- Agric Sector, Others to Attract N1.8tn Investments from NIRSAL
The Nigeria Incentives Risk-based Sharing for Agricultural Lending is working at mobilising a total investment of $6bn (N1.83tn) annually into the agricultural value chain as well as other sectors of the economy.
The Managing Director, NIRSAL, Mr Aliyu Abdulhameed, said this in Abuja on the sidelines of the first Annual NACCIMA-NIRSAL agribusiness and policy linkage conference.
NIRSAL is an agency set up by the Central Bank of Nigeria to provide guarantee for banks’ lending to agricultural value chain.
The conference had as its theme ‘Implementing the agriculture component of the Economic Recovery Growth Plan’.
Abdulhameed said the need to mobilise investment for the agricultural value chain was born out of the conviction that it would assist the government achieve its objective of increasing annual agricultural growth from 4.1 per cent to 8.3 per cent by December 2020 as contained in the ERGP.
This, he added, would represent an average growth rate of 6.9 per cent across the three year plan period.
He lamented that while the country is endowed with abundant natural resources, there was insufficient capital to actualise this potential.
He said, “We are naturally endowed with land, water, climate and the market and at very competitive level, but we lack the full capital to actualise these opportunities. In order to leapfrog the development as desired by the agricultural sector, fully identified actors have to be attracted into Nigeria.
“At the heart of its functions is its role in facilitating and increasing the flow of commercial revenue and investment in agriculture and fixing the broken value chains which are impediments in achieving increased financial investments. The objective is to raise commercial bank lending and other investments from three per cent as it is today to about 10 per cent by the year 2026. We want to see how we can mobilise up to $6bn annually into the Nigerian business sector.’’
Giving the reason why the agricultural sector was underperforming, Abdulhameed said that despite the natural talent and large domestic market, Nigeria was generally lacking in four critical areas, which he listed as technology, equipment, human/intellectual capacity and finance.
He said, “Statistics show that Nigeria has only 6.5 tractors available per 100sq.km compared to global average of 200. Bank lending to agriculture is less than five per cent of total lending at interest rates as high as 25 per cent. Agricultural practices and methods are still very crude and the country lacks modern technologies and infrastructure for logistics, storage and processing.”
He added that NIRSAL was in partnership with NACCIMA to promote strategic approaches in solving endemic challenges that appeared in the process of increasing agricultural financing.