In a bid to speed up full establishment of the 1,200 private sector driven Agricultural Equipment Hiring Enterprises (AEHE) across the states of the Federation the Presidency gave a directive to CBN to set aside ₦50 billion for the establishment of an Agricultural Mechanization Fund that will make credit available to farmers to mechanize their agricultural processes.
The beneficiaries of the mechanization subsidy are Nigerian farmers who are registered under the National Farmers Data Base.
The mechanization subsidy is targeted at small scale (subsistence) farmers with farm holdings ranging from 0.5 to 4 ha who have the desire to mechanize their farm operations.
Government will pay certain percentage of the cost of land preparations to mechanization service providers on behalf of farmers through the e-wallet system. This will enhance farmer’s productive capacity which will subsequently transform them from the subsistence farmers (using crude implements) to commercial farmers in line with the ATA 2015 target.

Breakdown  on the Private Sector Driven Agricultural Mechanization Programme
The Agricultural Mechanization Programme is a strategy put in place to set up Agricultural Equipment Hiring Enterprise (AEHE) in strategic locations to render farm gate mechanization services to Nigerian Farmers.
Agricultural Equipment Hiring Enterprise (AEHE) is to provide value added services, such as leasing/hiring out of various kinds of agricultural equipment for land preparation, harvesting and post-harvesting, repairs and maintenance of such equipment and as an incubator for training of personnel within farming communities.
Farmers can walk into an AEHE center and lease/hire agricultural machines to mechanize his/her farm operations for a fee without necessarily owning such machines.
Project Partners under the PPP that set up AEHE
  • Federal Ministry of Agriculture and Rural Development
  • BOA and Development Agencies
  • Financial Institutions
  • Agro-machineries vendors / manufacturer’s representatives
  • Service Providers Operators (farmers, farmer’s cooperatives, individuals and NGOs

Equipments in the AEHE Centre
  • A minimum of five tractors
  • Five power tillers
  • Harvest and post-harvest equipment tailored towards predominant crops in the location
The refinancing funding plan for SPOs:
  • Federal Government Funding loan – 35%
  • Financial Institutions – 35%
  • Vendors / Manufacturer’s Rep – 10%
  • SPOs Equity – 20%
Tenure of funding loan, interest rate and repayment plan
  • This refinancing loan to SPOs is repayable within four (4) years
  • The Interest rate for the on-going Mechanization Intervention Programme (MIP) is 7% and it is subject to review beyond the MIP
  • The first 2 years will be used to repay the Vendors 10% and BOA 35%
  • Government loan will be repaid within the remaining 2years, with two years moratorium on both capital and interest.
Conditions for off-take of AEHE by the SPOs
  • SPOs must provide 20% equity of the cost of an AEHE
  • The AEHE Centre must be driven by the Private Sector Service Provider Operators (SPOs) in the conformity with project guidelines
  • The location of the centre must be strategic to farming community with proven needs for mechanized services
  • The SPOs must have fenced office / workshop where the services can be accessed by the farmers
  • There must be Cooperative / commercial farmers who will be ready to off – take these services from the centre
  • Readiness to insure the equipment with reputable Insurance Company
  • SPOs must meet NIRSAL Mechanization Requirement to enjoy the 35% support from the Bank of Agriculture
Default and Penalty
If an SPO defaults in loan repayment as amortized after a grace period, the equipments in the AEHEs will be repossessed by the Ministerial Mechanization Task Force under the Agricultural Equipment Buy Back Scheme of the Project.
Such equipment will be refurbished and sold at a value commensurate to the default amount to offset the balance of the loan.
Potential Agro-machinery vendor
Agricultural machinery manufacturer’s representatives / vendors are dealers of mechanized farm equipments in the country that are considered as strategic partners in the Mechanization Project by providing their brands of equipment on the condition that:
  • Agro-machineries manufacturer’s representative / vendor in the country must have a standard workshop
  • Commitment to counterpart funding as stipulated by the project outline
  • Ability to market the equipment brand to SPOs
  • Vendor’s with after sales service strategy acceptable to the project
  • Readiness of manufacturers to set up a Semi-Knock Down Plant in the country
  • Evidence of availability of a minimum of 50 units of tractors within Nigeria
AGRO-MACH. DTC
Agro-Machinery Data Tracking Centre (Agro-Mach DTC.) is the state of the art agro-equipment data bank designed to keep track and inventory of all agricultural machinery deployed under this scheme and beyond to include all agro-machineries in the country to enable the country determine her agricultural mechanization level in terms of intensity and density.
Government Exit
The forces of demand and supply will interplay to decide when Government will exit from the project and hand it over completely to the private sector players while performing a regulatory role.