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By Abdullahi Isa
The Agricultural sector was the main stay of the country’s economy prior to the discovery of oil. It financed most of the nation’s infrastructure beginning from the colonial days even up to the immediate post-independent Nigeria. It is important to recall the groundnut pyramids, the cotton, ginger and so on in the Northern parts of the country. Similarly, cocoa and oil palm played their own roles in the Western and Eastern parts of the country.The railways, the three pioneer universities: Ahmadu Bello in Zaria, University of Nigeria at Nsukka and Obafemi Awolowo in Ife all owe their existence to the resources generated by the agricultural sector. The airports in Kano, Kaduna, Lagos, Enugu and Port Harcourt, to a large extent, were show pieces of what agriculture can do to the economy of a nation.
In between can be seen the impact of the sector in education, health, foreign affairs (if one remembers that it played key role in bilateral relations between Nigeria and Malaysia. That country picked its first fruits of oil palm nuts from Nigeria). According to the Central Bank of Nigeria in 2016, the sector in the 1960’s contributed 85 per cent of the Nigeria foreign exchange earnings, 90 per cent employment generation, and about 80 per cent to gross domestic product (GDP). Available data also confirms that at independence in 1960, the contribution of agriculture to the GDP was about 60 per cent, which is typical for developing agrarian nations. Suddenly the bubble burst and the sector that used to e the largest employer of labour was abandoned as attention was shifted elsewhere by the easy money from hydrocarbons. Nigeria moved from a net exporter of agricultural produce to a net importer of all manner of agricultural products including rice and palm oil. That anomaly, for that is what it actually is, has been reversed by the futuristic policies of Godwin Emefiele who, as Governor of the Central Bank of Nigeria (CBN) made the point clear that the drift must end. He breathed life to the Agricultural Credit Scheme earlier established in 1977 and expanded it in a manner that agriculture began, again, to attract the attention of the people especially high net worth individuals and corporate bodies, who bought into the CBN drive towards agriculture as a business. Today, the Agricultural scheme, as part of the development finance objectives of the CBN, has a capital of N50 billion and is rapidly boosting the sector with farmers entitled to loans at single digit interest rate. The Scheme which comes on three forms: the Agricultural Credit Guarantee Scheme Fund, ACGSF and the Agricultural Credit Support Scheme, ACSS and Commercial Agriculture Credit Support Scheme, CACS provide various forms of credits, loans and grants to qualified farmers through commercial banks.
In the light of the progressive nature of Nigeria’s central banking under Emefiele, the development finance interventions straddle the following broad sectors: Agriculture; Micro, Small and Medium Enterprises (MSMEs); Manufacturing; Energy and Infrastructure; Health and Export. The cumulative disbursements on the seven broad sectors from 2009 to February, 2022 stood at N8.27 trillion with manufacturing, energy/infrastructure and agriculture accounting for the highest shares. For maximum impact, a number of specific initiatives are to be found in each sector. However, for the purpose of illustration only a few are highlighted here including the The Anchor Borrowers Programme (ABP) and Export Development Facility (EDF). Some initiatives aim at boosting domestic production, non-oil exports, foreign exchange supply and economic diversification while others support the Bank’s mandate directly or indirectly.
Emefiele announced his arrival in the agricultural sector with the launching of the Anchor Borrowers Programme in Kebbi state. The innovative policies he initiated of which the Anchor Borrowers’ Programme (ABP) launched by President Muhammadu Buhari in November 2015 is one, have triggered a revolution in the value chain of selected crops, especially rice and maize. This novel development finance intervention scheme ensured that Nigeria emerged from being a net importer of rice to becoming a major producer of the commodity, supplying key markets in neighbouring countries. Today, the country produces nine million metric tonnes of rice per annum, enough for the country to even export. Statistics reveal that the programme has so far financed over 3.1 million farmers, most of them in Jigawa state, to the tune of over N492 billion for the cultivation of 3,801,397 hectares across 21 commodities through 23 Participating Financial Institutions in the 36 states of the Federation and FCT. In terms of job creation, the programme has generated over three million direct and indirect jobs across the agricultural value chain. The Anchor Borrowers Programme (ABP) was introduced to boost local production of key agricultural commodities in order to reduce food importation and conserve foreign exchange. The programme also helps in reducing the demand pressure in the foreign exchange market by importers of these agricultural products thereby contributing to naira exchange rate stability just as increased agricultural output aids price stability. As at early 2022, the Programme had disbursed N948 billion to 4,478,381 smallholder farmers who cultivated 5.2 million hectares of farmland across the country, thereby creating 12.5 million direct and indirect jobs. Importation of rice has significantly reduced just as the associated foreign exchange demand. The Programme has significantly boosted job creation and economic diversification.
In places like Jigawa state, the Anchor Borrowers Programme has immensely influenced agricultural policy of the government of the state. Through it, the state has been able to establish clusters of rural farmers and enabled them to cultivate up to14,350 hectares through the direct support of the Central Bank of Nigeria. Those who participated in that cluster arrangement today are rich enough from the yield they garnered so as to be able to work without any support from the government. Then the state moves on to another cluster in that arrangement until all farmers’ benefit. Similarly, agribusiness/ Small and Medium Enterprises Investment Scheme (AGSMEIS) has also benefitted most farmers in the state who took advantage of it to enhance their farming operations. The scheme is the initiative of The Bankers’ Committee driven by the Central Bank of Nigeria that aims to support the federal government’s efforts and policy measures for the promotion of agri-businesses and small and medium enterprises (SMEs) and which serves as a vehicle for sustainable economic development and employment generation. It is on record that N135.58 billion was disbursed under the AGSMEIS while 37,646 agribusiness and artisanal projects were financed across the country. 107,932 direct and indirect jobs were created. Besides other impacts, the initiative boosted the productive capacity of the domestic equipment fabrication industry across the country. The Central Bank of Nigeria has also emphasized the need for a stronger relation between other sectors of the economy with emphasis on the banking sector and the agricultural sector in other to have an improved performance and policies to enhance the relationship.
Emefiele has continued to stress the need for continuity and perpetual implementation of agriculture development policies by the current and future administration for the impact of the policies to be felt in Nigerian economy. The bane of the sector has always been the inconsistency of regional agriculture development policies with the national policies. In this light, it is necessary that new agriculture policies and programmes like the Anchor Borrowers should be consistent, work in harmony and closely with state and national policies and programmes. The good relationship and peaceful atmosphere so far generated by the ABP will always ensure the success of agricultural policies, programme and consequent agricultural development. ABP will always be a benchmark, indeed, a reference point in any future articulation of policies aimed at brimging about the best in the sector.
Isa is an Agro-businessman
based in Jigawa State
