Bank of Agriculture secures $1 billion to boost smallholder farming in Nigeria

The Bank of Agriculture (BOA) has secured a $1 billion intervention fund aimed at transforming the fortunes of smallholder farmers and enhancing the entire agricultural value chain from primary production to market access.

The fund was secured through a strategic partnership with the African Export-Import Bank (Afreximbank), marking a significant step toward achieving national food security and inclusive economic growth.

This initiative follows the approval by President Bola Tinubu for the establishment of the National Food Security Fund; a revolving matching fund designed in collaboration with state governments.

The National Smallholder Farmers Fund 

The fund, officially named the National Smallholder Farmers Fund, is tailored to address the systemic financial barriers that have long hindered smallholder farmers in Nigeria. It will provide affordable credit for critical inputs, mechanisation, and structured market linkages.

Smallholder farmers contribute over 90% of Nigeria’s agricultural output, yet they remain underserved in terms of access to finance, modern technology, and reliable markets.

The newly secured fund seeks to close these gaps by equipping farmers with the tools and capital needed to scale their operations, improve productivity, and integrate more effectively into both national and continental supply chains.

Commitment to Ensuring Food Security 

“This is more than just a fund; it is a bold commitment to ensuring our nation’s food security,” said Ayo Sotinrin, Managing Director and CEO of BOA. “By joining forces with Afreximbank, we are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.” 

Mrs. Kanayo Awani, Executive Vice President for Intra-Africa Trade and Export Development at Afreximbank, echoed the sentiment, emphasizing the strategic importance of the partnership.

“Smallholder farmers are an essential part of the agricultural value chain and represent important contributors to the growth of the agro-industry sector,” she said. “By partnering with BOA to support the National Smallholder Farmers Fund, Afreximbank is supporting BOA to deliver greater impact in Nigeria’s quest for food security and economic development.” 

Key Mechanisms 

The collaboration agreement outlines two key mechanisms to ensure the fund’s effectiveness:

• Guarantee Framework: Afreximbank will provide guarantees for loans disbursed by BOA, reducing credit risk and expanding access to finance for previously underserved farmers.
• Currency Swap Arrangement: Dollar-denominated funding from Afreximbank will be efficiently converted into local currency, enabling BOA to lend directly to farmers while shielding them from exchange rate volatility.

This financial architecture not only facilitates access to international capital markets but also ensures that smallholder farmers are protected from macroeconomic shocks that could undermine their progress.

With this intervention, Nigeria is poised to unlock the full potential of its agricultural sector, empower millions of rural farmers, and build a more resilient and inclusive economy.

Bank of Agriculture secures $1 billion to boost smallholder farming in Nigeria - Nairametrics