As CBN Ramps Up Anchor Borrowers’ Programme

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The aggressive intervention in the agriculture sector through the Anchor Borrowers’ Programme will help improve activities in the non-oil sector of the economy, writes Obinna Chima

The bumper harvest recorded recently by maize, sorghum, cassava, tomatoes and cotton farmers under the Central Bank of Nigeria’s (CBN) Anchor Borrowers’ Programme (ABP) has given the agricultural initiative a major boost.

According to the structure of the ABP, a farmer who wants to repay his loan can either do so with cash or give the central bank his produce of same value, after which officials of the Bank’s Development Finance Department would sell and recover the loan.

“So, the cultivation of the last rainy season that is being harvested now was very successful and a bumper one. It is the biggest and most successful we have had. So, it has impacted positively on the ABP and is making it easy for farmers to repay their loan.

“Now, the CBN has rice, maize, poultry, sorghum, cassava, tomatoes and cotton under the Anchor Borrowers’ Programme. This is our first year of doing cotton and the output has been phenomenal.

“That is all over the country. So, 2019 was a very successful year for agric and we are going to continue to intensify our efforts to make sure that people patronise these locally produced goods so as to save forex. “We would further intensify our efforts to stop smuggling and the border protection process that is currently on. This is also going to support the CBN fight against inflation,” a top CBN official who pleaded to remain anonymous told THISDAY.

The ABP was designed to assist small-scale farmers to increase the production and supply of feedstock to agro-processors with the aim of creating an ecosystem to link out-growers (smallholders) to local processors.

The programme is also expected to increase banks’ financing to the agricultural sector, enhance capacity utilisation of agricultural firms involved in the production of identified commodities as well as the productivity and incomes of farmers.

The anchor borrowers’ programme is also a platform to build capacity of banks in agricultural lending to farmers and entrepreneurs in the value chain, by reducing commodity importation.

It is said to have helped in reducing poverty among smallholders, while assisting rural subsistent farmers to reach commercial production levels.

After the rice boom that has seen many homes ditching expensive imported rice for home grown local rice consequently saving the country huge foreign exchange, the President Muhammadu Buhari administration’s quest to diversify the economy, the CBN recently commenced efforts to revive commercial production of tomato and textile in the country, in a remarkable lift to the economy.

CBN Governor, Mr. Godwin Emefiele, recently said the Bank would sustain its intervention in the agriculture sector through its development finance mandate, in order to help catalyse growth in critical sectors of the economy such as agriculture and the manufacturing Sectors. 

The CBN governor explained that through programmes such as the ABP, the Commercial Agriculture Credit Scheme and the Bankers Committee Agri-Business/Small and Medium Enterprises Investment Scheme (AGSMEIS), the apex bank has improved access to markets for farmers by facilitating greater partnership with agro-processors and manufacturing firms in the sourcing of raw materials.

“As a result, manufacturers have integrated local options in sourcing their raw materials. Partnerships forged through contracts between farmer cooperatives and agro-processors have also helped to support improved production of agricultural commodities such as rice, cotton and maize.

“In order to address some of the challenges faced by local farmers and manufacturers, we embarked on measures to discourage smuggling and dumping of restricted items into the country, by imposing restrictions on the use of financial institutions in Nigeria by identified smugglers, as their activities undermined the growth of our local industries. 

“These measures are aiding our efforts to support local cultivation in rice, cotton and fish, etc,” he disclosed.

Furthermore, he pointed out that at some point in Nigeria’s history, the economy was heavily reliant on agriculture, with increased cultivation and exports of primary products such as cocoa, palm oil, cotton and groundnut.

He, therefore, urged the country, in view of current challenges in oil market to return to the era, when the growth of agricultural and manufacturing sectors were used to bring about growth and employment.

Emefiele, also said the ABP, particularly in the areas of tomato and cotton farming, had yielded positive outcomes for the growth of the economy. 

Emefiele believes the Bank’s on-going interventions, especially in agriculture, would, “help to boost not only our domestic outputs but also improve our annual non-oil exports receipts from $2 billion in 2018 to $12 billion by 2023.”

