Central Bank disburses US$1.68b to farmers under credit facility

NIGERIA – The Central Bank of Nigeria (CBN) has released US$1.68 billion (N615Bn) to farmers as at 20 August 2018 under the Commercial Agriculture Credit Scheme (CACS) since its inception, reports ThisDay Live.

The facility was established by the federal government in partnership with the federal Ministry of Agriculture to enhance development of agriculture through loan support.

CBN’s monthly report for August 2018 showed that food crop obtained the largest share of US$873,847.75 (N318.50 million), 63.8% of the funding guaranteed to 3,345 beneficiaries.

It was followed by livestock, fisheries, cash crop, and mixed crop sub-sector which got 0.5% of the share guaranteed to 16 beneficiaries.

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Analysis by state showed that 29 states and the Federal Capital Territory benefited from the scheme.

CBN revised the CACS guidelines to include Non Interest Financial Institutions (NIFIs) in a bid to deepen access to finance and reduce exclusion rate.

The CACS was created in 2009 by the CBN in collaboration with the Federal Ministry of Agriculture and Water Resources (FMA&WR) to provide finance for the country’s agricultural value chain.

The scheme is financed through a N200billion Bond raised by the Debt Management Office (DMO), while loans under the scheme are disbursed at a maximum interest of 9.0%.

The agricultural sector is said to have remained primarily subsistence despite government’s initiatives such as CACS.

Figures show that Nigeria’s agricultural sector over the last four years has experienced rising growth but within a declining band, grew by 3% in the first quarter of 2018 but dropped to 1.5% by the second quarter of the year.

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The local agricultural sector is beset with challenges including small and fractionalized land ownership, poor yield per hectare, poor farmer education and training, poor seed variety, Poor storage capacity, poor transportation infrastructure, increasing rural-urban migration.

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