China extends multi-billion dollar credit line in Nigerian agriculture deal

China extends multi-billion dollar credit line in Nigerian agriculture deal

The loan is expected to equip farmers with vehicles and irrigation systems and graders.

A few years ago, Nigeria was heavily reliant on importing rice from Thailand. In 2014, a shipment of 1.2 million tons of the food staple had been brought in. By 2015, Nigeria decreased its purchase order by 95 percent to 58,000 tons of rice from the Asian country. Today, the presidency says, Nigeria is on the path to providing almost 100 percent of its rice needs, from within its borders.

Government’s strategy to focus on its agricultural industry has seemingly paid off. Nigeria has now intensified its focus on this area with a loan from China, that is intended to upgrade the industry.

Officials have signed an agreement which will see a loan of USD 4.5 billion to boost local agriculture.

At a press briefing in April, Nigeria’s Minister of Agriculture Audu Ogbeh said China was willing to extend a credit line to the country for 20 years at a one percent per annum interest rate.

“We signed an agreement which engages all the states including FCT (Federal Capital Territory) from the Federal Ministry of Agriculture for the procurement of strategic machinery for rural development and agriculture; tractors, bulldozers, graders, irrigation pumps, tarsiers and so on from China.”

Zamfara State Governor Abdulaziz Yari, said the support of the Chinese would also come in the form of skills transfer.

“This government has said they will diversify the economy to agriculture and the only way that this can succeed is through agric mechanisation. The way that we are doing farming today, many young men and women are not going to farm because of the way it is being done. Meanwhile in other sister nations the agriculture is with machineries and equipment and we have been doing it for the past 60 years with hoe.”

In addition to agricultural progression, the Nigerian government says work on 14 solar power projects and railway upgrades promises to pull the country out of recession.

LEX African Nigerian member is Giwa-Osagie & Co.

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