Economy
How to Insure Your Agricultural Projects in Nigeria
By Modupe Gbadeyanka
It is no doubt that agricultural production in Nigeria is faced with inherent and myriad of risks and prominent among them are input supply, price of inputs, agricultural yield, project prices and production risks due to effects of climate change or natural disasters.
It is important to note that the agricultural production risks always affect farmers and agribusiness in different ways, thereby affecting agricultural production and threatening food security in the country.
Agricultural insurance is the protection of farmers against the risks of natural disasters, pests and diseases in exchange for regular premium payments proportion to the likelihood and cost of risk involved.
Not many may know that in order to address agricultural production risks, the Federal Government of Nigeria established the Nigerian Agricultural Insurance Scheme, managed by Nigerian Agricultural Insurance Corporation (NAIC), to provide protection to farmers on the effect of natural hazards.
The scheme was launched on December 15, 1987, as part of its efforts to enhance and sustain food production in Nigeria in realization of the fact that most efforts to promote food production have not yielded much results, due largely to incidence of incremental weather conditions and the effects of natural hazards like floods, drought, pests, diseases, fire etc.
NAIC was established and incorporated by Act No. 37 of 1993 to operationalize the Nigerian Agricultural Insurance Scheme with the following key objectives:
* Provide financial support to farmers where losses to crops and livestock arise from natural hazards;
* Induce the provision of credit by financial institutions, as the insurance serves as an added collateral;
* Promote and enhance agricultural production by giving farmers confidence to accept new and modern innovations and inputs;
* Eliminate or minimize the need for Government to provide ad-hoc assistance to farmers during agricultural disasters.
Agricultural Items Covered by NAIC
The Scheme provide cover to all crops, livestock and tangible fixed assets like farm buildings, machinery, equipment, agricultural produce activities, warehousing and other Agro-processing activities.
Summary of items covered by NAIC include:
(a) Subsidized Crop – maize, rice, millet, yam, mixed crop, cassava, sorghum, vegetables, irish potato, sweet potato, soya beans, cowpea, pumpkin, melon, groundnut, sesame, wheat, peanut, coco yam, pepper, garlic etc.
(b) Subsidized Livestock – cattle, sheep, goat, poultry, fishery, pig, apiary, snailery, grass cutter, rabbitry etc.
(c) Commercial crop – cocoa, rubber, oil palm, horticulture, plantain, sugarcane, jatropha, ginger, cotton, tea, coffee, gum Arabic, pineapple, kolanut, tree crops etc.
(d) Commercial Livestock – dogs, horses, camel, donkeys, pets, zoo animals etc.
(e) Multi-Peril Cover (MPC) – combined trading, agroc-processing, storage rksks, ware-house activities etc.
(f) Tangible Fixed Assets – farm buildings, machinery, equipment, motor vehicles, fishing nets, outboard engines, fishing boats etc.
(g) Farmers, Farm Labour/Employees and their dependants.
(h) General Business – Motor vehicle, Fire and Special Perils, Burglary, Group Personal Accident, Money Insurance, Plant-All-Risks, Machinery Breakdown etc.
Perils Under Cover
The perils covered under the agricultural sub-sector are as follows:
(a) Subsidized Crops – The perils covered are comprehensive in nature and include fire, lightning, windstorm, flood, drought, pests and diseases.
(b) Commercial Crops = The perils covered include fire, lightning, windstorm, flood, drought.
(c) Subsidized Livestock – The perils covered are death or injury due to accident, disease, fire, lightning, storm and flood.
(d) Commercial Livestock – The perils covered are the same as in subsidized livestock.
(e) Multi-Peril Cover – The policy covers risks of loss or damage to agricultural produce or goods while in storage or in transit from one destination to the other or due to and fire, allied risks, burglary, house breaking and transit goods.
(f) Tangible Fixed Assets – The perils covered include loss or damage to insured items by fire, lightning, collision, explosion, storm, violent theft and other allied perils.
