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The Governor of the Central Bank of Nigeria (CBN), Mr. Godwin Emefiele has asked banks in Nigeria to consider increasing the percentage of loans available to the agriculture sector to 10 percent by 2024.
Emefiele advocated for a spike in the current four per cent.
This comes on the heels of optimism by Minister of Finance, Budget and National Planning, Mrs. Zainab Ahmed that the Nigeria economy will bounce back strongly within the near term with the right policy responses to the multidimensional crises occasioned by the COVID-19 pandemic.
The CBN governor while delivering an address at the opening ceremony of the 13th Annual Banking and Finance Conference said the sum of N69 billion had so far been disbursed to over N140,000 beneficiaries from the N100 billion CBN COVID-19 support loans for households and MSMES.
The conference which was organised by the chartered Institute of Bankers of Nigeria (CIBN) was themed, “Facilitating a Sustainable Future: The Role of Banking and Finance.”
He disclosed that the CBN had disbursed about N255 billion to manufacturers from the N1 trillion invention fund while N145 billion had also been shared to pharmaceutical companies out of the N100 billion intervention fund to reduce the impact of the pandemic on the economy.
“If measures had not been taken earlier to improve cultivation and processing of staple crops in Nigeria prior to the onset of the pandemic, we would have had to deal with a major food crisis in the country. The banking sector, therefore, has a significant role to play as a facilitator of growth through its intermediation function.
“Over the next four years, the banking sector should consider ways under which it could increase its loans to the agriculture sector from four per cent to 10 per cent by 2024,” he said.
According to the CBN head, the agric sector also offers significant opportunity for the nation to earn foreign exchange through the exports of processed agricultural products, stressing that with declining forex earnings from crude oil, banks should consider supporting agro-processing companies that are export-oriented.
He said, “These measures would help to improve the productivity of farmers, increase our foreign exchange earnings, reduce post-harvest losses, increase access to finance for farmers while supporting the growth of other sectors of our economy such as manufacturing, and transportation.”
This post was written by Obiajulu Joel Nwolu.
The views expressed here belong to the author and do not necessarily reflect our views and opinions.