The Managing Director and Chief Executive Officer of the Nigeria Incentive-Based Risk Sharing System for Agriculture Lending Plc (NIRSAL), Mr. Aliyu Abdulhameed, has stated that the organization is committed to enabling Nigerian cocoa farmers to benefit from the $67 billion global cocoa market.
He gave this commitment during a tour of the ADT Russet Limited, in Apapa, Lagos State, which is a beneficiary of a N1.5 billion facility from the Keystone Bank that was guaranteed by NIRSAL.
He said: “In a move that will help Nigeria benefit from the over $67 billion global cocoa market, NIRSAL has provided ADT Russet Limited– a cocoa bean sourcing and exporting company in Lagos State – with 50 percent Credit Risk Guarantee (CRG) on a working capital facility of N1.15 billion.”
He stated that NIRSAL favors the value chain approach to financing agriculture.
According to him, the pull-and-push power of the midstream segment – where ADT Russet operates – can impact pre-upstream and upstream operators, as well as downstream markets.
He added that by financing the ADT Russet, suppliers of seeds, agro-chemicals, and services on the one hand, and cocoa farmers on the other, are economically activated.
He explained that a marked increase in output, capacity utilization, financial performance, and new direct and indirect jobs are expected from the project.
Abdulhameed said NIRSAL’s guarantee and efficient monitoring of the project was aimed at boosting the ADT Russet’s export volume to 4,000 metric tonnes of cocoa per annum from the 500 metric tonnes per annum the company was operating before its engagement with NIRSAL.
He said: “I congratulate the ADT Russet and Keystone Bank for the indelible impact you are making in Africa and around the world with the Nigerian cocoa, which, needless to say, has great potential to turn Nigeria’s export fortunes around. I also challenge you to do more as the sky is the limit!”
The Managing Director of Keystone Bank Limited (KBL), Mr. Olaniran Olayinka, who was represented by the KBL’s Divisional Head, Lagos, Mr. John Chukwu, said the business track record of the ADT Russet and the NIRSAL guarantee convinced the bank to support the initiative.
He said: “Yes, it was a risk. But we had to take it and with close monitoring, it paid off well for everyone.
“The ADT opened my eyes to the role of NIRSAL in de-risking business and I give kudos to NIRSAL that this is possible.
“Keystone’s duty was to monitor and ensure that we recovered our money. The ADT did above expectation last year despite the COVID-19 pandemic and we are ready to increase our support to the ADT Russet.”
The Managing Director of the ADT Russet, Mr. Charles Eteri, said Keystone Bank was the only bank that agreed to finance his company among all the banks he approached.
Eteri said there had been remarkable differences for the better in the operations of the company since it came in contact with the NIRSAL and the KBL.
He said the cost of the facility received from the bank would have been higher without the NIRSAL’s intervention.
Eteri said: “I can say that it has been a great journey and we are in a much better place than we were more than a year ago before Keystone and the NISRAL came into our history.
“Before we came in contact with the NISRAL and Keystone, our annual capacity was somewhere between 500 and 600 metric tonnes. But now, we have crossed 1,500 metric tons regardless of the port issues, and we are even anticipating increasing our capacity to 2000 or 3,000 metric tons. This is our immediate goal.
“Our focus is to take cocoa beans from the farmers to those who need it for production. And depending on the economy, we will move to the next stage of processing the cocoa beans to cocoa powder. We are taking it gradually.
“Moreover, we pay a lot of attention to farmers we work with. There is a lot of due diligence that goes into their practices to maintain the standard.”