(g) Farmers’ Farm Labour, Employees and Dependants – The policy covers death or bodily injury which may result in temporary or permanent disability during the course of duty or work.
(h) General Business – Perils covered in General Insurance include theft, accident, burglary, loss or damage to plants, machinery etc, transit risks and other allied risks.
How to Insure Agricultural Projects with NAIC
NAIC was established to cater for all farmers in the country, either small, medium or large scale farmers either in groups or as individuals.
The scheme operates a mandatory cover which applies to all Agricultural and Agro-related projects or programmes assisted supported or fully funded from public funds, all direct and on-lending loans taken by Federal, State or Local Government for disbursement to farmers and all form of agricultural loan disbursed by all banks and non-bank lending agencies.
Insuring Agricultural Projects Through banks and other Lending Institutions
Insurance cover can be obtained through Banks and other lending agencies/institutions by following procedure outlined below:
* The farmer or client approaches the Bank or lending agency and applies for an agricultural loan;
* The bank or agency processes the loan and approval given;
* The Bank or agency decides on the applicable insurance needs of the loan applicant;
* NAIC and the bank/lending institution enlighten the client/loan applicant on all the insurable risks involved in the class of agric business or projects the farmer is proposing to embark upon and also the importance and benefits of taking the insurance cover;
* Proposal form is then issued to the client for completion from which NAIC obtains complete, accurate and adequate information about the applicant and the proposed project. For large scale project Bank offer letter and feasibility report of the projects are required;
* On proper completion of the proposal form, premium is computed based on the prevailing and approved rate on the loan volume, sum insured or estimated production cost of the proposed project(s);
* The client is advised on the premium payable to provide insurance cover to the project;
* Premium deducted by the Bank or intermediary is sent to NAIC by cheque, or electronic transfer together with the Bank remittance list and cover commences immediately;
* The Certificate of Provisional Insurance Cover (CPIC) and other documents are issued to the client/bank. This will confirm temporary cover;
* A comprehensive inspection is conducted on the farm to ascertain the suitability of the farm;
* Once the project has been found to be genuine and insurable based on the inspection report, cover will be fully granted on the project;
* Original policy is issued to the client through the lending bank.
Insurance of Agricultural Project by Individual/Self-Financed Farmers
Insurance cover can be obtained by self-financed or individual farmer through the following procedure:
* The Farmer collects proposal form from NAIC based on the interested project(s) to be insured;
* He is then enlightened/educated on how to complete the form and also the terms and conditions of the policies;
* NAIC examines the duly completed proposal form and compute the appropriate premium based on the estimated cost of production or sum insured of the project;
* On payment of appropriate premium a Certificate of Provisional Insurance Cover (CPIC) is issued as a temporary cover;
* A policy document is then issued to the insured as evidence of the contract;
* NAIC may undertake a monitoring visit to any of the insured projects as a way of verifying and assessing the projects.
The above provide a detailed procedure for insuring Agricultural projects with NAIC. All prospective clients are encouraged to contact the nearest NAIC office nationwide for enquiry and their agricultural insurance needs.
All clients are advised to study the conditions of their policies noting all exceptions and exclusions.
The approved premium rates for subsidized crop are 4 percent of the sum insured and 5 percent for livestock.
It is important to mention that under the Nigerian Agricultural Insurance Scheme some crops and livestock items are subsidized to the tune of 50 percent by the Federal and State Government in the proportion of 37.5 percent and 12.5 percent of the premium payable.
In NAIC, claims are treated and paid with dispatch and insured are encouraged to report claim incidence promptly to enable verification and commencement of processing for payment. The indemnity for crops is based on the approved input costs, less the value of crops harvested or salvaged if any. For the livestock indemnity is the value of the animal at the commencement of the policy plus the approved input costs.
By Adedapo Adesanya
Oil prices traded 5 per cent higher on Monday after Iran and the United States argued about demands for compensation, further stalling a possible deal to reopen the Strait of Hormuz.
