FG to finalise Bank of Agriculture recapitalisation by Q1 2025

The Federal Government of Nigeria has announced plans to complete the recapitalization of the Bank of Agriculture (BOA) by the end of the first quarter of 2025. Speaking in Abuja, Abubakar Kyari, the Minister of Agriculture and Food Security, stated that the move aims to tackle long-standing funding challenges faced by smallholder farmers, a critical step toward enhancing commercial agriculture and reducing food inflation, currently estimated at 34%.

The National Council of Privatization (NCP), under the chairmanship of Vice-President Kashim Shettima, inaugurated a committee in 2024, led by Wale Edun, the Minister of Finance, to design modalities for reviving the BOA. The bank’s recapitalization is expected to provide smallholder farmers with expanded access to financing, a necessity as conventional commercial loans remain insufficient.

Minister Kyari highlighted the broader strategic goal of mitigating food insecurity through improved public financing and partnerships with commercial banks and international development organizations like the International Fund for Agricultural Development (IFAD). Notably, IFAD’s successful 2024 projects attracted an additional $32 million grant, underscoring the confidence in Nigeria’s agricultural potential.

The government is also leveraging advanced agricultural technologies to boost production. This includes the procurement of 2,000 tractors from Belarus—255 of which have already been delivered—and plans to incorporate drone technology for enhanced food production efficiency in 2025. Other initiatives include promoting wheat cultivation in Taraba State’s highlands and scaling up tomato farming in the South-East and South-West regions, with harvests expected by May.

Efforts to reduce post-harvest losses are gaining momentum, with investments in cold storage facilities and logistics improvements. These measures, along with the cultivation of an additional 400,000 hectares of farmland during the dry season and expanded fertilizer supplies, aim to strengthen Nigeria’s agricultural sector and combat rising living costs.
Source: Tribune

Expert Review for Agri-Food Stakeholders

The Federal Government’s recapitalization of the Bank of Agriculture (BOA) represents a cornerstone initiative with potentially transformative implications for Nigeria’s agribusiness sector. Below are additional insights into key aspects of the initiative and their potential impacts:

1. Strengthening Smallholder Farmers’ Productivity: Smallholder farmers account for over 70% of Nigeria’s agricultural output but remain undercapitalized. Recapitalizing the BOA provides an opportunity to:
   – Bridge Funding Gaps: Access to low-interest loans tailored to agricultural cycles can help farmers invest in quality inputs such as seeds, fertilizers, and irrigation systems.
   – Promote Mechanization: Financing will enable smallholders to adopt mechanized tools, significantly increasing productivity and reducing post-harvest losses.
   For stakeholders, this initiative opens pathways to collaborate with BOA to design innovative financial products tailored to specific value chains.
2. Food Inflation and Cost of Living: With food inflation currently at 34%, the recapitalization is positioned as a response to economic pressures. By enabling more robust food production through financing and technology, the government aims to: Stabilize Food Prices: Increased production reduces scarcity, which can directly ease inflationary pressures.-Enhance Domestic Supply Chains: Expanding cold storage and logistics reduces waste and ensures food availability across regions, minimizing price volatility.  Stakeholders, particularly in agribusiness supply chains, should assess how expanded financing could benefit their operations and reduce input costs.
3. Leveraging Technology for Agricultural Growth
   The government’s focus on modern technology, including drones, tractors, and improved fertilizers, aligns with global trends in precision agriculture. These technologies can:
   – Optimize Resource Use: Drones can help monitor crop health, while tractors enhance planting and harvesting efficiency.
   – Expand Land Cultivation: The plan to cultivate 400,000 hectares of farmland during the dry season signals significant market opportunities for agribusiness investors in equipment leasing, input supply, and extension services.
   Stakeholders should consider opportunities in technology deployment, such as partnerships for drone training or tractor financing schemes.
4. Addressing Post-Harvest Losses: Nigeria loses an estimated 40% of its agricultural produce due to poor post-harvest handling and storage. The government’s investments in cold storage and logistics can: – Improve Value Chain Efficiency: By preserving perishable produce, these facilities extend shelf life and enhance export opportunities.- Boost Farmer Incomes: Reduced losses mean higher returns for farmers, encouraging reinvestment in production.   Private sector actors in logistics, transportation, and cold chain solutions should explore public-private partnerships to scale these efforts.
5. Policy Continuity and Implementation Risks: While the recapitalisation of the BOA and related initiatives are promising, successful outcomes depend on:- Policy Continuity: Sustained commitment across successive governments is vital to realizing the intended impacts. – Efficient Execution: Delays in the release of funds, inadequate monitoring, or lack of farmer inclusion could undermine these efforts.  Stakeholders should advocate for transparent governance structures and actively engage in shaping policy execution to ensure alignment with industry needs.
6. Opportunities in Regional Crop Specialization: The focus on wheat cultivation in Taraba and tomato farming in the South-East and South-West presents opportunities for stakeholders to:

– Support Input Supply Chains: Demand for region-specific seeds, fertilizers, and pesticides will rise.
– Engage in Aggregation and Processing: Stakeholders can invest in regional processing hubs to add value to crops, enhancing profitability.

Conclusion
The BOA recapitalisation and accompanying initiatives are a bold attempt to address systemic challenges in Nigeria’s agribusiness sector. However, realizing these ambitious goals will require robust stakeholder collaboration, transparent implementation, and sustained policy support. Agribusiness actors should proactively position themselves to leverage emerging opportunities while holding policymakers accountable to ensure these plans deliver measurable benefits to Nigeria’s agri-food ecosystem.