In spite of wide-reaching challenges caused by the Covid-19 pandemic, 2020 has been a busy and fruitful year for the Nigeria Incentive Based Risk Sharing System of Agricultural Lending (NIRSAL).
NIRSAL is a CBN-owned intervention agency whose main role is to encourage financial institutions to lend to agribusinesses.
NIRSAL promotes investment in agriculture through various measures including de-risking lending, fixing agricultural value chains, innovative insurance products, capacity-building, among others.
A major pillars of Nigeria agribusiness, NIRSAL worked hard to sustain its momentum from previous years all through 2020.
The agency started the year on a very positive note. In February, NIRSAL MD and CEO Aliyu Abdulhameed announced that NIRSAL had boosted its seed fund to nearly N130 billion from the N75 billion it received from CBN at inception in 2013.
The seed fund which was a debenture loan from the CBN had grown by 20 percent through investment in government treasury instruments over the years. This growth is a positive development which underscores the prudent and rigorous way that the organization is being run by the Abdulhameed-led management.
The agency also in February announced a partnership with software giant, Microsoft. NIRSAL made it known that it had begun deploying the Microsoft Azure FarmBeats, an innovative tool that helps to analyse data being produced from farms.
The tool which runs on artificial intelligence analyses complex information about weather conditions, temperature, soil moisture, crop layout and so much more in real-time in order to improve decision-making and optimise agricultural output.
In line with NIRSAL’s mandate, the Microsoft Azure FarmBeats helps to reduce the risks to investors and attract more funding. The partnership with Microsoft is one of many examples of NIRSAL’s commitment to promoting precision agriculture.
As a testament to its positive contributions to agribusiness, NIRSAL received strong commendations within the first quarter of the year. During an engagement with NIRSAL’s management to clarify and share ideas on the organization’s mandate, track record and accomplishments, the House of Representatives’ Public Accounts Committee applauded the CBN’s agribusiness transformation, being implemented through NIRSAL.
NIRSAL continued its innovative streak with the launch of a new insurance product that protects farmers from losses caused by a wide range of factors including low or high rainfall, pest or disease outbreaks, fire incidents, disability or death of farmers, among others. The product called Hybrid Multi-Peril Crop Indemnity-Index Insurance or HM-II was created in collaboration with Royal Exchange General Insurance Company. HM-II builds on earlier insurance interventions such as the NIRSAL Comprehensive Index Insurance (NCII) which was launched in 2018 as an improvement on an earlier insurance product. The development of HM-II aligns with NIRSAL’s plan to increase distribution of agric-insurance to 3.6 million farmers by 2026. The agency has already reached about 1,476,289 farmers.
During the year, NIRSAL also made progress in the roll out of its Agrogeocooperatives project. This is a model based on a unique system that groups adjoining farmlands in geographical areas that are suited for specific commodities. It ensures all segments of agricultural value chains are linked to structured markets. Through AgrogeoCooperatives, NIRSAL is able to create strategic trade linkages between farmers and off-takers of farm produce. It also provides stakeholders with an ecosystem for inputs, mechanisation, research technologies, value-added processing, logistics, and of course finance.
Introduced in 2019, AgrogeoCooperatives is a major improvement on smallholder farming which is typically done on small, unconnected parcels of land. The response of farmers, agricultural cooperatives and other stakeholders to AgrogeoCooperatives has been enthusiastic and very promising results are assured from the novel scheme.
Already, NIRSAL has piloted the successful structuring, training and facilitation of finance from Keystone Bank for 430 youths for the cultivation of sesame on 430 hectares of land in Doma, Nasarawa State. To show his satisfaction with the pilot in Doma, Governor Abdullahi Sule of Nasarawa State has pledged to support the implementation of the project across the state.
Currently, registration of small-holder farmers, farmer leaders and aggregators into AgrogeoCooperatives is continuing nationwide.
NIRSAL’s target is to create 16,000 AgroGeoCooperatives on four million hectares of land. Also, the agency plans to enrol eight million farmers who will be expected to produce about 12 million metric tonnes of grain product equivalent (GPE) over the medium to long term.
Also in 2020, NIRSAL continued its role as an active Participating Financial Institution in the CBN’s Anchor Borrower’s Program (APB). APB focuses on provision of farm inputs in kind and cash to small holder farmers to boost production of commodities, stabilize supply of inputs, among other things.
NIRSAL’s consistent strides in agribusiness are truly commendable and deserving of the support of Nigerians.
Nantim M Joseph is a public policy analyst.