The Nigeria government’s effort to increase the agricultural sector has yielded a good result as the Federal Government of Nigeria signed a fresh $1.2 billion Memorandum of Understanding (MOU) with the Development Bank of Brazil, $1.2 billion loans from Brazil to Nigeria for agriculture modernization was given to help the Nigeria agricultural sector.
The government aims to improve agriculture mechanization and intends to set up modern agro centres across the country with credit facility.
The loan agreement was addressed by the Senior Special Assistant to President Muhammadu Buhari on Agriculture, Dr Andrew Kwasari in Abuja.
What is the Credit Facility and why Nigeria got $1.2 billion loans from Brazil for agriculture
A credit facility is a loan given to a business and corporate world.
This credit facility permits a business to borrow money in form of a loan over a long period instead of coming back for a fresh loan when it needs another cash inflow.
A credit facility is an alternative way to get corporate loans, as it helps firms achieve their goals much faster and saves them the pressure of reapplying.
The Federal Government needs this loan to tackle two key factors, that requires an urgent improvement in the Nigerian Agric sector. Agricultural modernization and agro-processing.
The credit facility is foreseen to inject a $1.2bn foreign direct investment at a 3% interest rate over 15 years of the agreement.
The credit facility labelled “the Green Imperative Project “(GIP) would last 15 years.
The loan is a bilateral agreement between the Federal Government Nigeria and the Brazilian Government, and the loan would be guaranteed by the Islamic Development Bank and Islamic Corporation of Insurance for Export Credit.