The Central Bank of Nigeria (CBN) has on Tuesday issued non-interest guidelines for the Accelerated Agricultural Development Scheme (AADS) – a Federal Government agricultural project.
AADS seeks to engage a minimum of 370,000 youths in agricultural production across the federation, over the next three years.
The programme is expected to reduce the rate of unemployment among youths, increase agricultural production towards food security, job creation, and economic diversification.
According to the CBN, the scheme will engage Nigerian youths between the ages of 18 to 35 years.
The apex bank, in its circular, stated that it will provide short and medium-term funding windows for the implementation of the Scheme.
On the operational framework of the project, state governments are to mobilize prospective young farmers with representation from all Senatorial Zones.
The scheme, the CBN informed, will focus on two crops where states have a comparative advantage.
State governments/FCT will provide agricultural land in contiguous locations in all senatorial Zones; with two to five hectares of land per beneficiary.
The CBN added that state governments will provide access roads, water sources, and other infrastructure that will enhance agricultural production on lands.
On financing, the memo stated that the Participating Financial Institutions (PFIs) will act as agents of the CBN in disbursing the finance to the beneficiaries, in kind.
“PFIs shall purchase the inputs for on-selling to the beneficiaries, using CBN approved non-interest financing contract of Murabaha, Istisna’, etc at an all-inclusive rate of return of 9% p.a”
“For the financing of labour, the PFI shall use Service Ijarah or any other appropriate CBN approved contract for NIFIs with the same all-inclusive rate of return of 9%
“Financing tenor is 6 months for grains and broiler production (rice, maize, soybean etc); 18 months for cassava; 24 months for egg production and ruminants; 5 years for plantation crops, etc
“Average financing size of N250,000 per ha for arable crops; N500,000 per unit for livestock; and N1.5 million naira for plantation crops like cocoa, cashew, and oil palm,” CBN’s statement read in part.
The FG will provide strategic direction for the implementation of the Scheme through the Presidential Task Force and enhance inter-agency collaboration to provide resource optimization and synergy.
CBN, on its part, will provide funds for the programme and issue and review modalities and operating guidelines from time to time.
The apex further outlined various guidelines for input suppliers/service providers, anchors/processors as well as beneficiaries.