Nigeria: Central Bank Chief Emefiele Targets 10% Increase in Agriculture Funding by 2024

The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele, has predicted 10 per cent increase in credit to the agricultural sector over the next two years.

He also said about $2 billion out of about $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) under the Anchors Borrowers’ Programme (ABP).

Speaking at a dinner session with the board of the United Bank for Africa (UBA) in Abuja over the weekend, he noted that over 80 per cent of the fund was targeted at the agricultural sector.

Also, the Chairman, UBA Group, Mr. Tony Elumelu, revealed that the private sector coalition has put together the sum of N100 billion to help fight insecurity and boost the capacity of security agencies, to be able to deal with the issues challenges facing the country.

Emefiele said following the intervention programmes embarked upon by the central bank since his assumption of office, the initiatives have helped farmers to significantly improve their yields and contributed significantly towards Nigeria’s journey towards food self-sufficiency.

He said, “For example, we have seen the re-emergence of the rice pyramids. Rice production has increased to over 7.5 million metric tons yearly, from less than four million metric tons recorded in 2015, prior to the introduction of Anchor Borrowers Programme (ABP).

“There were only 15 standard rice mills in Nigeria before the launch of the Anchor Borrowers Programme. As at today, we have over 50 standard and integrated rice mills creating jobs and reducing unemployment.

“All these were done in partnership with deposit money banks who serve as our identification, risk appraisal and distribution mechanism for these interventions.”
Emefiele said economic recovery had been aided by the growth of over four million farmers, Small and Medium Enterprises (SMEs) and manufacturers who are creating and growing businesses that are enabling growth in manufacturing and ICT due to improved access to credit.

He said credit to the manufacturing had risen from 10 per cent in 2014, to 16 per cent in 2021, while agriculture also witnessed growth in credit from three per cent in 2013 to six per cent in 2022.

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

Specifically, he pointed out that central banks and the financial system have critical roles to play in powering the solutions to the issues of food security and job creation on the African continent.

Emefiele said: “On assumption of office as Governor of the Central Bank of Nigeria in June 2014, I indicated that my ultimate objective as Governor would be to ensure that the CBN is noted for being a people focused central bank where the decisions taken at the MPC must be those that impact directly on the lives of our people.

“This objective was driven by some of the key challenges facing the Nigerian economy, one of which was our heavy reliance on revenues and foreign exchange earnings from the sale of crude oil.”

He said: “Close to 60 per cent of government revenues and 80 per cent of our foreign exchange earnings came from the sale of crude oil, even though the petroleum sector represents less than 10 per cent of our GDP.

“Our dependence on earnings for crude oil fueled an excessive dependence on imports, which came at the expense of constraining growth in critical sectors of our economy such as agriculture and manufacturing.

“It also exposed our economy to volatilities associated with changes in the price of crude oil in global markets.”

Emefiele noted that with an annual population growth rate of close to 2.8 per cent, it was important that all efforts are concentrated at ensuring that employment opportunities were available for Nigerians particularly in sectors that had the ability to absorb key segments of the growing population, particularly agriculture and manufacturing, which represented 10 per cent and 27 per cent of GDP respectively in 2014.

He lamented that notwithstanding the relevance of these sectors, sectoral credit allocation remained low relative to credit to the oil and gas sector, which stood at close to 29 per cent in 2014.

According to him, in contrast, credit to the manufacturing and agricultural sectors stood at 10 per cent and three per cent respectively.

Emefiele said given the country’s population of over 200 million along with favorable youth demographics, “We were aware that if the necessary support was provided to households and business such as improved access to finance, and better infrastructure these measures would boost productivity, and help in enabling greater direct investment flows into our economy.”

He said: “As a result, there was a growing recognition on the need to refine our monetary policy tools and regulatory framework in order to ensure that it was more responsive to the needs of the Nigerian populace.

“It was important that this new framework enabled the flow of credit by financial institutions to critical sectors in order to aid our efforts at driving productive activities and creating job opportunities for our growing population.”

He stressed that investments in agriculture and related sectors, distribution storage systems, and necessary market infrastructure remained critical to building a cost-effective, viable and sustainable food system in Africa.

He, nonetheless, encouraged the management of UBA to build on the gains recorded by providing access to credit and supporting small businesses in these critical areas with funding and technical assistance.

He said: “Given the extent of your branch networks across Nigeria and indeed in Africa, I believe that you can leverage on your knowledge of the local economy to lend to households and businesses as well as provide tailored products and services that meet the needs of your customers in these critical sectors.
“By providing support to them you are also enabling communities to thrive.

“As we all work together in supporting these critical sectors, it would mean more jobs and greater economic growth in our Communities.
“It also ensures that not only do we continue to grow our economy, but that growth is broad based and inclusive.
“Again, the journey to the Africa of our dream must be a collaborative one where all play our parts.”

Elumelu, in his earlier remarks, explained that the private sector believed well- armed security operatives would go a long way in helping to assure on security of the nation.

He noted that it was under the COVID-19 pandemic that some Nigerians realised what the private sector could do under the leadership of the CBN governor.
He said, “I think the most important thing was the move we made to open up the Nigerian economy once more.

“We made a strong move. We have no option; the economy would crash if we don’t do so. And there was so much pressure on the government.”

He commended the act of patriotism displayed by the private, including the banks in acting with a sense of urgency to save the country from the brinks at such a demanding period.

 

James Emejo in Abuja

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