The Bank of Agriculture (BOA) and the African Export-Import Bank (Afreximbank) have signed a landmark agreement for a US$1 billion financing program. The deal, finalized at the Intra-African Trade Fair (IATF) 2025 in Algiers, Algeria, is set to provide support to Nigeria’s smallholder farmers and the entire agricultural value chain.
The partnership aims to mobilize up to US$1 billion to directly support primary production, processing, and market linkages for smallholder farmers, who are responsible for over 90% of the nation’s agricultural output. This initiative directly supports President Bola Ahmed Tinubu’s vision for a National Food Security Fund, also known as “The National Smallholder Farmers Fund,” which will be a revolving matching fund in collaboration with State Governments.
Mr. Ayo Sotinrin, the Managing Director/CEO of BOA, emphasized that the agreement is more than just a financial deal—it’s a strategic intervention for food security. “This is a bold commitment to ensuring our nation’s agricultural future,” he said. “By joining forces with Afreximbank, we are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.”
Despite their immense contribution, smallholder farmers often face significant challenges, including inadequate access to finance, limited technology adoption, and fragmented market access. This new fund is designed to close these systemic gaps by providing affordable credit for critical inputs and mechanization, which will boost productivity and enable greater integration into national and continental markets.
Mrs. Kanayo Awani, Afreximbank’s Executive Vice President for Intra-African Trade and Export Development, highlighted the importance of supporting this essential group. “Smallholder farmers are a crucial part of the agricultural value chain,” she noted. “By partnering with BOA, we are providing critical liquidity and easing the hardships faced by this previously underserved group.”
The collaboration agreement establishes a framework to explore two key mechanisms:
- Guarantee Mechanisms: Afreximbank will provide guarantees for loans disbursed by BOA, which will reduce credit risk and expand access to financing for smallholder farmers.
- Currency Swap Arrangements: This will allow dollar-denominated funding from Afreximbank to be efficiently converted to local currency for on-lending to farmers, shielding them from the risks of exchange rate fluctuations.