THE Governor of the Central Bank of Nigeria, Godwin Emefiele, has urged banks to raise the quantum of loans given to the agricultural sector from the current six per cent to 10 per cent.
He said this at the annual banking and finance conference organised by the Chartered Institute of Bankers of Nigeria.
He said that over the next four years, the amount to be given as loans to the agricultural sector would be increased to support the food security programme of the Federal Government.
Emefiele said in view of the negative impact of the Coronavirus pandemic, it had become imperative for the banking sector to increase its support for the agriculture sector.
He said, “We have witnessed the disruptions COVID-19 has had on global supply chains and food supply.
“In some cases, countries like Vietnam, Cambodia and India imposed restrictions on exports of agricultural produce.
“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 ten per cent by 2024.”
He also urged banks to address some of the existing gaps in the agriculture value chains, such as storage centers, transport logistics, and technology platforms, that can enable rural farmers to sell their produce directly to the markets.
More importantly, he said the agricultural sector also offered significant opportunity for the nation to earn foreign exchange through the exports of processed agricultural products.
With declining foreign exchange earnings from crude oil, the apex bank governor urged banks to consider supporting agro processing companies that were export oriented.
These measures, he noted, would help to improve productivity of farmers, increase foreign exchange earnings, reduce post-harvest losses, increase access to finance for farmers while supporting the growth of other sectors of the economy.
Preaident Muhammadu Buhari, who declared the event open, urged banks to key into the economic restructuring framework of government.
Buhari, who was represented by the Minister of Finance, Budget and National Planning, Zainab Ahmed, said the government, working with the regulatory authorities, had stepped forward with various measures to boost the economy.
According to him, some of these monetary, prudential and supervisory measures are in the form of interest rate cuts, higher structural and durable liquidity, moratorium on debt servicing and forbearances on asset provisioning.
The Economic Sustainability Plan, according to the President, is a well thought-out decision taken in consultation with stakeholders and is aimed at striking a balance between protecting the interest of depositors and maintaining financial stability.
Another thrust of the economic blueprint is to preserve the economic value of viable businesses by providing durable relief to businesses, as well as individuals affected by the COVID-19 pandemic.
Going forward, the government, Buhari stated, expected “efficient and diligent implementation of the restructuring measures by banks, keeping the above objectives in mind.”
