Twelve commercial banks collectively gave out N4.68 trillion as agricultural loans to farmers between 2018 and 2022, a new report has shown.
The report titled “Commercial Bank Lending to the Nigerian Agricultural Industry 2018-2022,” was published by Alford Conferences Limited, an Abuja-based firm is coming ahead of his firm’s forthcoming Nigeria Food Surplus Summit, a nationwide advocacy that seeks to help Nigeria to successfully feed itself and have a large surplus for export by strengthening the commercial farming, food processing, and agricultural machinery segments of the country’s agricultural industry.
The CEO of Alford Conferences, Mr. Frederick Apeji, while presenting the report, said Nigeria’s commercial banking sector must seek creative ways to increase the share of its loan portfolio devoted to growing the country’s agricultural industry in the years ahead, beyond just the 5.03 per cent that it gave to the industry during the review period.
“More importantly, we advocate that the governments of the 36 states and FCT should deliberately work more closely with these commercial banks in order to attract appropriate funding for bankable businesses and projects across the agricultural value chains in their respective domains,” he said.
“The total five-year bank lending of N4.68 trillion given to the agricultural industry compares favourably with the N8.18 trillion internally generated revenue (IGR) that was raised collectively in these past five years by the FCT and the 36 states.”
The report shows that Access Holdings was the biggest lender in Nigeria between January 1, 2018 and December 31, 2022 with N17.386 trillion. It lending to agriculture during the period was also the biggest with N928.55 billion.
Zenith Bank ranked as the second biggest lender in Nigeria with N14.278 trillion. Its lending to agriculture during the review period was N873.36 billion, making it the second highest lender to the sector.
FBN Holdings, which ranked the third biggest lender in Nigeria with N12.411 trillion, however ranked 7th among the 12 banks in the report based on its total loans of N285.18 billion to agriculture.
The report further indicated that Ecobank Nigeria gave the highest percentage of its total loans of N4.68 trillion to the agricultural industry.
The bank’s loan to agriculture stood at N574.69 billion, representing 12.28 per cent. Sterling Bank and FCMB Group ranked second and third respectively in terms of their percentage commitment to supporting the Nigerian agricultural industry during the five-year period. Though regarded as small players in the banking industry, they gave 8.19 per cent and 7.58 per cent respectively to agriculture.
Food security has become a serious issue in Nigeria with the escalating hunger arising from high cost of food.
This is even as the country has continued to spend heavily to support agriculture. The Central Bank of Nigeria (CBN) through the Anchor Borrowers Programme (ABP) gave out over N1.12 trillion between 2015 and 2023 as loans to support small holder farmers (SHF) throughout the country. Unfortunately, the effort failed to address the hunger issue due to poor implementation and corruption.
The 2024 Cadre Harmonise report prepared by the Food and Agriculture Organization (FAO), GAIN, GIZ and Agsys, said shows that over 31.8 million Nigerians are facing acute hunger.
The report blamed the heightened hunger on the surge in food commodity prices occasioned by the removal of fuel subsidy as well as security challenges.
For decades, the burden of feeding the country’s over 220 million people has rested largely on the shoulders of its millions of smallholder farmers, Apeji noted that the Nigeria Food Surplus Summit seeks to complement the efforts of the smallholder farmers by deliberately promoting and boosting commercial farming, food processing, and the production of agricultural machinery on a large scale in each of the 36 states and FCT.