This was disclosed by the CBN’s Director, Development Finance Department, Yila Yusuf, during the flag-off of Farm Inputs Distribution for cotton farmers for the 2020 planting season in Kwali, Abuja .
The Director who was represented at the event by Ayoola Quadri, Mr Yusuf said the bank would finance the farmers under the bank’s 10 focal commodities which would cut across the value chains.
He said the step was to create an impact that would guarantee food security in the country stating that CBN had engaged 256,000 farmers in cotton production for the 2020 planting season through its ABP.
Mr Yusuf who stressed that farmers are expected to pay back the loan given to them by CBN under the programme added that interest rates paid on the loan have been reduced from nine per cent to five per cent as a result of the novel coronavirus pandemic,
He said with the commitment of the bank in 2018 to cotton production, textile industries in 2019 had enough supply of cotton produced within the country and even have some left in their warehouses.
“CBN is trying to bring back the glory of textiles of those days where the industry used to employ 10 million people across the country.
“In the 80s, we lost that glory because of smuggling where our country was turned to a dumping ground of textiles materials. It is an unfortunate situation, about five billion dollars was spent annually on the importation of textiles,” he said.
He added that the apex bank was doing backward integration to ensure that the entire value chain in the industry was funded for the benefit of the people and the country.
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In November 2015, President Muhammadu Buhari launched the ABP to provide farm inputs in kind and cash to small-holder farmers (SHFs) to boost agricultural production and for the country to reverse its negative balance of payments on food.
Farmers captured under this programme include those cultivating cereals, cotton, roots and tubers, sugarcane, tree crops, legumes, tomato and livestock.
The loans are disbursed through any of the Deposit Money Banks (DMBs), Development Finance Institutions (DFIs) and Microfinance Banks (MFBs), all of which the programme recognises as Participating Financial Institutions (PFIs).
According to the guidelines of the programme, upon harvest, benefiting farmers are expected to repay their loans with harvested produce (which must cover the loan principal and interest) to an ‘anchor’ who pays the cash equivalent to the farmer’s account.
The anchor could either be a private large-scale integrated processor or a state government. In the case of Kebbi, the state government is the anchor.
