There is currently a revolution in the agricultural sector of the economy. The bankers committee, multi-lateral agencies and the agric ministry are demonstrating a renewed commitment to transforming the sector.
It is beginning to dawn on stakeholders, particularly the federal government, that there must be a gradual shift from over-reliance on oil to the agric sector as the current dynamics surrounding oil in the international arena call for a rethink.
For many years, crude oil has stood as major export earner for the country even though it hasn’t been effective in creating employment opportunities for the huge population of over 170 million people with a ballooning youth population.
Specifically, in the 1960s, Nigeria was the biggest exporter of peanuts in the world and had 27 per cent of the palm oil trade. It remains one of the world’s top cocoa growers, but production and quality have declined since their heyday in the 1970s as a result of oil boom.
The result is that Nigeria is now the world’s second largest importer of rice and the biggest buyer of U.S. wheat, while much of its own fertile land lies fallow. A booming population has sent its food import bill rocketing to around $11 billion a year which is equivalent to more than a third of the federal government budget.
Nonetheless, there is now, a lot of collaboration on the part of the banks, Central Bank of Nigeria (CBN) and the Ministry of Agriculture. While the banks and the apex bank are addressing issues regarding funding, the agric ministry is churning out policies that would make the sector suitable for funding by local and international finance agencies.
Only recently, CBN Governor, Mallam Sanusi Lamido Sanusi said, for Nigeria to diversify its economy and achieve sustainable development, agriculture has to be given a pride of place as largest employer of labour.
CBN, Bankers Committee agric. risk-sharing programme
To achieve diversification of the economy and achieve sustainable development, CBN believes the sector needs to be stripped off inherent risks that impair bank lending. That thinking by the apex bank explains why it entered into collaboration with the bankers’ committee to establish the Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), which seeks to de-risk agriculture in Nigeria by ensuring that those in the business have access to loans on a concessionary basis.
Effective positioning of agric sector as alternative to oil… NAIJA INVEST
Industry watchers believe the greatest impetus to the success of NIRSAL was the floating of N200 billion agriculture credit scheme by the CBN. The apex bank also launched the N600 billion NIRSAL funding programme meant to guarantee up to 75 per cent of bank loans to various businesses in the agric. value chain.
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