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The Bank of Agriculture (BOA) has signed a deal with African Export-Import Bank (Afreximbank) to mobilise up to $1 billion for direct financial support for smallholder farmers and the agricultural value chain in Nigeria.  

The agreement announced on Tuesday was finalised during the recently concluded Intra-African Trade Fair (IATF) 2025 in Algiers, Algeria.  

By equipping farmers with access to capital and mechanisation equipment, the fund will enable increased productivity, value addition through processing, and stronger integration into national and continental markets, according to IATF, jointly organised by Afreximbank, African Union Commission, and the secretariat of the African Continental Free Trade Area.

Nigeria’s smallholder farmers are responsible for over 90% of the nation’s agricultural output, yet struggle with inadequate access to finance, poor adoption of improved technologies, and fragmented market access, Afreximbank noted.  

“This is more than just a fund; it is a bold commitment to ensuring our nation’s food security,” said Ayo Sotinrin, Managing Director/Chief Executive Officer, BOA. “By joining forces with Afreximbank, we are unlocking opportunities for smallholder farmers to move beyond subsistence farming into sustainable and profitable agribusiness.”  

The collaboration agreement establishes a framework for exploring guarantee mechanisms whereby Afreximbank would provide guarantees for loans disbursed by BOA, thus reducing credit risk and extending financing access to previously underserved smallholder farmers. It also covers currency swap arrangements to enable dollar denominated funding from Afreximbank to be efficiently converted to local currency for on-ward lending to the farmers by BOA. 

Both organisations expressed hope that by implementing this mechanism, the partnership will facilitate easier access to international capital markets, while shielding smallholder farmers from the risks associated with exchange rate fluctuations.

Nigerian President Bola Tinubu administration recently established a national food security fund, which will be a revolving matching fund in partnership with state governments. Christened the National Smallholder Farmers Fund, the new funding framework is designed to close the systemic financial gap faced by Nigeria’s smallholder farmers by providing access to affordable credit for critical inputs, mechanisation, and structured market linkages.  

BOA is owned by the Federal Government of Nigeria through the Federal Ministry of Finance Incorporated and the Central Bank of Nigeria. It is the country’s development finance institution for agriculture and rural development. Established in 1972, BOA is mandated to provide credit, capacity development, and financial inclusion services to boost agricultural value chains, create rural jobs, and drive sustainable economic growth. 

The recent appointment of its new Managing Director and CEO by President Tinubu aimed to be part of the initiatives to transform BOA into a modern, forward-thinking institution.

Afreximbank said the just ended fourth Intra-African Trade Fair (IATF2025) was a huge success, exceeding all its targets. The event drew over 112,000 participants, both in person and online, and generated more than $48 billion in trade deals, according to the trade finance institution.