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By Grace Abe
The Federal government has inaugurated an innovative financial and digital monitoring system for the Special Agro- Industrial Processing Zones Programme (SAPZ) to develop critical agro-industrial infrastructure.
The initiatives were inaugurated in Abuja on Thursday, during the validation workshop on innovative financial products and the Digital Financial Flow Monitoring System (DFFMS) under SAPZ.
SAPZ National Programme Coordinator, Dr Kabir Yusuf explained that SAPZ was designed not only to develop critical industrial infrastructure but also to create a viable ecosystem.
Yusuf said the ecosystem connects farmers, processors, traders, financial institutions and private investors to sustainable markets and investment opportunities.
He said infrastructure and market access could only deliver their full potential when businesses have access to appropriate, affordable and sustainable finance.
He identified one of the major challenges facing agricultural investment as the perception and management of risks production, climate, markets, operational and regulatory risks.
According to the coordinator, the risks often constrain the willingness of financial institutions and private investors to commit adequate capital to the sector.
He added that the risks propelled the development of innovative financial products and risk sharing mechanisms to de-risk investment, improve access to finance and attract greater private- sector capital into the SAPZ ecosystem.
”SAPZ is a government-enabled, private-sector-led agro-production and processing model, which establishes designated modern production and processing zones.
”These zones are established to ensure agro-business operates efficiently, leveraging on shared infrastructure and enabling policies from government services.
”It ensures that agro-business operates not just efficiently and effectively, but competitively, and also attracts private-sector investment into value-added agro-processing.
“We need to ensure that the private sector is carried along and the ecosystem is properly supported by government and to also develop together with the private sector, such as insurance and banks.
“This will enable the development of innovative financial products specifically for farmers and also a financial flow monitoring system that tracks investment into this zone,” he said.
Yusuf explained that banks give loans to agro-business entities, insurance companies insure farmers but all at a very high rate that farmers could not afford.
He pointed out that Nigerian farmers were mostly small holders, hence the need for the government to provide an ecosystem that enables insurance agencies to reduce their rates.
“The effort is also to ensure banks equally provide lower lending rates and higher appetite to lend.
“This is because we understand the risky nature of agro-business, and banks and insurance companies prefer to deal with other businesses like petroleum, IT and other bigger businesses,” he said.
Speaking on the digital financial flow monitoring system, Yusuf said as investment and financing flows increase within SAPZ, reliable and timely information were necessary.
“This will address where funds are coming from, where they are going, who is benefitting and what results they are generating,” he said.
The coordinator added that the DFFMS would provide a platform for improved transparency, accountability, financial tracking and data- driven decision-making across the SAPZ ecosystem.
He added that a robust DFFMS would strengthen investor confidence and support better financial investment decisions.
Earlier, SAPZ Head of Rural Institutions Development, Mr Abel Ameh, thanked the stakeholders for their continued support to the programme.
Ameh also commended their commitment to strengthening agricultural investment, developing the DFFMS, financial inclusion and private sector participation. (NAN)
Edited by Philip Yatai
English (US) ·