The Nigeria’s gross domestic product (GDP) performance has recorded a slow growth as it declined from 3 per cent in the first quarter to 1.19 per cent in the second quarter of 2018.
According to the Lagos Chamber of Commerce and Industry (LCCI), the decline in the performance of agricultural sector could be attributed to funding gap in the sector, which is seen as risky venture by the financial institutions.
The chamber also attributed the slow performance of the sector to recent security challenges, which have affected many farming communities across the country.
It further identified climate change, flooding, access and cost of credit and general productivity challenges in the sector.
Speaking recently at the 2018 annual symposium of the LCCI Agricultural and Allied Group titled “Bridging the Funding Gap and De-risking Agricultural Finance”, the Chamber’s President, Mr. Babatunde Paul Ruwase, charged the financial institutions such as Central Bank of Nigeria (CBN), Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Bank of Agriculture (BOA) and Bank of Industry (BOI) to increase their supports across value chain in agri-business and agro-processing.
He maintained that since the oil sector is employment inelastic and does not impact strongly on average Nigerians, it is imperative to create the needed conducive business, policy and regulatory environment to support the growth of agriculture sector.
Ruwase further stated that the recent figures from the National Bureau of Statistics (NBS) indicated that headline inflation increased to 11.28 per cent in September, 2018 from 11.23 per cent in August.
He added: “Food inflation also increased in September to 13.31 per cent from 13.16 per cent in August. The major driver of the rising price includes rise in price of food items like yams, potatoes, eggs, bread, tea, soft drinks, fish, meat and cooking oils.
“These products can be produced adequately in Nigeria if we get financing and policies right.”
He therefore appealed to the government to remain focussed on providing enabling business environment for the private sector to thrive.
“The development of a good rail network to facilitate the movement of agric products to market cannot be overemphasized.
“Policy consistency is also required to attract private sector investments into agricultural sector.
“Our research institutes should be empowered to lead surveys and research projects in dealing with early warning signs, pest control, high yielding seedlings, etc.”
Meanwhile, the Managing Director/Chief Executive Officer, Nigerian Agricultural Insurance Corporation, Mrs. Folashade Joseph, said agricultural risks could be addressed through insurance.
According to her, insurance is a risk transfer mechanism that pools resources from many to redeem the loss of few less fortunate members of the contributing pool that suffered losses due to insured risks.
She noted that the application of insurance to agriculture as a vital risk management tool has continued to attract interest of various policymakers across the globe.
“The reason being that resources across the globe are getting leaner due to incessant occurrence of economic depression plaguing many nations.
“Insurance, therefore, comes with the solution of risk management, income stabilization and economic waste stoppage,”
While complaining about the inaccessibility of the various intervention funds provided by the government through those financial institutions, the Chairman, LCCI Agricultural and Allied Group, Prince Tunji Falade, said for farmers to be able to access those fund, they must join a particular organised private sector (OPS) such as NASME, SMEDAN, NACCIMA, LCCI and the like.
He explained that those banks would only attend to cluster of farmers under an organized association rather than individuals.
He added that training is also important for the farmer to be able to get the funds.
Falade said the main purpose of the symposium bis to sensitize the farmers on the available windows through which they could access the fund to bridge the financial gap in agriculture, hence the invitation of experts from various financial institutions in the country.
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