James Emejo in Abuja
National Agricultural Development Fund (NADF) said it was prepared to assume a more prominent role in mobilising and structuring funding for the agricultural sector.
Executive Secretary/Chief Executive of NADF, Mr. Mohammed Ibrahim, said the objective was not merely to create another financing framework but to widen the range of credible funding options available to farmers, agribusinesses, and other actors across the agricultural value chain.
Ibrahim said the framework would establish a structured basis for delivering NADF interventions through licensed Non-Interest Financial Institutions, with governance, operational, risk-management and Shari’ah-compliance requirements built into the system.
The significance of the proposal, however, will ultimately depend on whether it can translate into actual financing for agricultural enterprises rather than remain another policy framework.
Ibrahim spoke at a stakeholders’ validation event for a proposed framework that would enable the fund deploy non-interest financing through licensed financial institutions.
He said it was another channel in efforts to address the persistent funding constraints confronting farmers and agribusinesses.
The move followed confirmation by Central Bank of Nigeria (CBN) Director, Development Finance Advisory Department, Dr Paul Oluikpe.
Oluikpe affirmed that the apex bank had moved away from direct developmental interventions, underscoring the growing importance of institutions, such as NADF, in filling the financing gap.
That effectively placed the proposed non-interest finance framework within a broader restructuring of how development finance would reach Nigeria’s agricultural sector.
Oluikpe said the scale of financing required by agriculture was enormous, with funding needs extending beyond production to infrastructure, mechanisation, and other parts of the value chain.
He said the federal government’s food security objectives had made institutions, such as NADF, increasingly important in mobilising resources and addressing those gaps.
The CBN official also described the non-interest finance initiative as an opportunity to introduce a financing dimension that had often been overlooked in agricultural development.
He said, “With the non-interest finance framework that is being looked at and validated today, it’s really a key opportunity for us to bring in that particular dimension.”
The development gives NADF a potentially broader role in Nigeria’s agricultural financing ecosystem, moving beyond the traditional conception of public agricultural intervention towards the structuring of multiple funding channels.
The fund’s recent activities suggested that the repositioning was already underway.
In June, NADF launched a blended finance initiative aimed at attracting private capital into agriculture. It said public resources alone could not finance the scale of transformation required in the sector.
NADF had also been developing mechanisms around climate-risk financing and data-driven agricultural investment, indicating an emerging strategy focused on using its public mandate to unlock additional sources of capital rather than relying solely on direct government funding.
Against that backdrop, the proposed non-interest framework represents another layer of the fund’s emerging financing architecture.
NADF’s Head of Investment, Olalekan Alabi, stressed that stakeholders were expected to test the documents for practical applicability before they were finalised.
According to Alabi, the framework would define the institutional architecture, financing structures, responsibilities of participating institutions, risk management and control mechanisms, while the accompanying guidelines would prescribe how individual financing interventions would be assessed, approved, implemented, monitored and reported.
“We are not here simply to confirm that the documents have been prepared. We are here to test their technical robustness and practical applicability,” Alabi said.
The distinction is important given the structural problems that have historically limited agricultural credit, including the risks associated with production, inadequate infrastructure, and difficulties in assessing agricultural borrowers.
Deputy Chairman of CBN’s Financial Regulation Advisory Council of Experts, Professor Bashir Aliyu Umar, said the proposed framework could also deepen financial inclusion by bringing more Nigerians into the formal financing system.
He said incorporating non-interest financing into the wider financial system would provide another avenue through which capital could reach parts of the population and agricultural economy that conventional financing mechanisms might not adequately serve.
For NADF, the immediate task is to convert the proposed framework from a policy document into an operational financing mechanism.
Ibrahim said the draft had deliberately been subjected to stakeholder scrutiny before finalisation, while Alabi said observations from regulators, financial institutions, development finance specialists, and academics would be incorporated into the final documents.