By Bode S Ajayi
“Innovation is the unrelenting drive to break the status quo and develop anew where few have dared to go“ – Steven Jeffes
Established ten years ago, NIRSAL PLC has, especially over the past five years under its current management, became a visible and respected presence on the nation’s financial and agribusiness scene.
The institution’s distinctive green and black logo has become familiar to partners, beneficiaries and other stakeholders in boardrooms, conferences, communities and farm sites across the country.
Another defining feature of NIRSAL is the passionate professionalism of the institution’s leadership, exemplified by its highly articulate MD/CEO, Aliyu Abatti Abdulhameed.
But perhaps the one quality that defines NIRSAL the most is its overarching focus on innovation. NIRSAL PLC’s trajectory over the past half decade under its current management has been marked by a consuming interest in tweaking the inflection points of the Nigeria’s agricultural ecosystem to produce better outcomes in productivity, yield and efficiency.
And the beneficiaries of these positive outcomes are not only the high-networth players in the agricultural sector but also the millions of small scale farmers across the country who, according to the UN’s Food and Agriculture Organization constitute over 80% of participants in the sector. Small wonder AfDB President Dr Akin Adesina described NIRSAL PLC as a “game changer” in 2017.
Of course, NIRSAL PLC’s visibility can partly be explained by the centrality of NIRSAL’s mandate: “to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agriculture and agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalizing incentives for agricultural lending through its five strategic pillars, namely: Risk Sharing, Insurance, Technical Assistance, Incentives and Rating.
But that’s not the whole story. The organization’s claim to fame is much bigger than its formal mandate. Rather it is this abiding focus on innovation, on fresh ways of seeing agriculture and agribusiness, on new approaches to revolutionize age-old practices in order to make them fit for purpose to meet new needs in a country with a burgeoning population that needs to be fed quickly, cheaply and sustainably.
As Abdulhameed likes to say, “NIRSAL has innovation in its DNA”. What he means is that in NIRSAL PLC, innovation is not a textbook concept or a mere gimmick that is whipped out occasionally to impress but a philosophy that guides the operations and initiatives of the organization, organically, top to bottom. It is a way of seeing both the financing and the practice of agriculture that encourages an inclusive and more effective approach by banks and players at critical points of the value chain.
Consider the strategic support recently provided by NIRSAL PLC to ADT Russet Limited, a cocoa export company based in Lagos which amounts to a 50 per cent credit risk guarantee on a working capital facility of N1.15bn. The objective is to help the country get a bigger slice of a big cake: the $67 billion global cocoa market. That’s not all. As NIRSAL’s spokesperson Anne Ihugba explained in a press release, “apart from the absorption of a substantial part of its risk exposure in the event of loan delinquency, NIRSAL is also providing efficient monitoring of the project aimed at boosting ADT Russet’s export volume to 4,000 metric tonnes per annum.”
Another key benefit of the project is the expansion of the market for cocoa farmers as well as boosting the cocoa value chain and the income of smallholder farmers who are important players in the chain. All in all, the intervention, in conception and execution is innovative in its pursuit of higher yield, market health, private sector growth and national interest. Small wonder Managing Director of the company, Charles Eteri described the project as an expression of NIRSAL PLC’s focus on supporting “serious-minded firms” which are critical to Nigeria’s quest for economic growth and diversification. Indeed, NIRSAL PLC takes serious firms with serious ideas in the agribusiness sector very seriously indeed.
Strategic. Impactful. Market-driven. Profitable. Beneficial to both big and small players. The ADT Russet project is a metaphor for other innovation-driven NIRSAL supported projects. As reported by THE NATION, NIRSAL has guaranteed projects worth $648 million, about (N266.97 billion) in the last five years. An overwhelming majority have achieved their set objectives as confirmed by a failure rate of less than one percent.
Notably, beyond cocoa, the NIRSAL PLC focus covers 18 commodities comprising crops, livestock, poultry and fishery. In each of the commodities, the institution’s support for firms and projects that meets its rigorous conditions covers production, input supply, processing, transport, logistic, warehousing, industrial market, export market and domestic consumer market.
This focus on supporting innovative and impactful projects is producing significant dividends for the sector and the overall national economy. From inception to date, NIRSAL Plc has provided its Credit Risk Guarantee (CRG) cover on over N124 billion in commercial loans and investments to agriculture and agribusiness, keeping loan crystallization below 1%. A further N40 Billion has been facilitated from non-commercial sources.
Notably, NIRSAL has worked with the insurance industry to develop five (5) NAICOM-approved index-based agricultural insurance products which are currently being marketed by 9 private insurance companies. In the last 5 years, over 1.4 million new policies have been sold to farmers as the innovative products truly compensate them to the tune of their average expected return in the event of losses arising from pests, adverse weather conditions, and diseases.
The bottom line: NIRSAL Plc’s mandate activities have created and sustained over 590,000 direct and indirect jobs across agricultural value chains and positively impacted over 3.5 million Nigerian lives.
It is significant that while achieving all these, NIRSAL has – innovatively again – grown its balance sheet to NGN140billion, its equity by 1,415% and total assets by 87%.
As NIRSAL PLC continues to explore new ways of adding value to agribusiness in Nigeria to the benefit of players along the value chain and the overall economy, it will be interesting to see where its innovation-based focus will take it next.
*Ajayi is a policy and public affairs commentator.
