FNS2019: NIRSAL advocates smart agric financing using the M2M model

Given the enormous potentials embedded in the agricultural sector and the need to create opportunities beyond an oil-dependent economy where agriculture stands out, the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) has proposed a smart agricultural value chain financing system based on its Mapping-to-Markets (M2M) strategy.

On NIRSAL’s part, it is determined in its bid to stimulate the flow of finance and investments into agric value chains by de-risking agriculture and facilitating agribusiness. The M2M strategy seeks to reduce risk and make operations in commodity value chains more efficient by optimizing primary production in a closed financial delivery loop.

Managing Director of NIRSAL, Mr. Aliyu Abdulhameed made this evaluation at the ongoing 2019 Feed Nigeria Summit (FNS 2019) themed “Unlocking Prosperity through Partnership”. The two-day event organized by AgroNigeria, is taking centerstage at the Ladi Kwali Conference Center, Sheraton Hotel, Abuja.

The presentation themed “A New Agricultural Growth Paradigm through Smart Value Chain Financing in Nigeria – The Unfolding Opportunities”, glanced through the specifics of agricultural financing and the need to harness agribusiness opportunities through structured value chain financing.

According to the MD, for the agric sector to thrive it requires; Finance Capital -Patient capital to power an agricultural revolution; Technology Capital – Scientific and technological solutions for increased productivity; Equipment Capital – High-end equipment for mechanisation and commercialisation; Human Capital – Intellectual and technical capacity for agribusiness.

While there have been several continental and national pacts, such as the ‘African Union’s 2014 Malabo Declaration on Accelerated Agricultural Growth and Transformation for Shared Prosperity and Improved Livelihoods’, as well as NIRSAL’s Risk Sharing Facilities (RSFs), put in place to salvage the situation of agricultural financing, the MD notes that the rate of financing to agriculture is still low, relative to other sectors.

In spite of these hitches, Mr Abdulhameed however indicated that the agricultural sector remains one of Nigeria’s greatest hopes for economic growth and development. He stated that agribusiness growth prospects create the impetus for the spring up and expansion of agribusinesses across agricultural value chains, while also adding that some of these agribusinesses can generate up to 200% Returns on Investment.

In his words, “NIRSAL is focused on the upgrade, development and integration of end-to-end agricultural value chains”. It is against this backdrop that the organization has developed the Mapping-to-Markets (M2M) concept, that focuses on transforming the Upstream segment, referred to as the ‘black hole’ in the value chain into the gold mine that drives the development of all the other segments.

Based on extensive research and analysis, NIRSAL has also identified a 5-4-3-2-1+ commodities with high market demand, that will be supported (in the medium term) under NIRSAL’s value chain integration approach.

These commodities stemming from the organization’s ‘Commodity Focus by Ecological Advantage’, include; Integrated livestock commodities; Controlled environment agriculture commodities; Consumer commodities; Export commodities; Industrial commodities; and Value added commodities such as sugarcane and cashew.

As a long standing partner of the Feed Nigeria Summit, NIRSAL has since inception played his crucial role in Risk Sharing Fund by providing sustainable value for financiers and investors, while also extending financial and technical support to small holder farmers across Nigeria.

For the first time in the history of the Feed Nigeria Summit, the ongoing 2019 edition will feature a “Mezzanine Deal Brokerage Room” wholly dedicated to forging project partnerships for Farmer Associations and Cooperatives that require wholesale delivery of solutions – whether on-farm, farm-gate or market related.


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