Heritage Bank seeks increased govt, banks’ support in Agric sector
Heritage Bank Plc has called on government at all levels and deposit money banks to increase supports in agriculture, as it is the most resilient and vital sector of the Nigerian economy, despite underwhelming investment in the sector.
The Executive Director of the bank, Jude Monye stated this while delivering a paper, titled, “Bank Experience in Lending to the Real Sector (Agric) of the Economy,” at the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) 2018 Chief Risk Officers Forum Retreat, in Lagos, yesterday.
He disclosed that increased focus on the agriculture sector would contribute to the Job creation objectives of the Economic Recovery and Growth Plan (ERGP), as its labour intensive process across the value chain has the potential of creating multiple jobs, create wealth, and increase the sector’s contribution to GDP and foreign exchange earnings.
Meanwhile, Monye stressed that the under-performance of the sector is closely tied; amongst other factors; to poor credit access from banks.
On the part of the government, he decried that Nigeria’s Agricultural research institutes that are established to drive the sector’s business were underfunded compared to India’s.
“The 2018 budget allocates N54bn and N149bn (US$490m) to the agriculture and rural development ministry for recurrent and capital spending respectively.
“Agricultural research institutes have received an average of N28bn (US$90m) annually over the past five years.
The comparable figure for India, with six times the population, is closer to US$2bn,” he stated.
He further noted that the economic recovery and growth plan of the government is heavy on Agriculture and MSMEs as key drivers of the economic diversification plan.
“Successful implementation of the Government’s Recovery Plan provides significant opportunities for entrepreneurs, investors, and financiers – particularly in the Agro-allied Sector,” Monye affirmed.
The Executive Director added that investments in infrastructure (energy and transportation) are supportive of the Agricled growth.
He explained that to explore options for de-risking and unlocking bank lending to the Agric sector so as to develop and position the sector for increased contribution to Nigeria’s GDP and revenues,
there is need to Continue regulatory driven intervention funds to increase access to credit at single-digit rates and long tenors, Improve knowledge of Banks and Bankers on Agric finance and Agricultural Risk Management through focused capacity building and many others.
Speaking at a retreat with the theme, “Achieving Economic Diversification for Nigeria via the De-Risking of Lending to the Nigerian Non-oil Sectors, the MD/CEO of NIRSAL, Aliyu Abduhameed, explained that the value chain financing is one of the major problem facing Nigerian agricultural sector.
