Macroeconomic Report & Economic Updates

Nigeria Economic Update (Issue 45)

The Anchor Borrowers’ Programme (ABP) was established to create economic linkages between smallholder farmers (SHFs) and reputable companies (anchors) involved in the production and processing of key agricultural commodities. Its main goal is to provide loans to SHFs via these links in order to increase agricultural productivity, create jobs, cut food import bills, and conserve foreign reserves. As at September 2021, the CBN had disbursed a total of N798.09 billion to SHFs through the Programme since its inception in November 2015.3 However, current economic trends indicate that the established goals are not being accomplished, as food prices continue to rise, and farmers are defaulting their obligations. In view of these developments, the CBN has changed the program’s guidelines to reflect contemporary realities and developments, as well as to promote best practices for program implementation.4 The new development seeks to sanction and blacklist from all CBN interventions any stakeholder found to be undermining the programme. Furthermore, the new guidelines have two windows: public sector- led and the private sector-led models, which in turn provides the state governments an opportunity to key into the programme through an Irrevocable Standing Payment Order (ISPO). Since most States prioritise agricultural sector in their agenda, this revision provides states with the opportunity to help their farmers gain access to finance provided by the Bank under the ABP.

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