Abuja - The Minister of Agriculture, Dr Akinwumi Adesina, has commended the Central Bank of Nigeria (CBN) and some commercial banks for their lending policy to grow agricultural production in the country.
Adesina gave the commendation on Thursday in Abuja at a breakfast meeting with the CBN Governor, Malam Sanusi Lamido Sanusi, and some Managing Directors/ Chief Executive Officers of some commercial banks.
Sanusi was represented by the Deputy Governor, Financial System Stability, Kingsley Moghalu.
“The partnership between the Central Bank of Nigeria and the Federal Ministry of Agriculture is moving the agriculture forward in this country.”
“We started two years ago and I think it is having significant input in this country; so, I want to thank the Governor of Central Bank of Nigeria for the tremendous job he did to lunch the Nigerian Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL).”
The programme was put together by the Federal Ministry of Agriculture and Central Bank of Nigeria to engender the growth of the agricultural sector.
Adesina noted that banks had increased lending to the agricultural sector to about N20 billion this year compared to the N3.5 billion for 2012.
The minister said that between 1980 and 2010, the Federal Government and the state governments spent N873 billion on fertiliser subsidy, saying that about N776 billion was lost to corruption.
He added that through the Growth Enhancement Support (GES) scheme, 40 years of corruption in that sector had been laid to rest as only agro-companies now sell commodities to farmers.
Sanusi explained that part of the CBN’s reforms was aimed at encouraging financial institutions to lend to grow the economy, adding that the CBN was out to build an economy that would be production-based.
“The Central Bank’s reforms are based on four pillars; to enhance the quality of banks, to establish financial stability, to facilitate a healthy financial system and to encourage banks to lend to the low economy. That is where agriculture comes in.”
“We are the Central Bank of a developing country and so it is not enough to work on monetary policy or banking supervision.”
He said CBN had to make sure commercial banks contribute to making the country’s economy to become “a solid strong economy that is not based on rent and rent-seeking but based on production of food, industrial manufacturing and agro-processing.”
He said it was remarkable to see lending to agriculture double in the last one year through the risk reduction programme of the apex bank.
The Chief Executive Officer of Mainstreet Bank, Ms Faith Matthews, lauded the programme.
“This is a programme we have supported; we see it as good business and we have actually keyed into it; our experience has shown that indeed it is good for business.”
“Of the total of about N20 billion, we have contributed N10 billion as an institution which is 50 per cent of the total contribution to this programme.”
“Agriculture is a sector that engages more than 70 per cent of Nigerians, supporting it is creating jobs, wealth and ensuring food security for the country,” she said.
NAN reports that commercial banks that had lent to agriculture and were represented at the event are Access Bank, Diamond Bank, Enterprise Bank and First Bank.
Others are Starling Bank, United Bank for Africa, Bank of Agriculture, among others.