The Bank of Agriculture (BOA) has secured a $1 billion intervention fund through a strategic partnership with the African Export-Import Bank (Afreximbank), a move designed to transform the fortunes of smallholder farmers and strengthen Nigeria’s agricultural value chain from production to market access.
This development follows the approval by President Bola Tinubu for the establishment of the National Food Security Fund, a revolving matching fund created in collaboration with state governments.
Officially named the National Smallholder Farmers Fund, the initiative is aimed at addressing long-standing financial barriers faced by smallholder farmers by providing affordable credit for essential inputs, mechanisation, and structured access to markets.
Smallholder farmers, who account for over 90 percent of Nigeria’s agricultural output, have historically lacked access to finance, modern technology, and reliable market systems.
The new fund seeks to close these gaps by equipping farmers with the capital and resources they need to scale their operations, increase productivity, and integrate more effectively into both national and continental supply chains.
“This is more than just a fund; it is a bold commitment to ensuring our nation’s food security,” said Ayo Sotinrin, Managing Director and CEO of BOA.
“By joining forces with Afreximbank, we are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.”
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Mrs. Kanayo Awani, Executive Vice President for Intra-Africa Trade and Export Development at Afreximbank, highlighted the importance of the initiative. “Smallholder farmers are an essential part of the agricultural value chain and represent important contributors to the growth of the agro-industry sector,” she said.
“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.”
The agreement between BOA and Afreximbank includes two core mechanisms to guarantee the fund’s success. First, a guarantee framework will allow Afreximbank to provide backing for loans disbursed by BOA, reducing credit risks and expanding financial access to underserved farmers.
Second, a currency swap arrangement will convert dollar-denominated funding from Afreximbank into local currency, enabling BOA to lend directly to farmers while protecting them from exchange rate volatility, according to Nairametrics.
Bank of Agriculture secures $1 billion to boost smallholder farming in Nigeria – Nairametrics.
By combining international capital access with safeguards against macroeconomic shocks, the fund positions Nigeria to unlock the full potential of its agricultural sector, empower millions of rural farmers, and build a more resilient and inclusive economy.
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Image Credit: Nairametrics
