American multinational investment bank and financial services corporation, Citibank has entered into a partnership with Lagos-based social enterprise Babban Gona, a business model that helps Nigerian farmers in Nigeria to become more profitable. Such partnership will increase lending to local smallholder farmers in a bid to boost agricultural output in Africa’s most populous country.
Babban Gona will administer a $10million Citigroup financing to about 41,000 small farmers in the West African nation, which it stated in an emailed statement. According to Babban Gona, such financing to small-hold farmers will enable them to improve income by 350% per hectare.
The organization since its establishment in 2012 has already extended nearly $200 million in loans to over 280,000 smallholder farmers. As regards the funding by Citibank, it forms a part of Citigroup’s $1trillion global commitment to sustainable financing by 2030.
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The Chief Executive Officer of Citibank Nigeria Ireti Ogbu disclosed that the bank will not hesitate to do more and partner with more organizations once its partnership project with Babban Gona is successful. She further disclosed that there is a pipeline of projects under consideration as Citigroup plans to use its worldwide network to help fintechs tap into the global financial market over the next few years.
Lately, I have been keeping tabs on the recent developments going on in the agricultural sector in Nigeria, and I must say that it has been a feeling of ecstasy, to see the funds and support the farmers in the sector have been receiving.
There have been efforts by the Nigerian government to make agriculture the mainstream of the Nigerian economy, meanwhile, there have been complaints from citizens that the government has refused to make the sector a priority which is why the sector has been underperforming.
On the other hand, to ensure that these farmers are able to access loans, the Central Bank Of Nigeria, CBN introduced the anchor borrowers program (ABP) in 2015, to achieve financial inclusion by helping farmers have easy access to credit loans.
Despite efforts from the Central Bank and the government, most farmers in Nigeria still lament the poor access to loans. Notwithstanding, it is interesting to note that some private firms and start-ups are beginning to step in to ensure that small-hold farmers have access to loans, without having to entirely depend on the government to do everything.
It is pertinent to note that the Agricultural sector in underdeveloped and developing countries in Africa, such as Nigeria, is a sustainable economic development of the agricultural sector. With proper access to loans to these small-hold farmers in Nigeria, it will no doubt improve the production output in the sector, because these farmers will be faced with little or no constraint, which will also ensure proper food security in the country.
Looking at the effect of the Russian-Ukraine war that has caused most countries in Africa to witness severe hunger and famine, due to the blockage of food supplies to these regions caused by the war, it should be a warning signal to Nigeria to improve its agricultural sector.
Smallholder farmers in Nigeria must get access to adequate loans to ensure that the country never witnesses famine or severe hunger. Once the agricultural sector in the country blossoms, it can also improve the country’s economy by boosting its revenue through the exportation of food products.