The Nigeria Incentive-Based Risk Sharing System for Agriculture Lending (NIRSAL), with the mandate to facilitate seamless flow of affordable financing to all players along the entire agricultural value chains and pare the risks of financing institutions granting agricultural loans through capacity enablement for banks and value chain actors, has failed in a self-defeating manner.

Failing the test of true commitment to the course for which it was established as in contrast to de-risking the process, it has withheld the sum of N342 million approved by the Central Bank of Nigeria (CBN) under the Anchors Borrowers Programme (ABP) for a southwest maize farmers’ cooperative, Hope Concept Investment Cooperatives and Credit Union, to commence production for the rainy season planting.

Over two weeks after the CBN credited NIRSAL with N246, 523,120 as first tranche of the payment for onward remittance to farmers, who have been in earnest wait of the federal intervention fund, the system has kept them circumventing a circle of trainings, workshops and town hall meetings, which were out rightly unnecessary since the CBN had dotted the i’s and crossed the t’s before disbursement.

A CBN credit advice note dated 18th and 19th July with the reference no MDC1820000099/BNK reads “BNG RELEASE OF FUNDS FOR 1ST TRANCHE DISB IFO HOPE CONCEPT MAIZE FARMERS IN OGUN THRU NIRSAL UNDER ADP, DFD/ABP/GEN/INT/006/058 DD170718.”

The NIRSAL’s operational office in Abeokuta where the fund was transferred following mounting pressure by farmers was dragging feet to do the needful on the excuse that authoritative signal from its head office in Abuja was not giving the needed directive to take the next step of transferring the money to the appropriate account.

The implication of this risk-generating disposition of the NIRSAL is that the farmers will be endangered in a number of detrimental ways. They will lose out on the opportunity to grow under rain-fed condition and eventually expend huge cost on irrigation. They will likely be confronted by lower yield per hectare, compounded production cost, weakening of the potential for the loan repayment, all of which combine to puncture the confidence of off-takers in sourcing raw materials locally.

Before the CBN deemed the cooperative fit of accessing the N342 million, several background checks on the mechanisation status of the farmland, the bank verification numbers of individual farmers, the authenticity of the factory of the anchor that would off-take the produce were conducted to the satisfaction of disbursement standards. Upon approval of the group’s request, the group also fulfilled the payment of a requisite N16 million equity counterpart funding, which is 5 percent of the financing.

“The record of CBN has started counting from the day the fund is released. So if they are not releasing the fund to farmers for their use and keeping it with them, it is the farmers that will still have to pay the interest for those days lost. They say they want to help the farmers but they only come and take advantage of them and then it’s just a vicious circle,” said a source.

“We have done town-hall meetings. All those are conditions precedent. Town-hall meetings, farmers’ verification, BVN verification, land verification and even factory inspection of the person who is off-taking to be sure that he/she even has a factory. What NIRSAL is doing is just a waste of time. It is the CBN that is the head of the project management. So whatever they are doing now and are not bringing CBN in just shows that they are doing what is not right because everything has been met. If they were not met, the CBN will not release the fund.

“These people have a cooperative structure already and it’s a self-governing organization. By now they should be applying pesticides and herbicide on the farm. The off-takers are also monitoring this project because there is a certain time that they are supposed to off-take. These big companies do planning for their procurement and if the maize does not get out at the time they had planned, they will have to buy in the open market, which damages their confidence about the cooperative,” the source added.

Maize is a food crop that takes 90 to 100 days to mature from the day of planting depending on the varieties and these should fall within the raining seasons. The farmers have completed their land clearing procedure early and are waiting for NIRSAL to lift its butt off the money.

Meanwhile, business a.m. also found out that the southwest region is not the only region suffering from this anomaly of NIRSAL as the case of withholding of a N1 billion intervention fund was recorded in Owerri, Imo State and another in Delta State. It appears an unwritten rule by which the system operates, which is absolutely counter-productive to development of the agriculture sector.

From the late turn of event, farmers are apprehensive that the withholding might linger and outpace remedy.

NIRSAL, an offshoot of CBN, meant to de-risk bank lending to agricultural projects, came on board during the tenure of Sanusi Lamido Sanusi as the CBN governor. Both Sanusi and Akinwumi Adesina (the current AfDB president) helped establish the NIRSAL shortly before the latter was appointed the minister of agriculture in Nigeria. NIRSAL was moved out of CBN, given a distinct status and got a chief executive officer to direct its affairs.


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