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Agribusiness to Get $6.5 billion Annual Support

By on October 17, 2012

Agric Minister, Akinwunmi Adesina

 

The Central Bank of Nigeria (CBN) and banks are working on the implementation of new plans aimed at helping farmers financially, and making available encouraging fiscal policies for their operations.

CBN said the Agribusiness sector needs encouragement and the moves would secure more funding for the sector, adding that to take agribusiness to the desired level, an investment of $6.5 billion is needed yearly, opposed to the present annual supply of $1.5 billion

To further buttress the idea, the CBN had fixed zero tariffs for the importation of agricultural machinery and equipment. It is necessary to provide an enabling environment for agribusiness to grow, the banks said.

CBN Director, Development Finance Department, Paul Eluhaiwe, disclosed that banks have all along been working on developing a new financing mechanism, known as Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL).

He said, the Alliance for a Green Revolution in Africa (AGRA) and other key stakeholders are working hand in hand with the banks to make it work.

The plan is likely to provide farmers with reasonable financial products, while lessening the risk of loans to farmers under other financing programmes presented by institutions, he said.

The scheme will build capacities of banks to increase borrowing to agriculture, set up risk sharing mechanisms to lessen risks of lending and put together a bank evaluation scheme to measure banks based on their lending to the agricultural sector. The scheme will likely help unbolt access to bank finance, vital for inspiring agric lending, add food, and crop production in the country.

The banking supervisory body confessed that the hope of agricultural development in sub-Saharan Africa is clouded with numerous worries that comprise increasing resource shortage, climate uncertainties, elevated energy prices, and demand for bio-fuels as well as doubts about the speed of industrial growth.

According to the Head of Agricultural Banking, Stanbic IBTC, Jacques Taylor, financial services, access to agricultural input, technical support services, and market linkages are very important in energizing the nation’s bedridden agriculture sector. He said this in during an interview in Lagos.

Value chain financing will guarantee the course of financing inside the agricultural sector, across all value chain actors, in so doing get agricultural products to the markets, he added.