In recent years, the Nigerian Agricultural sector has benefited from varying policy directives from both the Federal Government (FG) and the Central Bank of Nigeria (CBN), as the sector continues to lead the way in Nigeria’s diversification plans.
Specifically, the FG ordered the partial closure of land border with the Republic of Benin in Aug-19 and later extended the blockade to all other land borders in a bid to curb smuggling of agricultural commodities (rice, chicken, fish, and vegetable oil) into Nigeria and further encourage local participants in the sector. Also, the CBN sustained its targeted and subsidized credit to the sector in 2019 as commercial banks credit to the sector remained underwhelming.
However, despite the favourable policies and cheap access to credit, overall sector growth
continues to struggle to shoot above 3.0% level (5- year average growth). This is as insecurity and climate concerns as well as inadequate infrastructures (especially good road network and adequate power supply for storage purpose) continue to frustrate investments in the space. Notably, it was not surprising when media report emerged that out of the 70,000 farmers that benefitted from the CBN’s Anchor Borrower Programme in 2015, only about 200 farmers have been able to settle their loan. Accordingly, we believe the government need to concentrate on creating an enabling environment for businesses rather than banning.
United Capital Research