Nigeria's BoA Secures $1 Billion Fund to Empower Smallholder Farmers

News in Brief

• -Nigeria's Bank of Agriculture secured $1 billion fund through a partnership with the Afreximbank to empower smallholder farmers and boost productivity and food security.
• -This fund follows President Bola Tinubu’s launch of the National Food Security Fund and includes mechanisms to reduce credit risk and protect farmers from forex volatility.

The Bank of Agriculture (BOA) has secured a $1 billion intervention fund for transforming smallholder farming and enhancing the agricultural value chains in Nigeria.

The fund, officially tagged the National Smallholder Farmers Fund, was secured through a strategic partnership with the African Export-Import Bank (Afreximbank).  It is designed to address the systemic financial barriers that have long hindered smallholder farmers in Nigeria. 

The initiative follows President Bola Tinubu’s approval of the National Food Security Fund, a revolving matching fund developed with state governments to support agricultural development across the country.

Answer to smallholder farmers' needs

Smallholder farmers, who make up over 90% of Nigeria’s agricultural output, have always been underserved in terms of access to finance, mechanisation, 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.

According to the Managing Director and CEO of BOA, Ayo Sotinrin, the partnership with Afreximbank will help smallholder farmers transition from subsistence to sustainable and profitable agribusiness ventures. “This is more than just a fund; it is a bold commitment to ensuring our nation’s food security,” He said.

Backing up the BOA boss, Executive Vice President for Intra-Africa Trade and Export Development at Afreximbank, Mrs Kanayo Awani, stated that the partnership supports BOA in delivering greater impact on Nigeria’s food security goals and economic progress. She also acknowledged the critical role smallholder farmers play in Nigeria’s agro-industry sector.

Structure of the National Smallholder Farmers Fund

The collaboration includes two key mechanisms for funding efficiency and risk mitigation:

• Guarantee Framework: Afreximbank will provide loan guarantees to reduce credit risk, unlocking access to finance for smallholder farmers previously underserved.
• Currency Swap Arrangement: Dollar-denominated monies from Afreximbank will convert into local currency to allow BOA to lend directly in naira, protecting farmers from foreign exchange volatility.

This financial architecture facilitates access to international capital markets while shielding farmers from macroeconomic shocks.

Nigeria is now positioned to unleash the full potential of its agricultural sector, empower millions of rural farmers, and build a more resilient and inclusive economy through this unprecedented funding intervention.