The Bank of Agriculture (BOA) has secured a US$1 billion intervention fund aimed at transforming the wealth of smallholder farmers and enhancing the entire agricultural value chain from primary production to market access.
The fund was secured through a strategic partnership with the African Export-Import Bank (Afreximbank), marking a significant step toward achieving national food security and inclusive economic growth.
The initiative follows the approval by President Bola Tinubu for the establishment of the National Food Security Fund, a revolving matching fund designed in collaboration with state governments.
The fund, officially named the National Smallholder Farmers Fund, is tailored to address systemic financial barriers that have long hindered smallholder farmers in Nigeria, as it would provide affordable credit for critical inputs, mechanisation, and structured market linkages.
Smallholder farmers contribute over 90% of Nigeria’s agricultural output, yet they remain underserved in terms of access to finance, modern technology, and reliable markets.
The newly-secured fund seeks to close the 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.
The Managing Director and Chief Executive Officer of BOA, Ayo Sotinrin stated that this is more than just a fund, saying it is a bold commitment to ensuring the nation’s food security, noting that by joining forces with Afreximbank, they are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.
Mrs. Kanayo Awani, The Executive Vice President for Intra-Africa Trade and Export Development at Afreximbank, Mrs. Kanayo Awani, lauded the sentiment, emphasising the strategic importance of the partnership, noting that 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”, she said.
The collaboration agreement outlines two key mechanisms to ensure the fund’s effectiveness, which includes Guarantee Framework, as Afreximbank would provide guarantees for loans disbursed by BOA, reducing credit risk and expanding access to finance for previously underserved farmers and Currency Swap Arrangement, dollar-denominated funding from Afreximbank would be efficiently converted into local currency, enabling BOA to lend directly to farmers while shielding them from exchange rate volatility.
This financial architecture not only facilitates access to international capital markets, but also ensures that smallholder farmers are protected from macroeconomic shocks that could undermine their progress.
With this intervention, Nigeria is poised to unlock the full potential of its agriculture sector, empower millions of rural farmers, and build a more resilient and inclusive economy.
