Despite the federal government efforts to stimulate social-economic development through agriculture – with various intervention programmes such as the Anchor Borrowers Program, the Targeted Credit Facility (TCF), and Agricultural Credit Guarantee Scheme among others, the sector is still largely below its potentials, an FBNQuest note said.
According to the note, the sector which grew by 1.2 percent in the third quarter of 2021 and contributed 30 percent to the country’s GDP for the period has grown by an average of 2 percent in the last eight quarters which is still below population growth rate of 2.7percent.
“Despite significant credit interventions by the CBN and state-owned development banks, the sector continues to underperform,” the note stated.
In its last Monetary Policy Committee (MPC) meeting in 2021, Nigeria’s Central Bank said it has disbursed N43.2 billion under the Anchor Borrowers Programme to farmers between September and October to support the cultivation of maize, soybeans, and rice.
The apex bank also disbursed N5.9 billion to finance six large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS), and N41.2bn for the commencement of the brown revolution – a large-scale wheat programme to reduce the importation of the grain by 30percent.
Similarly, the African Development Bank board of directors recently approved a $210 million (N86.3 billion) loan to co-finance the first phase of the country’s Special Agro-Industrial Processing Zones which is intended to augment certain value chain commodities in seven states and the FCT.
Despite all these investments and interventions, Africa’s biggest economy is yet to scale its food production to feed its rapidly growing population and make the sector a major source of revenue and foreign exchange earner.
“These investments and interventions are good news for the agricultural sector and the country. However, the benefits are being hampered by challenges such as the persistent insecurity in food-producing areas of the economy,” said the note.
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The country’s agricultural activities have been greatly impacted by insecurity as farmers in Africa’s most populous country had to abandon their farmlands owing to escalating issues of kidnapping, banditry, and terrorism in major crops-producing states.
“I have not visited my 1,000 hectares farmland in Katsina state since last year owing to the activities of bandits and kidnapping in that area, so how can we feed ourselves and record growth in the sector if farmers are abandoning their farmland?” asked Ibrahim Kabiru, national president, All Farmers Association of Nigeria (AFAN).
“The government must provide adequate security if we are to increase our food production and halt the current rising cost in food prices,” Kabiru said.
The FBNQuest note cited the country’s huge post-harvest losses as another challenge limiting the sector’s potential.
“It was disclosed at the 3rd ECOWAS Agriculture Budget Summit held recently that annual post-harvest losses in Nigeria amount to 51 percent of total food supply in West Africa. In monetary terms, these losses were estimated at N3 trillion annually.”
“The underlying reason for this is the sector’s poor storage culture, very limited farm mechanisation and logistics challenges,” said the note.
