Evolving economic boost via enhanced lending to farmers

Pure banking principles partly entail funds mobilization from areas of abundance and deployment to areas of great need as fiscal intermediation services of financial institutions.

One of such areas where funds are needed to fast track the nation’s economic and industrial evolution, is the agriculture sector. This is achieved through higher volume of food and cash crops productions to meet domestic needs and generation of foreign exchange through export of surplus products, as well as value added products derived from produce value chains.

Agriculture remains sustainer of the Nigerian economy without oil, with farm produce abundant in all states across the country, yet limited preservation and processing capacity has continued to mitigate economic growth occasioned by colossal losses and wastages.

The Nigerian agricultural sector lacks requisite organisation and drive to take its challenge to the door steps of financial institutions, thus frustrating every effort at further swelling scope and productivity. However, the future and hope farm holds for the nation’s economy, triggered Nigeria’s most valuable bank (First Bank Limited) to have recently converged over 2000 farmers, agro/ allied industry operators, financial institutions, governments and other stakeholders, under the same roof at Eko Hotels & Suits Lagos, to articulate ways of enhancing Nigeria’s economy through agriculture.

The fair consisted of three master classes of stakeholder’s engagements. The classes articulated issues on challenges and opportunities in commodity Export, produce processing as well as storage management of farm produce, all of which would position farmers to earn higher, enhance food sufficiency, forex earnings through export and produce value chain.

The gathering which also entailed presentations by the federal and Lagos state governments on agricultural policy, agric exhibition and networking, among other features, revived enthusiasms and hope of regenerating Nigeria’s lost glory in agriculture as well as reengineering the nation’s economy through farming.

Emmanuel Ijewere, one of Nigeria’s eminent businessmen with extensive experience and interests across the banking, finance and agricultural, disclosed at the fair that 2.8 million tons of tomatoes are destroyed every year because of lack of storage facilities.

He disclosed that a train services on March 14th 2017 commences from Kano to Lagos to convey tomatoes to Lagos, a feat achieved after 58 years. The train he said left Kano 9am and arrived Lagos 10 pm.

Dr. Adesola Adeduntan, MD/CEO First Bank of Nigeria Limited, remarked that the bank took the initiative to bring a cross section of Nigerian farmers together, because of their strategic and systemic importance to the nation’s economy.

He said that, as nation builder and key enabler of economic growth, FirstBank through the agric expo, set the pace for discourse on revitalizing the nation’s economy via agriculture and creation of greater value for produce value chain.

Adeduntan said that the agric conference and fair, aligned with the bank’s core strategy of galvanizing thoughts towards rejuvenating the agric business through resourceful diversification that will stimulate sustainable development for business and the economy. “This maiden expo is in demonstration of our continued commitment to finance agric. businesses across the value chain as a foremost Agric-friendly Bank of repute.”

He said that the Nigerian first generation bank will continue to lead initiatives that support the nation’s vision to work with key stakeholders in building an economy driven by agribusiness capable of providing sustained economic growth which meets local food supply objectives, engendering exports, and supporting durable income and more job creation.
Minister of Agriculture and Rural development, Chief Audu Ogbe, declared the fair open and lauded the Bank for commitment to enhancing economy development across the country through increased participation in agriculture, to boost productivity and reduce poverty.

He said that the agric expo[s theme “Reinventing Agriculture for sustainable national development” tallies with federal government’s new policy to lift economy through agriculture, as he commended First bank for endorsing the new policy, as the expo has shown.

While calling on other banks to emulate the bank by taking renewed interest in the agric sector, the minister called for increased lending to farmers at affordable rate, assuring that the government is directing energy to ensure that farmers access loans at about 5 per cent interest rate.

He said that with the federal government’s agric policy contained in the nation’s new agriculture roadmap, risks in the sector has reduced, yield increased while other challenges confronting the sector are being addressed by the federal government, to make the sector more attractive to lenders.

Ogbe said that, the Green Alternative: Agriculture Promotion Policy, 2016-2020.’’ of the Federal Government, is the new fulcrum for economic diversification, inclusive growth and sustainable development in agric sector and enhances local agricultural produce and ability of farmers to secure loans.

According to the minister, the policy is driving increased production of cash and food crops in the country, boosting food sufficiency and enabling increased foreign exchange earnings through export of agricultural products along value chains.
The federal government of Nigeria is focused at ensuring increased production of food and cash crops to enhance local consumption and export, adding that agricultural products such as sheer butter, cashew nut, coconut, cactus among others, provide strong earning opportunities when exported in its finest refined form, different from the raw state.
He decried the rate financial institutions starve farmers of funds, because of high risk classification of the sector “who will lend money to the farmer and at what rate? A rate of between, 18 per cent to 25 per cent is not for the farmer”

He said that high interest rates to farmers should be demystified, and that the farmers have no collaterals, such as houses in highbrow Lekki or VGC to tender to banks “it either we eat well or we starve. The decision is ours, but we cannot afford to starve”

Mr. Ayodeji Balogun, MD/CEO Afex commodities Exchange, said that his findings reveal that banks dread giving loan to farmers because they consider them as high risks. He added that farmers are designing better ways of doing their business to reduce risk of wastages, improves productivity and storage in order to have value for produce and money.

He said that agric plays vital role in the lives of every Nigerian and the nation’s economic development, hence 95 per cent of the sector’s income is derived from farming.

“Lack of consistency in government agricultural policy, research and development as well as storage of food produce mitigate development of agriculture in the country” said Alhaji Sanni Dangote, Executive Director, Dangote group of companies” ”challenge of imported food items have remained the bane of farmers in Nigeria over the years”
“The challenge now is how best to formulate the policy to benefit the large farmers” Dangote said, adding that farms products in Nigeria are challenged by low prices of competing imported alternative brands.
Emmanuel Ijewere, revealed that improved government interest in agriculture and advancement of farming based infrastructures, manifested in the revitalization of the rail system as the first direct rail from Kano to Lagos carrying Tomatoes arrived Lagos 10 pm March 14, having departed Kano by 9 am.
He said that 50 per cent of food products form Nigerian farms are lost on annual basis because of lack of storage facilities leading to los of 2.8 million tons of tomatoes at the cost of N2 million per tons, lost annually due to lack of storage.

Waheed Olagunju, Acting MD. Bank of industry urged farmers to ensure that earnings from their produce is always enhanced by adding value to products , to attract better foreign exchange in the overseas market.“ exporters of primary products are not getting the right value for their export”
He urged farmers to organize their businesses and people to a body fit to attract the much needed incentive form government and banks.

Most of the participants at the exhibition who spoke to Daily Times Nigeria explained that they have been unable to attract any form of financing from either government or banks.

Meanwhile, with easy access of funds to Nigerian farmers, deployed to boost establishment of agro/allied industries, storage facilities and farm yield, Nigeria’s economy as First Bank Limited had envisaged, would blossom and more unemployed Nigerians will find jobs.