FG, States Want 1% Interest Rate On China’s $4.5bn Mechanisation Loan


The Federal Government and state governments have called on China-Africa Machinery Corporation (CAMACO) to slash its interest rate on its proposed 4.5-billion-dollar farm mechanisation loan to one per cent.

The governments made the request on Thursday during a meeting of the Technical Implementation Committee of CAMACO with state Commissioners of Agriculture in Abuja.

News Agency of Nigeria (NAN) reports that the meeting was sequel to the 2016 meeting between President Muhammadu Buhari and Chinese President Jinping in China, where Jinping promised to grant Nigeria a loan for infrastructural development.

The loan is to enable China to supply farm machinery, ranging from tractors and bulldozers, to facilitate mechanised farming in the country.

Chief Audu Ogbeh

Dr Bukar Hassan, the Permanent Secretary, Ministry of Agriculture and Rural Development, said that the reduction of the interest rate would encourage state governments to sign the Memorandum of Understanding (MoU), prior to the supply of the machinery from China.

According to him, the Federal Government will act as guarantor for states that want to take the loan.

Hassan, who is the Chairman of the Technical Implementation Committee, also listed some conditions, which should be met by the Chinese before the MoU would be signed, as extension of the tenure for loan repayment to 20 years with five years moratorium, among others.

The other conditions include setting up machinery assembly plants in different geo-political zones of the country and payment of 20 per cent counterpart funds by the 22 participating states.

“We must ensure the quality of the equipment, its adaptation to our environment, as well as the design and price of the equipment we want to purchase,’’ he added.

The Coordinator of the CAMACO project, Dr James Young, said that the project was an agricultural intervention programme, aimed at supporting food production in Nigeria.

He said that the loan would be given in three batches; with 1.5-billion-dollar worth of equipment in the first phase, two-billion-dollar worth of equipment in the second phase and one-billion-dollar worth of machinery supply under the third phase.

Young assured the Federal Government that a machinery assembly plant would be set up in the country to train local fabricators and operators of the machines.

He noted that the MoU would also include an off-take agreement between the CAMACO project and the Federal Government to buy off food items produced with the machines, as a way of reducing the burden of the loan on the state governments.

Some of the state Commissioners for Agriculture from Adamawa, Benue, Enugu and Cross River, however, underscored the need for Nigeria to be self-sufficient in food production before exporting food to other countries.

They also urged the Federal Government to study the MoU well before encouraging states to append their signatures on it.

Besides, the commissioners solicited copies of the MoU to enable them to study the document critically in their various states. (NAN)


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