Nigeria has approved the disbursing of $268 million (about N96, 480, 000, 00 billion) in funding to support agricultural entrepreneurs and young technology innovators. The fund will support agritech startups as Nigeria makes increasing moves to diversify its economy from nearly 100% dependence on crude oil export.
Bloomberg quoted Vice President Yemi Osinbajo as saying in an emailed statement by the presidency that: “One tranche of the funding, worth 90 billion naira ($248 million), will be dispensed by the Central Bank as “soft loans” for people building small-scale agricultural businesses, while another $20 million will provide funding support to young innovators in technology.”
More than 85% of Micro, Small and Medium Enterprises (MSMEs) failed to access financing within 2013 and 2017, according to the National Bureau of Statistics (NBS) making Nigeria one of the most unfriendly environments for MSMEs.
Loans attract interest rates of between 20% to as high as 42% making external funding unattractive for startups.
But officially, interest rate is benchmarked at 13.5% and is still deemed one of the highest on the continent. Zambia is 10.25%, Kenya is 9%; Ethiopia is 7%; South Africa is 6.25%; and Cameroon at 4.25% is touted as one of the best.