The Federal Government has signed a fresh $1.2 billion Memorandum of Understanding (MOU) with the Development Bank of Brazil for agriculture modernization in Nigeria.
According to a report by the Guardian, the Nigerian government intends to improve agriculture mechanization and set up modern agro centers across the country with the credit facility.
The Senior Special Assistant to President Muhammadu Buhari on Agriculture, Dr. Andrew Kwasari addressed newsmen in Abuja on the loan agreement.
Nature of loan
The loan is a bilateral agreement between Nigeria and the Brazilian Government, and would be guaranteed by the Islamic Development Bank and Islamic Corporation of Insurance for Export Credit.
The credit facility is called “the Green Imperative Project “(GIP) and would last a period of 15 years.
The credit facility is needed by the FG to tackle the two key areas lacking in the Nigerian Agric sector. Agricultural modernization and agro-processing.
The credit facility is expected to inject a $1.2bn foreign direct investment at a 3% interest rate over a 15-year period giving
Credit Facility: A credit facility is a type of loan made in a business or corporate finance context. It allows the borrowing business to take out money over an extended period of time rather than reapplying for a loan each time it needs money.
In effect, a credit facility lets a company take out an umbrella loan for generating capital over an extended period of time.