The Green Imperative Project: Nigeria signs a new agreement with Brazil

The Federal Government has signed a fresh $1.2 billion Memorandum of Understanding (MOU) with the Development Bank of Brazil for agriculture modernization in Nigeria.

According to a report by the Guardian, the Nigerian government intends to improve agriculture mechanization and set up modern agro centers across the country with the credit facility.

The Senior Special Assistant to President Muhammadu Buhari on Agriculture, Dr. Andrew Kwasari addressed newsmen in Abuja on the loan agreement.

Nature of loan

The loan is a bilateral agreement between Nigeria and the Brazilian Government, and would be guaranteed by the Islamic Development Bank and Islamic Corporation of Insurance for Export Credit.

The credit facility is called “the Green Imperative Project “(GIP) and would last a period of 15 years

The credit facility is needed by the FG to tackle the two key areas lacking in the Nigerian Agric sector. Agricultural modernization and agro-processing.

The credit facility is expected to inject a $1.2bn foreign direct investment at a 3% interest rate over a 15-year period giving.

Credit Facility: A credit facility is a type of loan made in a business or corporate finance context. It allows the borrowing business to take out money over an extended period of time rather than reapplying for a loan each time it needs money.

In effect, a credit facility lets a company take out an umbrella loan for generating capital over an extended period of time.

 Mr Mohammed said the loan will be used for

1. To “revolutionise agriculture in Nigeria through a programme titled “The Green Imperative.”
2. He said the programme is worth $1.2 billion and will be implemented over a period of five to 10 years.
3. The minister said funding for the programme will come from the Development Bank of Brazil and Deutsche Bank, with insurance provided by Brazilian Guarantees and Fund Managements Agency and the Islamic Corporation for Insurance of Export Credit of the Islamic Development Bank, and coordinated by Getúlio Vargas Foundation.
4. He said that the programme will import the completely knocked down parts of about 5,000 tractors and numerous implements (for local assembly) annually for a period of 10 years.
5. It will see the establishment of 142 agro processing service centres for value addition, with one centre in each senatorial district.

6. There will also be the establishment of 632 mechanisation service centres to support primary production in the 774 local government areas and the Federal Capital Territory. This will create 774 service centres nationwide to mechanise farming methods and process or add value to farm produce locally, leading to efficiency and eliminating post-harvest losses, thereby cutting down cost of food all year round, according to the Minister.

7. Mr Mohammed claimed this will create about 5 million jobs and inject over $10 billion into the economy within 10 years.

8. He said the programme will create a “sustainable supply chain of agricultural raw materials for our large manufacturing companies to source locally, thereby saving billions of US dollars in food-related forex as well as training of about 100,000 extension workers within 3 years.”

9. He said this will impact over 35 million persons nutritionally and economically.

10. There will also be revitalisation of Nigeria’s research and extension service delivery through a five-year technology-package transfer component.

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