CBN boosts agric sector with N75bn
Central Bank Governor, Sanusi Lamido Sanusi
The Central Bank of Nigeria (CBN) has approved about N75 billion to boost agricultural activities in the country.
According to a statement signed by the Head, Project Implementation of the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Mr Jude Uzonwanne, the grant was approved to assist farmers to de-risk agricultural business and damages arising from climate change.
He said that NIRSAL was a public/private initiative designed by the apex bank and the federal ministry of Agriculture in 2011 to disburse such grants to financial institutions for easy access by farmers nationwide.
He said, “The federal ministry of Agriculture is also helping to drive the re-construction of value change and where we can, we support that because our role is more or less to act as the lender to lenders, in order for us to do that comfortably, we have provided technical assistance to ensure that people can get the goods to markets, that buyers of goods are organised, so we don’t want farmers producing six million tonnes of tomatoes and there is no buyer for it.”
“If we can work with tomatoes processors to create paste factories or with rice millers to create rice mills, that become part of our responsibility in joint partnership with the federal ministry of agriculture,” he noted.
He also said that “We are trying to move away from an era in which people saw government assistance to agriculture as their piece of the national cake and they didn’t pay back loans, we know people who still owe federal government money, we want to move away from that.”
According to him, the CBN will release the fund to financial institutions for onward disbursement as loans to farmers’ cooperatives at low interest rate.
He said that N45 billion had been earmarked from the N75 billion as loans to the farmers, while the balance would be used to train the farmers and insure them.
“The N45 billion becomes critical to the lenders, the remaining of the N75 billion will now be spent on technical training of the farmers to know when to plant, type of fertilizer to use, because not all fertilizers are perfect for all crops and soil types.There is an allocation from the fund to support insurance companies to produce products to address the needs of farmers, and we are also trying to work with other partners to get more capital to support the growth of farmers,” he noted.
Uzonwanne said the fundamental goal of the initiative was to create millions of jobs with wealth out of agriculture in the next 10 years, which at the end would create societal stability.
He said that inadequate extension workers and private agro dealers in the country is a challenge, as such services are not appropriately deployed.
“We have spoken with some state governments to help improve the extension workers as well as to bring in more private agro dealers and to ensure that when farmers need fertilizers they don’t have to travel more than two kilometers” he explained.
Commenting on the CBN effort, President of Nigerian Association of Chambers of Commerce, Industry, Mines and Agriculture (NACCIMA), Dr. Herb Ademola Ajayi, described the move as “a sure way of encouraging investments in the sector.”
He said, “Before now, agric was seen as the most endangered sector, in terms of lending. Banks are always afraid to commit their funds to it but now, they can relax, knowing that their fund is safe.Apart from driving investments, the CBN’s decision, if well and transparently operated according to guidelines, will improve employment generation and total economic well being.”
The President, National Cashew Association of Nigeria, Mr. Tola Faseru, on his part, described the fund as a milestone and what operators have been clamouring for several years.
He said, “If the government is doing this, it will be excellent and shows that CBN and the government are becoming proactive and the results will be tremendous in terms of job creation and business boom.”
He, however, warned that the CBN needed to be up and doing in its operation as bankers are sheep in wolf’s clothing, preferring to divert money to other activities with no key impact on agric.
To the Managing Director of Dawacom International Limited, a cashew processing and agro-allied products exporting firm, Mr. Sotonye Anga, the fund is a step in the right direction.
According to him “This fund is a great initiative, and indeed, a step in the right direction. It will grow the Nigerian agric sector and help expand capacity of players in the sector.”
He, however, cautioned, “The Nigerian government and the CBN need to increase the fund to, at least, N500bn to be able to give enough confidence to the banks and in order to support agribusiness operations in the country” he explained.
Filed Under: Agriculture
