By Victor Uzoho
Analysts at Coronation Merchant Bank have said the availability of more credit facilities to the agricultural sector would expand employment and broaden economic inclusion.
In a statement released after the Bank’s monthly economic review, the analysts noted that leveraging credit through public-private-partnerships (PPPs) would ensure that the Nigerian farmers can access new technologies, and build the cold-chain distribution and export infrastructure.
According to them, this would ensure that agriculture contributes a much larger share of the national revenue and foreign exchange earnings.
They also noted that access to finance remains a challenge for the agriculture sector, adding that although there have been laudable interventions by the Central Bank of Nigeria (CBN), and the Federal Government, the sector still needs more investment and farmers more credit.
Building a sustainable public-private partnership able to transform the agriculture sector and ensure long term food security is a national imperative.
The statement reads: “With agricultural credit currently accounting for only 5.2% of total private sector credit, there is a huge need for financial institutions to diversify products and services for players across the agricultural value chain if Nigeria is to boost profitability and increase income from the sector.
“Building a sustainable public-private partnership able to transform the agriculture sector and ensure long term food security is a national imperative. This will also diversify the country’s economy, increase foreign exchange revenue, boost overall GDP growth and promote social stability by including more Nigerians in the economy.
“In Nigeria, the federal government has been proactive with import substitution. The Anchor Borrowers’ Programme (ABP), designed to create economic linkages between smallholder farmers and agricultural processors and food producers, has been reasonably successful.
“Under the ABP it is estimated that the CBN disbursed N841.3 billion to 3.9 million smallholder farmers cultivating 4.9 million hectares across the country. The 2021 wet season alone saw N161.2 billion released to 770,000 smallholder farmers cultivating seven commodities on a combined 1.1 million hectares.
“A further N43.2 billion was disbursed to support the cultivation of over 250,000 hectares of maize, sorghum, soya beans and rice during the 2021 dry season. In addition, the CBN’s maize reserve programme has successfully moderated maize prices by targeting large feed mill producers directly.”
Furthermore, the experts said it was critical that the private sector, especially banks, worked closely with the lawmakers and government departments to resolve bottlenecks in credit and investment, and unlock the huge potential for growth, earnings and employment in Nigeria’s agricultural sector.