Nigeria is holding talks with the Export Import Bank of China for a $1.5 billion loan to boost processing of rice and cassava in Africa's most populous country, Agriculture Minister, Akinwunmi Adesina has said.
According Bloomberg News, the loan is being sought on "concessionary terms at a 2 per cent interest rate with a repayment period of 20 years," Adesina said in an interview in Abuja "We want to reduce our import dependency."
Part of the loan will fund the procurement of 100 large- scale rice mills, with a combined capacity to process 2.1 million metric tons of rice a year, from Chinese companies, Adesina said. The rest will be devoted to expanding capacity for processing cassava into flour to substitute wheat flour and reduce imports, he said.
Nigeria, which has more than 160 million people, spends $10 billion annually importing rice, wheat, sugar and fish, according to the Agriculture Ministry. While the country grew enough food to feed itself in the 1960s, it is now the world's largest importer of rice and sub-Saharan Africa's biggest importer of wheat and sugar.
The government will provide "single-digit interest rates for all agriculture loans" from next year, Adesina said. At least 10 million mobile phones will be distributed to farmers in 2013 to provide weather and market information as well as extension services on the use of inputs including seeds and fertilizer, he said. Nigeria's annual inflation rate rose to 11.7 percent in October.
The government's strategy is to help small-scale farmers, who produce most of the country's food, with access to credit and improved farming methods while encouraging private investments in large-scale farming. At least $8 billion worth of investment commitments in agriculture were secured by President Goodluck Jonathan's administration this year, Adesina said.