The Bankers’ Committee has disclosed plans by the Central Bank of Nigeria (CBN) to commit N1.7 trillion intervention funds into five agric sector projects to support government’s economy diversification agenda.
In a statement at the weekend, the committee said the funds, disbursed through commercial banks, were meant to stimulate development of various agricultural value chains from primary production to market access with multiplier effects on the economy.
It also called for continuous awareness around Nigerian banks’ efforts and most importantly educating the public on available opportunities and gains of active participation in the ongoing efforts to support government’s drive to diversify the economy.
The committee said the scheme also highlights its commitment to CBN’s economy diversification project. The funding plans, it added, would also support small, medium and commercial/large scale agriculture and help government achieve its economy diversification plans.
The committee listed some of the schemes under the CBN’s intervention plans as the Agricultural Credit Guarantee Scheme (N69 billion), Commercial Agricultural Credit Guarantee Scheme (N200 billion), the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (N200 billion), and Small and Medium Enterprises Credit Guarantee Scheme (N200 billion) among others.
It explained that aside the funds created by the CBN, the Deposit Money Banks (DMBs) have also set up agriculture desks in their respective organisations signalling a renewed commitment to support and sustain the growth of the sector.
The committee report also said the Nigerian banking system plays the important role in promoting economic growth and development through the process of financial intermediation. “One of the more recognised ways of creating jobs, reducing poverty and achieving economic growth and development is by the timely extension of credit to the agricultural sector through the activities of Deposit Money Banks (DMBs),” it said.
“The agriculture sector contributed 22.5 per cent to Nigeria’s overall Gross Domestic Product (GDP) in the second quarter of this year and real agricultural GDP growth for the period was 4.53 per cent (year-on- year), data from the National Bureau of Statistics (NBS) showed”.
Continuing, it said the Commercial Agriculture Credit Scheme (CACS) showed that tremendous progress has been recorded under the scheme. For example, from inception in 2009, a sum of about N266.025 billion has so far been released to the economy through 20 participating banks funding about 347 projects.
“The analysis of the number of projects financed under CACS by value chain showed that out of the 347 CACS-sponsored projects, production accounted for 57.06 per cent while processing accounted for 33.14 per cent, followed by marketing, storage and input supplies. A total of 29,046 jobs were also created comprising of 11,717 direct and 17,329 indirect jobs. Also, five out of the 310 private projects are owned and managed by women,” it said.
The committee said Union Bank of Nigeria and United Bank for Africa (UBA) are some of the banks that have demonstrated huge commitments to agricultural financing, with both offering agricultural micro-loans to farmers in the country.
“Union Bank has over a sustained period of time provided revolving micro credit to rural farmers as a means of driving investment in the agriculture sector while UBA in 2009, floated the largest private sector funding scheme of N50 billion to support agriculture and agro-processing industries in Nigeria and targeted at all segments of the agriculture chain, from small and medium scale farmers to large, industrial farming projects in poultry, fishery, crop cultivation, production, plantation, farm machinery, and hire services,” it said.