The Bank of Agriculture (BOA) has obtained a $1 billion intervention fund to transform smallholder farming and strengthen Nigeria’s agricultural value chain, from production to market access. This landmark funding, secured through a partnership with the African Export-Import Bank (Afreximbank), aligns with President Bola Tinubu’s approval of the National Food Security Fund, a revolving matching fund developed with state governments to drive food security and economic growth.
National Smallholder Farmers Fund
Named the National Smallholder Farmers Fund, the initiative targets financial barriers faced by smallholder farmers, who account for over 90% of Nigeria’s agricultural output but lack access to affordable credit, modern technology, and reliable markets. The fund will provide low-cost loans for inputs, mechanization, and structured market linkages, enabling farmers to scale operations, boost productivity, and integrate into national and continental supply chains.
Commitment to Food Security
“This fund is a transformative step toward achieving food security and sustainable agribusiness,” said Ayo Sotinrin, BOA’s Managing Director and CEO. “Our partnership with Afreximbank empowers smallholder farmers to shift from subsistence to profitable farming.”
Mrs. Kanayo Awani, Afreximbank’s Executive Vice President for Intra-Africa Trade and Export Development, highlighted the partnership’s significance: “Smallholder farmers are vital to the agricultural value chain and agro-industry growth. By supporting BOA, Afreximbank is advancing Nigeria’s food security and economic development goals.”
Key Mechanisms
The fund’s effectiveness is underpinned by two innovative mechanisms:
1. Guarantee Framework: Afreximbank will provide loan guarantees to BOA, reducing credit risk and expanding financing for underserved farmers.
2. Currency Swap Arrangement: Dollar-based funding will be converted into local currency, protecting farmers from exchange rate fluctuations while enabling BOA to lend directly.
This strategic intervention positions Nigeria to unlock its agricultural potential, empower rural farmers, and foster a resilient, inclusive economy.
