Central Bank Of Nigeria Targets 10% Increase In Agriculture Funding By 2024

The Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, projects a 10% increase in lending to the Nigerian agricultural industry over the next two years.

Emefiele also stated that under the Anchors Borrowers' Programme, approximately $2 billion of the $2.5 billion earmarked for key initiatives in the manufacturing, mining, and agriculture, services sectors had been disbursed to over three million farmers cultivating over 4.7 million hectares of arable land in the 36 states and the Federal Capital Territory (FCT) (ABP).

During a luncheon with the board of the United Bank for Africa (UBA) in Abuja over the weekend, he stated that more than 80% of the capital was earmarked for the agricultural sector.

Arise TV reports that Emefiele stated that the central bank's intervention programs implemented since his appointment have helped farmers dramatically enhance their yields and contributed greatly to Nigeria's march toward food self-sufficiency.

"For example, we have witnessed the re-emergence of the rice pyramids," he remarked. Rice output has climbed to more over 7.5 million metric tons per year, up from less than four million metric tons in 2015, previous to the implementation of the Anchor Borrowers Program (ABP).

"Before the Anchor Borrowers Programme, there were only 15 conventional rice mills in Nigeria." We now have over 50 conventional and integrated rice mills, which are producing jobs and lowering unemployment.

"All of this was accomplished in collaboration with deposit money institutions, which serve as our identification, risk assessment, and distribution mechanism for these actions."

Emefiele stated that the economic recovery has been assisted by the expansion of over four million farmers, SMEs, and manufacturers who are building and developing enterprises that are enabling growth in manufacturing and ICT due to increased loan access.

According to him, financing to manufacturing has climbed from 10% in 2014 to 16% in 2021, while loan to agriculture has increased from 3% in 2013 to 6% in 2022.

The CBN governor, who was a special guest at the forum, stressed the critical role of banks and financial institutions in enabling more inclusive growth of the economy following a series of external shocks that had confronted economies globally in his remarks on "Food Security, Job Creation, and the Role of the Central Bank."

He also said that central banks and the financial system play crucial roles in driving solutions to the African continent's food security and job development concerns.

"When I took office as Governor of the Central Bank of Nigeria in June 2014, I said that my ultimate goal as Governor would be to ensure that the CBN is known for being a people-focused central bank, with decisions made at the MPC having a direct impact on the lives of our people," Emefiele said.

"This goal was motivated by some of the fundamental difficulties confronting the Nigerian economy, one of which was our strong reliance on income and foreign exchange profits from crude oil sales."

"Close to 60% of government income and 80% of our foreign exchange gains comes from the sale of crude oil," he stated, despite the fact that the petroleum industry accounts for less than 10% of our GDP.

"Our reliance on crude oil profits created an undue reliance on imports, which hampered growth in important areas of our economy such as agriculture and industry."

"It also exposed our economy to the volatility associated with changes in crude oil prices in global markets." He continued.

He bemoaned that, despite their importance, sectoral credit allocation remained low in comparison to lending to the oil and gas industry, which stood at close to 29% in 2014.

Credit to the manufacturing and agricultural sectors, on the other hand, was at 10% and 3%, respectively, according to him.

Emefiele remarked, "we were aware that if the required assistance was provided to families and companies, such as enhanced access to financing and better infrastructure, these measures would raise productivity and help in permitting larger direct investment flows into our economy."

"As a result, there was a growing recognition on the need to adjust our monetary policy tools and regulatory framework to make them more responsive to the needs of the Nigerian population," he said.