Policy (APP), launched some months ago is to encourage massive local investments in the critical agricultural sector with the aim of achieving key goals of food security; import substitution; job creation; and economic diversification. As captured by Chief Audu Ogbeh, the Minister of Agriculture during the policy’s launch, the government expects the private sector to lead in the implementation of APP through promotion of agricultural investment and financing programmes or initiatives. 
The recent provision of a N2 billion loan facility by Heritage Bank in collaboration with the Central Bank of Nigeria under the Commercial Agriculture Credit Scheme, to Triton Aqua Africa Limited (TAAL), for setting up of fishery production chain, has been widely acclaimed as a worthy example of what the government is aiming at. Though it is estimated that Nigerians consume about 2.7million metric tonnes of fish annually, only 800,000 metric tonnes of that amount is produced locally.

As such, just like several other food products, the country has had to rely on importation to augment the shortages with an estimated cost implication of about $700m annually in terms of foreign exchange. The partnership between Heritage Bank and TAAL, also known as Triton, will help reverse this trend. Specifically, the company is expected to use the loan facility to expand its aquaculture businesses with the setting up of nursery/hatchery for the production of fingerlings and brood stock, and earthen ponds for catfish and tilapia in Lagos, Oyo and Osun states. With the support of Heritage Bank and the CBN, the firm of Triton Aqua Africa Limited is executing a strategy of backward integration of increasing local production to reduce importation of fish.

The company will also help small-scale farms increase their fish production by making fingerlings easily available to them. In the short term, the loan support is expected to help Triton double its current production capacity of 25,000 metric tonnes with a projection that the company will scale up its production to 100,000 metric tonnes in five years. Ultimately, the partnership between Heritage Bank and Triton Farms would help boost local production, conserve scarce foreign exchange and enhance food security, and ultimately result in the creation of hundreds of new jobs, thus fitting snuggly into the Buhari administration’s Agriculture Promotion Policy agenda.


Industry experts insist that the long-term tenure of the facility from Heritage Bank is a vivid demonstration of the fact that Nigeria’s financial institutions are positively responding to the complaints or fears of investors and farmers about the peculiarity of funding the agricultural sector. The complaint over the year was that while agricultural projects have long-term gestation periods, the funding provided by the banks was always of short-term duration. This mismatch in expectation between the lenders and the loan beneficiaries had over the years proved to be a major hindrance especially in the funding of big tickets projects in the agricultural sector of the economy. 
Farmers and potential investors in the agriculture sector had consequently always accused the banks of preference for funding only projects with quick turnaround but without much value to the country in terms of job creation and contribution to the country’s development.

However, living up to its philosophy of Create, Transfer And Preserve Wealth, Heritage Bank has taken agriculture as one of the prime sectors, which can be used to empower individuals and communities in terms of creating wealth from the soil and through the entire value – chain using value addition and industrialization. Therefore, the bank, in spite of its relatively young age, has been supporting various agricultural ventures across the country. 
Key among such initiatives is Heritage Bank’s multi-billion Naira partnership with the Oyo State government. Under the initiative, the Bank is supporting the Oyo State Agricultural Initiative, OYSAI, 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 huge, albeit laudable, project that is 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. Heritage bank is supporting agro investors involved in this initiative with funds and advisory services and indications are that the programme has already led to more than 20 per cent increase in food production in the State. 
Outside of Oyo State, Heritage Bank is also supporting thousands of small holders’ farmers in Kaduna and Zamfara States in rice and soybeans production under the Anchor Borrowers Programme.

The management of Heritage Bank believes that such funding supports in the critical agricultural sector are necessary if the objectives of the Buhari’s administration to diversify the nation’s economy using, particularly the agricultural sector, are to be attained. The administration targets a GDP growth of 6% – 12%, allowing agricultural household income to double in 6-12 years. Undeniably, most of the ventures in the agric sector fall within the Micro, Small and Medium Scale Enterprises (MSME) sectors of the economy, which Heritage Bank in close collaboration with CBN has been championing. Heritage Banks initiatives in the agric sector can therefore be seen as extension of the strong support it has provided to MSMEs with specific targets on key sectors pivotal for national economic growth like ICT, creative industry and of course, agriculture. It was in recognition of the Bank’s track record on this score that apparently influenced its selection by the CBN as its pilot partner for the execution of the N3 billion Youth Innovative Entrepreneurship Development Programme (YIEDP).


The programme is aimed at creating sustainable wealth and employment in the country with focus on dependable job creating sectors such as agricultural value chain (fish farming, poultry, snail farming), cottage industry, mining and solid minerals, creative industry (tourism, arts and crafts), and Information and Communications Technology (ICT). Also, the bank in partnership with the Centre for Values in Leadership (CVL) empowered 100 aspiring start-up entrepreneurs under the Young Entrepreneurship Business Training Programme (YEBTP), a six-month intensive course involving grooming, mentoring and financing.

In addition, Heritage Bank Limited has also been in partnership with the Nigerian Youth Professional Forum (NYPF) to support entrepreneurship and education in the country with N500 million Young Entrepreneurs and Students (YES) grant. The Bank’s focus on empowerment of the youth population stem from its belief that the nation’s youth population would ultimately produce future leaders that would help to positively reshape and reposition Nigeria, hence the imperative that they be properly groomed and provided with enabling opportunities and platforms to actualize their potentials.

With its assortments of innovative support for the growth of the productive sector of the economy, Heritage Bank is not only actualizing its vision of partnering with individuals, organisations and governments to create, preserve and transfer wealth across generations, but is also playing a crucial role in helping to achieve the government’s ambition of diversifying the economy. Clearly, Heritage Bank is showing the way as financial institutions in the country are becoming resolute about financing the critical agricultural sector and by extension, aiding efforts to diversify the nation’s economy.
. Dr. Nonso Awih-Williams, an agric-economist, wrote from Abuja.

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