 |
| Minister of Agriculture and Rural Development, Dr. Akinwumi Adesina |
The Minister of Agriculture and Rural Development yesterday
advised commercial banks to create credit instruments and services that are
tailored to the risks and cash flow patterns in the agricultural sector.
Minister of Agriculture and Rural Development, Dr. Akinwumi
Adesina, gave this advice in a lecture delivered at the Chartered Institute of
Bankers of Nigeria (CIBN) 2012 annual lecture held in Lagos.
The minister’s speech was titled: “The New Agricultural
Transformation in Nigeria: Opportunities for Banks and Other Stakeholders in
Economic Diversification.”
According to him, there are tremendous opportunities for
commercial banks and other stakeholders in the finance industry to initiate
much needed overhaul of the agricultural financial lending system.
He explained: “In recent years, the topic of unlocking
agricultural finance has gathered increasing popularity and has been widely
discussed in arenas such as this. While progress has been made in agricultural
lending, it is still far from being enough to meet the needs of this very
important sector.
“It is my hope that CIBN’s decision to hold this lecture is
a sign that the commercial banks in Nigeria have finally recognised the
importance and value of increasing their agricultural loan portfolios and are
committed to developing innovative financial instruments to effectively deploy
much needed capital to this potentially lucrative sector.”
He declared that there was need to take a multi-faceted
approach to solving the problem in the sector.
“First, the government must create an enabling environment
by working with the private sector to develop programs and services that reduce
the perceived and real risks associated with agricultural lending in order to
encourage banks to lend. However, the onus does not fall on the government
alone.
“Second, commercial banks should to be more innovative and
proactive. Banks and other private lending institutions have a responsibility
to develop credit instruments and services that are tailored to the risks and
cash flow patterns in the agricultural sector.
“Lastly, we must draw lessons from our experiences to date,
and progress in Nigeria’s agricultural Transformation, to drive greater
performance of commercial banks in lending to the agricultural sector,” he
added.
According to him out of the country’s population of 165
million, the agricultural sector contributes over 40 per cent of its Gross
Domestic Product.
Continuing, the minister said: “This large market represents
a high and fast growing demand for agricultural goods and services. Although
not fully harnessed, Nigeria also has the capacity to meet, and potentially
exceed, this domestic demand. Our nation is abundant with the labour and
natural resources necessary to improve productivity.
“Arable land, perhaps the most critical natural resource, is
abundant in Nigeria; we have a total of 84million hectares of arable land of
which only 40 per cent is under cultivation.”
No comments:
Post a Comment