The Bank of Agriculture (BOA) has signed a deal with African Export-Import Bank (Afreximbank) to mobilise up to $1 billion for direct financial support for smallholder farmers and the entire agricultural value chain, from primary production to market, in Nigeria.
The partnership follows the approval granted by President Bola Ahmed Tinubu, for the establishment of a National Food Security Fund, which will be a revolving matching fund in partnership with State Governments, called “The National Smallholder Farmers Fund.”
The fund is deigned to close the systematic financial gap faced by Nigeria’s smallholder farmers by providing access to affordable credit for critical inputs, mechanisation, and structured market linkages.
By equipping farmers with access to capital and mechanisation equipment, the fund will enable increased productivity, value addition trough processing, and stronger integration to national and continental markets.
Nigeria’s smallholder farmers are responsible for over 90% of the nation’s agricultural output, yet struggle with inadequate access to finance, poor adoption of improved technologies and fragmented market access.
The Collaboration Agreement establishes a framework for exploring:
(i) Guarantee mechanisms whereby Afreximbank would provide guarantees for loans disbursed by BOA, thus reducing credit risk and extending financing access to previously underserved smallholder farmers; and
(ii) Currency swap arrangements to enable dollar denominated funding from Afreximbank to be efficiently converted to local currency for on-ward lending to the farmers by BOA. By implementing this mechanism, the partnership will facilitate easier access to international capital markets, while shielding smallholder farmers from the risks associated with exchange rate fluctuations.
The Bank of Agriculture (BOA), was represented by its Managing Director/Chief Executive Officer, Mr. Ayo Sotinrin, while the African Export-Import Bank (Afreximbank), was represented by the Executive Vice President for Intra-African Trade and Export Development, Mrs. Kanayo Awani.
The agreement was finalised during the recently concluded and highly successful Intra-African Trade Fair (IATF) 2025 in Algiers, Algeria.
Speaking at the signing, Mr. Ayo Sotinrin noted that the deal is a strategic intervention designed to secure Nigeria’s agricultural future.
“This is more than just a fund; it is a bold commitment to ensuring our nation’s food security,” he said. “By joining forces with Afreximbank, we are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.”
Commenting on the deal, Mrs. Kanayo Awani, Executive Vice President, Intra-Africa Trade and Export Development at Afreximbank, said:
“Smallholder farmers are an essential part of the agricultural value chain and represent important contributors to the growth of the agro-industry sector. 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. The Fund will provide critical liquidity and assuage the hardship faced by the smallholder farmers by extending crucial financing access to the previously underserved group.”
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