Despite being an agrarian society where agriculture contributes significantly to the nation’s Gross Domestic Product (GDP), Nigeria’s funding to the agricultural sector is still less than 5 percent, discouraging banks from seeing farmers as potential customers, experts have said.
Speaking at the second ABC economic update organised in Lagos by the American Business Council (ABC) with the theme, ‘Multisectoral Impact of Emerging Technologies and Best Option for their Adoption,’ Oluwafunto Olasemo, vice president of Financial Market at AFEX, said that the government puts less than 5 percent of the annual budget to agriculture and agricultural policy, which is not driving investment in the sector.
According to her, the poor funding of agriculture by the government has been the major reason banks do not see good reasons to spend or invest in agriculture.
“Government is the biggest spender and the banks, as well as other financial institutions, tend to follow the same dimension. The banks tend to see the farmer as a very risky venture. Meanwhile, the farmer is extremely bankable,” she said.
Olasemo said that a lot of financial services tend to see a farmer as someone that is just cultivating farmland without seeing the farmer as a potential customer that has needs that go beyond the farm to include family, life, and bills to pay.
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While noting that the financial institutions do not see the need to provide an end-to-end service to farmers that encompass all their life, she said that AFEX as a commodity exchange started doing a backward integration, which was part of the necessary building blocks needed to have a viable commodity exchange.
She added that AFEX allowed for the availability of data, accessibility of data, and interpretation of data to enable investors trading in the commodity exchange market to make informed decisions.
Olayinka David West, associate dean, and professor of Information Technology at Lagos Business School, who moderated the session, affirmed that despite being an agricultural society, Nigeria has pockets of smallholder farmers that need financing to grow their businesses.
While noting that there is a need for collaboration in the technology space, she said that Nigerians need infrastructures such as 5G, mobile devices among others, and connectivity for technology to work.
According to her, technology has transformed the workspace by enabling people to work from anywhere in the world.
Oluwabankole Falade, chief regulatory and government relations officer at Flutterwave, sponsors of the event, said that Flutterwave has through simplifying payment for its global customers, exposed African merchants to a global online marketplace to sell goods and services and earn in multiple currencies.
Falilat Jimoh, digital architect manager of the National Information Technology Development Agency (NITDA), pointed out the need to make cyberspace secure for businesses to build on, said there is a need for all to become innovative and technologically inclusive.