Brent crude futures chalked up $4.17 or 4.99 per cent to sell at $87.72 a barrel, while the US West Texas Intermediate (WTI) crude futures surged $3.95 or 5.05 per cent to $82.13 per barrel.
Iran said the US must lift sanctions on it and meet other conditions for reopening the vital waterway, which carried a fifth of the world’s oil and liquefied natural gas before the start of the Middle East conflict in late February.
Meanwhile, US President Donald Trump said Iran must pay compensation for “all of the people that they have killed and gravely wounded.”
This comes as the Middle East country said it was nearing a final pact with Oman to define new shipping lanes through the strait but repeated that the US must meet other conditions, including compensation and an end to sanctions and military threats before the strategic waterway is reopened.
In a further threat to supply, the Iran-aligned Houthis said they had struck Saudi Aramco’s Jazan refinery on Sunday. Saudi Aramco has postponed the restart of the 400,000-barrel-per-day refinery to August 30 after two Houthi attacks in recent weeks.
ADNOC, a state-owned oil company in the United Arab Emirates, said on Friday that 15 of its vessels had been attacked while transiting the Strait of Hormuz since the beginning of the conflict.
Meanwhile, Ukraine’s military continued to attack Russia’s energy infrastructure, hitting the Taneco oil refinery in Tatarstan and the ZapSibNeftekhim petrochemical plant in Russia’s Tyumen region.
On the US supply side, stocks of crude oil in the Strategic Petroleum Reserve (SPR) fell by about 6.1 million barrels to 298.7 million barrels last week, the lowest level since January 1983.
Bank of America (BoFA) warned that oil prices could continue climbing into the winter if the US and Iran fail to reach an agreement reopening the Strait of Hormuz, with severe shortages already emerging in diesel, petrol, and global natural gas markets.
Mr Francisco Blanch, Bank of America’s head of commodities and derivatives research, told CNBC on Monday that only around 5 to 10 ships per day are currently passing through Hormuz, compared with roughly 140 before the war. With some crude now being rerouted through Saudi Arabia and the UAE, traffic would need to recover to around 80 to 100 ships per day just to stabilise energy markets.
By Adedapo Adesanya
The Senate Committee on Banking, Insurance and Other Financial Institutions has called for stronger collaboration among financial sector regulators and other stakeholders to strengthen Nigeria’s financial system and support sustainable economic growth.
The committee made the call during an expanded stakeholders’ engagement in Lagos, attended by the leadership of the Central Bank of Nigeria (CBN), Nigeria Deposit Insurance Corporation (NDIC), Asset Management Corporation of Nigeria (AMCON), National Insurance Commission (NAICOM) and Nigeria Export-Import Bank (NEXIM), among other industry stakeholders and financial experts.
Chairman of the committee, Mr Adetokunbo Abiru (Lagos East), who was represented by Mr Osita Izunaso (Imo West), said stronger legislative reforms and regulatory collaboration were necessary to reposition Nigeria’s financial architecture for long-term economic prosperity.
Mr Abiru said the financial sector remained critical to investment, job creation, business expansion and macroeconomic stability, stressing that its ability to mobilise savings, channel credit to productive sectors, facilitate investment and manage risks was fundamental to sustainable economic growth.
He said the current economic realities required closer collaboration between the legislature and financial regulators, noting that challenges confronting the sector were interconnected and could not be effectively addressed through isolated interventions.
The lawmaker identified inflationary pressures, global economic uncertainties, cybersecurity threats, low insurance penetration and the need to diversify Nigeria’s export base as some of the challenges requiring coordinated policy responses.
He said the engagement was aimed at generating practical solutions to strengthen the country’s financial architecture and support sustainable economic growth.
According to him, monetary policy, financial safety nets, banking institutions, the insurance industry and export finance were interdependent components of a stable financial system and must therefore be strengthened collectively.
