FG Approves $1.2bn Loan For Agric Mechanisation

The Federal Executive Council on Wednesday approved a loan facility of $1.2 billion to finance the mechanisation of agriculture in the country.

Sabo Nanono, the Minister of Agriculture and Rural Development, disclosed this on Wednesday while briefing State House correspondents after the virtual FEC meeting anchored from the Council Chamber of the Presidential Villa, Abuja.

The virtual meeting was presided by President Muhammadu Buhari.

The online FEC was in line with Nigeria Centre for Disease Control (NCDC) protocol on physical distancing as Nigeria strives to contain the spread of the COVID-19 pandemic.

Nanono did not provide details of the loan including its source and conditions. However, the finance minister and the debt management office had earlier said Nigeria would utilise more internal borrowings, rather than external borrowings, due to the impact of COVID-19 on the global economy.

On Wednesday, Mr Nanono said that the planned mechanisation of agriculture would span 632 local governments.

“Today, we presented a joint memo with the Federal Ministry of Finance in which we seek the approval for a loan facility of about 950 million Euros translated probably to 1.2 billion dollars.

“This loan is for the purpose of agricultural mechanisation in this country –that will cover about 632 local governments plus 140 processing plants.

“This is going to be a major revolution in the agriculture sector, that we have never seen before,’’ he said.

On his part, the Minister of Transportation, Rotimi Amaechi, said that the council approved a memo for award of contract in the sum N683 million for the purchase of 19 vehicles for Nigeria Ports Authority, NPA.

“This is the first time in four years that NPA is buying any vehicle and that is why the council said fine. These are operational vehicles; they are not for management staff; they are all Toyota vehicles,’’ he said.

More so, the Minister of Power, Sale Mamman, said the ministry sought approval for the revised estimated total cost for the augmentation of the subsisting contract in the sum N47.2 million.

He said that the contract was for the provision of additional critical power grid infrastructure for the full evacuation and utilisation of 40mw currently from Kashimbila via Takum-Wukari and Yendev.

“This is to evacuate completely 40 megawatts to the National Grid. If it is not evacuated, Nigerian government will lose not less than 130 megawatts of power which is equivalent to almost nine million in a year,’’ he said.

Contributing, Information Minister Lai Mohammed said that the critical power evacuation served not just Taraba and Benue but the entire North East.

“Power is something that you cannot store and once it is stranded, it poses a lot of risk. It is better for us to get this additional funds so that we evacuate it and then of course, 40 megawatts power will do a lot to improve the lives of many Nigerians,’’ he said.

Meanwhile, the minister of Agriculture’s office Wednesday evening released the details of the agriculture projects as stated in his speech after the FEC meeting.

“The key to mechanization is the establishment of 632 tractor serving centers across the country. These serving centres will constitute tractor hiring skill, IT and admin office and a chemical workshop and store for storing inputs for agriculture and even output arising from the agricultural sector,” the minister was quoted as saying.

The minister said every tractor will have a tracking system that will enhance seamless identification of the area it has covered and how much revenue it is generating.

He said these serving centres are going to be privately owned by the indigenes of the local government areas where they are sited.

“It is going to be a competitive bid that will involve selection in terms of your experience in agriculture, your finance position, your investment of between N10 to N70 million. Because you may probably be handed an asset of over N150 million, so we will not take that chance,” he said, adding that the loan will be generated by these service centres which will also be in charge of repayment of the loans.

Nanono said, “We have made our calculation and we have come to the conclusion that if your tractor works for between N65,000 to N75,000 per day, if you know the operational cost of about N30,000 to N35,000 you will have a net profit of about N40,000.”

The minister said it will take a period of three to four years for beneficiaries to conclude payment of the loans, after which the N150 million worth assets becomes their personal property.

“You have to understand that this country in terms of agricultural mechanization is at the lowest level,” he said.

Nanono said Nigeria only has about seven tractors per 100 square kilometers as against 27 tractors owned by Kenya to cover similar kilometres of farm land.

“In fact the standard is 127 tractors per 100 square kilometers. In most developed countries it is about 1000 tractors per 100 square kilometers.

“If we are going to move agriculture forward in this country, we must have to do it because if oil does not become water, it is absolutely necessary for us to mechanise. We have estimated 84 to 92 million hectares of land, we are only cultivating about 34 hectares even that is not done at optimum level, because of lack of mechanization,” he said

“We anticipate direct jobs from this in the region of seven million, indirect will be in the region of 20 million and so on. So that is the essence of this. There will be 140 agro processing plants attached to these service centres across the 36 states of the federation,” he said.