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You are here:Home>>Strategic Research & Analysis>>Nigeria's Food Imports Cost Country N630 Billion Annually
Thursday, 07 July 2011 16:29

Nigeria's Food Imports Cost Country N630 Billion Annually

Written by Idris Ahmed & Tina A. Hassan

Nigeria spends N630 billion to import agricultural foods annually because the agricultural sector has been pushed to the background, the governor of Central Bank of Nigeria (CBN), has said.

Sanusi Lamido Sanusi said this yesterday in Abuja when President Goodluck Jonathan launched the N77.5 billion Nigeria incentive-based Risk Sharing System for Agriculture (NIRSAL) meant to de-risk lending to the sector.

The CBN designed the NIRSAL as a mechanism to support farmers to transit from subsistence to commercial farming and for the banks to better understand agricultural financing as a profitable business.

Out of the N630 billion spends on food importation annually, N165 billion goes for wheat, N105 billion on fish, N75 billion on rice and N60 billion on sugar.

"In the last five decades, agricultural financing in Nigeria considered and treated each project in isolation not giving adequate attention to other players along the value chain," Sanusi said.

Vice President Mohammed Sambo Namadi represented the President to launch the NIRSAL which is structured into five pillars.

The first pillar is what is called Risk Sharing Facilities which is allocated N46.5 billion; Insurance Facility N4.65 billion; Technical Assistance Facility N9.3 billion; Agric Bank Rating System N1.55 billion; and Bank Incentive Mechanism N15.5 billion.

The President commended the Governor of CBN for the initiative, saying it will help in growing the sector.

 

NIRSAL is expected to generate additional N465 billion of bank lending within 10 years to increase agricultural lending from the current 1.4 to 7 percent of the total bank lending.

It is expected to increase lending to the pool of small farmers segment and reach 3.8 million agricultural producers by 2020.

It is also expected to reduce banks' break-even interest rate to borrowers from 14 to 7.5 to 10.5 percent.

It has been projected that the Nigerian agricultural sector has the potential to grow its current output valued N15.25 trillion by 160 percent to N39.4 trillion by 20230.

"This growth potential could be achieved by increasing both the productivity and total acreage of cultivated land since about 38 percent of Nigeria's arable land of 36.6 million ha is yet to be tapped," Sanusi said.

Idris Ahmed & Tina A. Hassan write for Daily Trust

 

 

Last modified on Thursday, 07 July 2011 16:40

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