The Commissioner for Insurance and Chief Executive Officer of the National Insurance Commission (NAICOM), Mr Olusegun Ayo Omosehin, said the Nigeria Insurance Industry Reform Act (NIIRA) 2025 had contributed significantly to stabilising and repositioning the insurance sector.
Mr Omosehin disclosed that 43 insurance companies had successfully recapitalised, describing the development as a major milestone for the industry.
He commended Abiru and members of the committee for their role in advancing insurance sector reforms and urged the House of Representatives to expedite action on the relevant insurance reform bill to enable it to receive presidential assent and become operational.
Representatives of the CBN Governor and the Managing Directors of AMCON, NEXIM and NDIC also commended the Senate committee for its oversight and legislative support, saying its interventions had strengthened the agencies’ capacity to discharge their statutory mandates.
The engagement, held under the theme, Strengthening Financial System Architecture for Sustainable Economic Growth and Stability in Nigeria, also featured presentations by Professor Uche Uwaleke, President of Capital Market Academics of Nigeria (CMAN); Professor Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited; and Dr Tilewa Adebajo, Chief Executive Officer of CFG Advisory.
The experts presented policy recommendations on key issues affecting Nigeria’s financial system, with emphasis on financial stability, investment and sustainable economic growth.
Mr Abiru said the Senate would continue to engage financial regulators and other stakeholders to deepen financial inclusion, strengthen public confidence in financial institutions and improve regulatory effectiveness.
He said the broader objective was to position Nigeria’s financial system to compete more effectively in the global economy while remaining resilient and responsive to the country’s economic transformation agenda.
By Aduragbemi Omiyale
The first six months of 2026 were not too good for Caverton Offshore Support Group Plc, as it suffered an N8.7 billion loss compared with the N2.1 billion net profit it recorded in the same period of 2025.
This occurred as the company posted a 10.91 per cent decline in earnings between January and June 2026, according to its financial statements for the period ended June 30, 2026.
Analysis of the results showed that the revenue generated in the period under review stood at N14.7 billion versus the N16.5 billion printed in the corresponding period of last year.
Business Post observed that the revenue was negatively impacted by a decline in earnings from helicopter charter and helicopter/airplane contract.
Further analysis of the financial results indicated that operating profit went down by 22.34 per cent to N7.3 billion from N9.4 billion, with administrative expenses jumping to N7.9 billion from N4.7 billion.
But Caverton believes things will get better, noting that the clearest driver of the recovery is Caverton Marine.
Through its relationship with Stena Bulk, one of the world’s leading tanker operators, the organisation now participates in three Suezmax tankers trading a rare source of foreign-currency revenue for a Nigerian-listed company.
It noted that the relationship is being deepened through Unity Shipping Worldwide, a joint venture with the Nigerian National Petroleum Company (NNPC) Limited and Stena Bulk that pairs the state-owned oil firm’s national position and Stena Bulk’s fleet with Caverton’s indigenous operating platform
Closer to home, the firm’s OMIBUS platform, developed with Shanghai-based electric-propulsion OEM Explomar, is bringing battery-electric passenger ferries to Lagos waterways. A prototype is already in service, and Caverton holds a firm order from Lagos State for ten vessels, an early-mover position in clean inland-water transport that the group believes can be replicated across other states as the fleet enters service and ferry operations mature into steady, recurring revenue.
In aviation, the institution said the recovery is anchored on its partnership with NHV, a Belgium-based international helicopter operator, with the restructuring of charter operations targeted for the second half of 2026.
“The first half of the year tested us, but the direction of travel is now visible in the numbers.
“Quarter on quarter, we are working to build up our revenue to narrow losses. Our marine business units, from international tankers to electric ferries, are scaling.
“Meanwhile, our aviation relaunch is on track for the second half, and our cost base is tighter than it has been in years. There is distance still to travel, but Caverton is moving from stabilisation to recovery, and we intend to finish 2026 with that momentum intact,” the chief executive of Caverton, Mr Olabode Makanjuola, stated.
4 Comments