Nigeria needs N1trn to bridge lending gap in agric sector —NABG

The Nigerian Agriculture Business Group (NABG) has said for the Nigeria’s agricultural sector to take its prime position as the main stay of the economy, it needs about N1 trillion to bridge the lending gap targets for financing agriculture, food and beverage industry.

The chairman of the NABG, Sani Dangote, who made the proposal in Abuja during the group’s presentation of an Implementation Partnership Proposal to the Minister of Agriculture disclosed that the N780 billion made available for agriculture lending was not adequate enough to increase the country Gross Domestic Product (GDP)

A breakdown of the figure revealed that about N350 billion is made available for agricultural funding by the Deposit Money Banks and the Nigeria Incentive Risk Sharing for Agricultural lending (NIRSAL), while the Micro Small and Medium Scale Enterprise (MSME) made available N220billion for the sector, the Commercial and Agricultural Credit Scheme of the Central Bank made available N200 billion, from the Bank of Agriculture and Bank of Industry the agricultural funding is N120billion and the budget for the sector is about N76billion.

Dangote said to resolve the agricultural financing constraints, all government intervention funds must be channelled through Bank of Agriculture, Bank of Industry and NIRSAL Guarantee Schemes for Agricultural Commodities Value Chain Financing.

He pointed to revitalise of agriculture financing, there is an urgent need to recapitalize and Partially Privatize BOA alongside recapitalize NIRSAL to de-risk value chain lending.

The group further urged government to arrange farmers into clusters so as to able them have access finance and the private sector can easily work with them providing them with irrigation facilities, storage facility, linking them to market opportunities through government support.

Stressing the need for a strong public-private implementation partnership to jump start the policy and legislative reforms in support of the Green Alternative between 2016 to 2019, he said that it is expected that N3.1 trillion agricultural funds would be made available at 5 percent interest rate by the end of the project.

He noted it is expected that about 38,700 farmers’ co-operatives would have been established across the 774 Local Government Areas and about 3.8 million hectare of farm land would be put under cultivation at two crop cycles per year.

The minister of Agriculture and Rural Development, Audu Ogbeh commended the NABG for their inputs into the Agricultural Promotion Policy (APP) saying it was a timely intervention and all their proposition would be carefully looked at and government would fashion out ways of working with them.

He has constituted a committee to look into some of the recommendation, maintaining that government would only concern itself in making favourable policies that would help the private sector to grow and develop.

He said with the way small scale farmer are scattered across the country it may not be possible to arrange them into clusters but the government is looking at developing new crops of farmers that can be structured into clusters.

Meanwhile, the governor of Kebbi State Ibrahim Bagudu has suggested that N1 trillion out of the N5 trillion pension fund should be channelled into agriculture in order to revamp the sector.

He said that is this is done, it will help increase the pension money as a way of interest payment from farmers, and food production will increase thereby providing enough food for the pensioners.

Governor Bagudu, who made this known in Abuja further said that workers and pensioners in Nigeria wants agriculture to grow and prices of food reduced, then using part of pension fund as a way of borrowing in agriculture, is partly justified.

According to him “the Nigerian agribusiness group made mention N1 trillion needed in agriculture, I agree with that because when you take an average farmer who needs N50,000 or N100,000, by the time you calculate for 10 million farmers, that is almost to that amount.

“And the good thing is that when you give them that money, they will produce and pay back the loan, so it is a win-win situation and what I said is that we have about N5 trillion pension fund, so if we borrow from it and invest in agriculture so  that we provide enough to feed ourselves and probably sell to other countries.

“The worker and pensioners in this country wants agriculture production to take place, they want better crop, they want lower crop price, so if we are to use that, it is partly justified, but I believe that there are other sources.”