The Bank of Industry (BoI) and the Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) yesterday signed a Memorandum of Understanding (MoU) on proper linkage between the nation’s agriculture and industry sectors.
Speaking at the signing ceremony in Lagos, yesterday, acting managing director, BoI, Mr Waheed Olagunju, said the decision was in line with the federal government’s quest to diversify the country’s revenue base.
He also explained that ongoing efforts by the BoI in collaboration with NISRAL to come up with credible data on the country’s agricultural sector, was what was needed to help investors make investment decisions. This, he noted, would aid the donor agencies in making decisions on grants.
Olagunju further pointed out that the move would enable the bank play an active role in the sector. For instance, according to Olagunju, some BoI staff would undergo training programmes in order to harness the potentials in the sector.
On the viability of development finance institutions to mobilise funding support for the sector, the BoI boss averred that the bank had high credit rating. ‘‘There are lot of grants that are meant to support the development,” he said.
Similarly, managing director of NIRSAL, Mr Aliyu Abdulhameed, said that for agriculture to work and contribute its quota to economic growth and guarantee decent incomes for farmers, it has to be properly linked to industry.
He noted that the linkages between agriculture and industry were weak and had thus, reduced the ability of both sectors to contribute adequately to economic growth.
Abdulhameed remarked that the industry currently does not provide a significant outlet for agriculture output, lacks capacity to help stabilise agricultural markets and plays only a marginal role in opening up attractive new uses for crops.
“For many of the major crops, industrial use accounts for less than 10 percent of total production.
“If the current food import policy stance of the federal government and the Central Bank of Nigeria is maintained, the emerging pattern of agricultural growth that we’re just beginning to witness is likely to be sustained into 2017,” he said.
The NISRAL boss explained that the rush by farmers to take advantage of the current market demand for staples as a result of import restriction, the huge urban population that has to be fed, the demand of raw materials by the animal feed industry and the favourable conditions in export markets for certain commodities like cashew, sesame, and cocoa all have the combined potential to significantly drive the growth of agriculture.
He said that the above scenario informed NIRSAL’s quest to seek urgent increased investment in both agricultural primary production and agro-processing.
“This is what has led NIRSAL to seek collaboration with the Bank of Industry, a financial institution that also understands the economic urgency of the moment,” he said.