Growth In Agriculture Remains Weak Despite Multiple Financing Schemes

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Monday, September 30, 2019 / 10:42AM / CSL Research/ Header Image Credit: @cenbank

 

Speaking at the recently concluded Abuja International Trade Fair, the Director, Corporate Communications of the Central Bank of Nigeria (CBN), Mr. Isaac Okoroafor disclosed that a total of 255 private and 14 state government anchors had participated in the Anchor Borrowers' Programme (ABP) of the CBN as at June 2019. According to him, ABP has benefited 1,140,854 million farmers in 17 different agricultural commodities. The director further revealed that a total of 1,132,260 million jobs had also been created along the agricultural value chain under the Commercial Agricultural Credit Scheme (CACS). 

 

The ABP and CACS are schemes set up by the CBN to enhance the flow of affordable finance and investments into the agricultural sector to stimulate the growth and development of the sector. Despite series of intervention funds injected by the CBN, growth in the agricultural sector has remained underwhelming. The agricultural sector grew by an average of 3.42% in 2017, lower than the 4.05% average growth recorded in 2016 when the economy was in recession. Latest data from NBS revealed that the growth in the sector slowed down to 1.79% in Q2 2019, lower than 3.17% in Q1 2019.

 

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In our view, the lacklustre growth in the sector is due to the long standing structural issues such as poor infrastructure, adoption of obsolete farming techniques and poor distribution networks, that have hindered the productivity of the sector. In recent times, the challenges in the sector have been exacerbated by conflicts in food producing regions in the form of communal clashes between Farmers and Herdsmen- a precarious situation that has caused many farmers to desert their farmlands.  


 

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Proshare Nigeria Pvt. Ltd.

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