Analysts at United Capital Research have, in a critical examination of the billions of naira interventions invested by the fiscal and monetary authorities to rescue Nigeria’s agriculture, declared that there is a need for Nigeria to invest in the training and education of farmers, storage facilities and transportation network, in a bid to facilitate the movement of agricultural produce to the market from the farms.
The research house, in a note to Business A.M., asserted that the investments will help boost agricultural yields and meet the rising demand gap in the food supply chain. “We reiterate that Nigeria must invest in the training and education of farmers, invest in the procurement of more storage facilities, and transportation network to facilitate the movement of crops from farm to market, as well as research and development to boost agricultural yield,” they asserted.
In the last five years, the Central Bank of Nigeria (CBN) and the federal government have been pumping billions of naira into the nation’s agricultural space in a bid to boost productivity and also meet the rising demand for agricultural produce. Similarly, since the inception of the Anchor Borrowers Programme (ABP) in 2015, a total of N190 billion has been disbursed under the scheme.
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To this cause, the scheme is proposed to be the largest ever in the history of the borrowers’ programme with loans worth N432 billion expected to be disbursed to over one million farmers across the country. In addition to the above, the CBN has also announced a reduction in all intervention fund for the Agric sector from 9.0 per cent to 5.0 per cent as well as a moratorium on all Bank of Agriculture (BoA) loans to players within Nigeria’s agricultural space.
The above notwithstanding, agriculture sector output growth, though resilient, has weakened significantly. Recently, the National Bureau of Statistics (NBS) released the inflation figures for September 2020. Notably, food inflation sub-index rose from 16 per cent year on year in August 2020 by 66 basis points to 16.66 per cent year on year in September 2020; reaching the highest since March 2018. Clearly, it can be seen that the unrelenting increase in food prices reflects supply shortfall in the system amid the border closure and rising demand.
But, despite the intervention efforts by the authorities, the domestic food supply has remained below demand, thus hurting prices. While a concerted effort by both the fiscal and the monetary policy authorities in Nigeria must be commended, an impact assessment of government intervention funds on the agricultural sector will out rightly provide an insight into what is really going on. For the United Capital research analysts, they are of the view that except the structural and strategic challenges confronting the nation’s agriculture sector are resolved, the inefficiencies in the sector are unlikely to disappear overnight.