NIRSAL: Without Risk Controls, Agric Won’t Be Safe for Investment

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James Emejo in Abuja
The Managing Director/Chief Executive, Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) Plc, Mr. Aliyu Abdulhameed, has said though the agricultural sector requires massive financing, equipment, technology, and intellectual capital to enhance its growth, it remains, “too risky” without fixed, de-risked and integrated agricultural value chain with efficient and controlled route-to-market for commodities.

He said the scenario explains why post-harvest losses of about 50 per cent occur on some agricultural commodities, leading to significant loss of economic value.

Abdulhameed, in a presentation stated that though the country is blessed with abundant opportunities in land, labour, water and markets, it still remains, “food insecure” with about N1.5 trillion average annual food import bill and 94.6 million poor and malnourished people.
Nonetheless, he said agriculture currently accounts for 25 per cent of the country’s GDP which was even as high as 42 per cent prior to 2014.

He said: “Inefficiencies inherent across agricultural commodity value chains make the sector highly unattractive for investment and the sector’s potentials highly under-maximised in Nigeria.”

But he said the planned implementation of the Secured Agricultural Commodity Transport and Storage Corridor (SATS-C) which is an initiative of the agency will combat post-harvest losses, create jobs and boost the contribution of the agriculture sector to Gross Domestic Product (GDP).

He said when fully operational, the SATS-C policy could directly lead to a five per cent increase in the agriculture sector’s contribution to GDP by halving annual post-harvest losses of $12 billion.

He added that the initiative will also complement and perfect one of NIRSAL’s business models/concepts known as PH-P3 (Primary Production & Harvest, Primary Processing, Primary Transportation and Primary Storage) which ensures efficient production in the farms and optimum capture of value at harvest by enabling prompt evacuation of produce from farm-gates, and the subsequent haulage of commodities across the country through designated corridors.

First introduced in December 2018, the policy essentially aims to fix key constraints confronting the transportation of agricultural produce and products across the country, working with both private and public sector stakeholders.

He said SATS-C envisaged enabling of seamless movement of produce from production zones, to processing zones to markets, which would invariably upgrade agro-logistic value chains, flush blockages and usher in an era of increased flow of finance and investments into and through agricultural value chains.

“For this reason, NIRSAL is reaching out to enabler institutions, driving necessary dialogues and championing advocacy to support the FMITI in the development and implementation of the SATS-C policy in Nigeria,” he said.