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The Central Bank of Nigeria (CBN) has predicted that its newly introduced non-interest Accelerated Agricultural Development Scheme (AADS) loans will create jobs for more than 370,000 youths across the country.
According to the apex bank, under the scheme, an average financing size of N250,000 per hectare of land is to be availed every beneficiary for arable crops; N500,000 per unit for livestock and N1.5 million for plantation crops like cocoa, cashew and oil palm.
The objective of the scheme, according to the CBN, “ is to engage a minimum of 370,000 youths in agricultural production across the country over the next three years in order to reduce unemployment among the youths and increase agricultural production towards food security, job creation, and economic diversification.”
This is in furtherance of its pivotal role in providing funding to assist the critical sector of the economy.
To access the loans, the apex bank explains that the beneficiary must be a Nigerian youth whose ages range from 18 to 35 years and should sign an undertaking to abide by the terms of agreement of the Scheme. Explaining its modus operandi, the bank states that state government is to mobilise prospective young farmers with representation from all senatorial zones. It adds:
“State governments/FCT are to provide agricultural land, a minimum of 100 hectares per cluster, in contiguous locations in all senatorial zones; prospective entrepreneurs (that meet the eligibility criteria) shall be grouped into clusters by commodity to be produced; state government to allocate two to five hectares of land per beneficiary; state government to provide access roads, water sources and other infrastructure that will enhance agricultural production on the land; states may charge a rental on land (maximum of N10,000 per hectare) to defray the cost of land clearing and other infrastructure provided. Rental charged will be embedded in the Economics of Production (EoP) of the farmer.”
On financing, “the participating financial institutions (PFIs) will act as agents of the CBN in disbursing the financing to the beneficiaries, which shall be in kind; the PFIs shall purchase the inputs for on-selling to the beneficiaries, using CBN approved non-interest financing contract of Murabaha, Istisna’, etc at an all-inclusive rate of return of nine per cent per annum.
For the financing of labour, the PFI shall use Service Ijarah or any other appropriate CBN approved contract for non-interest financial institutions (NIFIs) with the same all-inclusive rate of return of nine per cent; financing tenor is six months for grains and broiler production (rice, maize, soy bean etc); 18 months for cassava; 24 months for egg production and ruminants; five years for plantation crops etc
“Average financing size of N250,000 per ha for arable crops; N500,000 per unit for livestock; and N1.5 million naira for plantation crops “like cocoa, cashew and oil palm.
As for the marketing, the CBN guideline stipulates that “ anchors/processors/Aggregators shall sign uptake agreement with PMT;produce off-take shall be on cash and carry basis and contiguous nature of farms should reduce the logistics associated with aggregation.”