Speaking recently at the ground-breaking ceremony of Tomato Jos Farming and Processing Limited in Kaduna, Emefiele noted that the strategy adopted by the apex bank was largely hinged on the twin approaches of out-grower contractual arrangement in the short to medium term, and backward integration in the medium to long term.

According to him, the commodity champion model introduced in the first quarter of 2019, to stimulate production of tomato and strengthen the end-to-end linkages in the value chain from input supplies to the final consumer, had begun to yield results with the mobilisation and validation of about 140,848 farmers from various tomato farmers associations across 25 states of the federation.

Noting that tomato represented an important commodity, being one of the main ingredients in hundreds of Nigerian and international dishes as well as the beverage and pharmaceutical industries, he said its annual production in the country was estimated at 1.701 million tonnes while annual consumption stood at 2.93 million tonnes. 

This leaves an annual supply shortfall of over 1.2 million tonnes valued at $2.5 billion annually, which is met through importation and smuggling.

The CBN governor said the Tomato Jos plant, was, “one of the key projects we are supporting in the tomato value chain.”

He commended the administration of Mallam Nasiru El-Rufai, whose dedication to the industrialisation of the state led to the creation of an environment that enabled Tomato Jos to be a reality.

He said CBN’s intervention in local tomato production and processing had become more critical given that tomato was among the commodities that played an important role in the demand for foreign exchange.

Also, the CBN last year it inaugurated a separate tomato processing plant, Gino Tomato, in Kaduna. The company rented about 100 hectares, with about 30 hectares mapped out as farm area, 16 hectares of which had been cultivated.
The various interventions support CBN’s vision of the country becoming self-sufficient in tomato production, ultimately boosting the current administration’s diversification programme through agriculture.

As part of the textile revival drive, Emefiele had last year expressed his desire to have the service chiefs and chief executives of uniformed services support on-going initiatives by the apex bank at reviving the Cotton, Textile and Garment (CTG) industry, through their patronage of locally manufactured cloths. He disclosed that the CBN had gotten the mandate of the President to ensure that all uniformed services and medical facilities sourced their fabrics locally from the Nigerian CTG sector.

He added that through the enforcement of Executive Order 003 in support of local content in procurement by Ministries, Departments, and Agencies (MDAs), Buhari had directed full compliance with this Order as it will help in addressing the pressure on foreign reserves through demands for forex for the importation of textile and clothing materials.

In October 2019, the CBN’s journey towards resuscitation of the country’s ailing CTG industry reached a climax with the signing of two critical Memoranda of Understanding (MoUs) involving critical stakeholders in the entire value chain. 

The first of MoU, between the National Cotton Association of Nigeria (NACOTAN) and ginning companies, sought to guarantee steady off-take and processing of cotton lint and cotton seeds, while the agreement between the Nigerian Textile Manufacturers Association and the armed forces, police, paramilitary Institutions and the National Youth Service Corps (NYSC) was to facilitate long-term contracts (five years or more) with textile and garment companies to manufacture uniforms in the country for use by various arms of Nigeria’s uniformed services.

Ogun State Governor, Mr. Dapo Abiodun, recently described the ABP, as a veritable scheme for fighting unemployment and ensuring food security in Nigeria.

Abiodun, said Ogun had already keyed into the initiative with anchors in rice, maize and cassava production.

“We have latched on to the Anchor Borrowers’ Programme, which is basically a programme that requires that you identify an anchor, who would be the processor of off-taker and then you line up your unemployed youths, who want to be agri-prenuers,” Abiodun stated.

According to him, Ogun State selected the first 10,000 persons in its job portal to benefit from the programme by allocating to them a hectare of land each.

Explaining further, the governor stated that, “And this anchor, who happens to be somebody processing cassava and requires 200 tonnes of cassava daily, has committed to an off-take price, the CBN has provided us with funding to clear the land, the anchor and the CBN are providing us the seedlings to plant. 

“We are going to provide the extension service, the CBN would pay them stipends until harvest and we intend to scale this up over the next five months to about 50,00 people. 

“So, it affords us the opportunity to build capacity to employ our people and also achieve food security. Consequently, we are believing that with this, we would see a reduction in criminal tendency,” he added.