The House Representatives has appealed to the Central Bank of Nigeria (CBN) to increase agricultural lending by three billion dollars to reduce risks in agribusiness in the country.
This followed the adoption of a motion moved by Uchenna Harris Okonkwo from Anambra who pointed that low capital investment and insufficient funding of agricultural production as major contributors to the ailing economy of Nigeria, severe impoverishment across the nation, and increase in hunger.
Okonkwo noted that in 2011, CBN launched and incorporated the Nigeria Incentive Based Risk Sharing System for Agricultural Lending (NIRSAL) as a dynamic, holistic $500 million public-private initiative to define, measure, price, and share agribusiness credit risk.
He pointed that the agricultural sector, which accounts for 40% of the nations’ Gross Domestic Product (GDP) and provides for over 60% of employment, has experienced slower growth recently and is underperforming despite enormous potential.
The lawmaker added that to reverse the trend, there is need to tackle the challenge of under financing of agricultural value chains by providing NIRSAL with additional 3 billion Dollars for lending to agricultural value chain actors in Nigeria.
After adopting the motion, the lawmakers urged CBN to increase agricultural lending by banks from 1.4–7% of total lending within the next five years, ensure 50% of lending to Small holder Farmers through Microfinance Institutions, Farmer Cooperatives, and the value chain commodity association at an interest rate of 7.510.5%.
They also mandated the House Committees on Banking Regulations and Agricultural Production and Services, Nutrition and Food Security, and Finance to monitor compliance and report within four weeks for further legislative actions.