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CBN Doles N104bn To 1m Farmers’ Under ACGSF



By Kayode Tokede, Lagos –

The Central Bank of Nigeria (CBN) under the Agricultural Credit Guarantee Scheme Fund (ACGSF) has granted 1,059,847 individual, informal group, co-operatives and company farmers N104 billion loans since its inception in 1978, information available to LEADERSHIP has revealed.

Findings by LEADERSHIP revealed that individual farmers since the establishment of the scheme in 1978 have benefited tremendously followed by co-operatives farmers.

Breakdown of loans guaranteed revealed that 1,028,818 individual farmers have accessed N97.3 billion between 1978 to 2016 while, 11,779 informal groups were granted N1.84 billion in 37 years.  Others are 16,998 Co-Operatives farmers who were granted N3.29billion and 2,252 companies granted N1.6 billion between1978 to 2016

An economist, Mr. Tope Fasua said the scheme has not impacted on farmers, stressing that a better living for farmers can only come through good governance.  In his words, “I believe the recent intervention through NIRSAL which is part of the CBN intervention has been bolder and better targeted.

“It is difficult to say the same has happened over the years. The CBN should ensure that its interventions reach the smallholders who are in a worse situation than 37 years ago.  He added that “a journey around the hinterland and villages will show that poverty among farmers is higher. A better living for farmers can only come through good governance.”

In 1978 when the Agriculture Credit Guarantee Scheme was established, the CBN granted N75.8 million to 2,391 farmers. The loans guaranteed by CBN crossed the N1 billion mark in 2002 to N1.05 billion, a year when the capital base of the Scheme was increased to N3 billion in March, 2001.

The scheme was established by Decree No. 20 of 1977, and started operations in April, 1978. Its original share capital and paid-up capital were N100 million and N85.6 million, respectively.  The Federal Government holds 60 per cent and the apex bank, 40 per cent of the shares. The Fund guarantees credit facilities extended to farmers by banks up to 75 per cent of the amount in default net of any security realized.

The Fund is managed by the CBN, which handles the day-to-day operations of the Scheme. Between 1978 and 1989 when the government stipulated lending quotas for banks under the Scheme, there was consistent increase in the lending portfolios of banks to agriculture, but after the deregulation of the financial system, banks started shying away by reducing their loans to the sector due to the perceived risk in the agriculture sector.

Meanwhile, the loans guaranteed continued to increase significantly in 2004 to N2.08 billion; N3 billion in 2005; N4.26 billion in 2006; N4.4 billion in 2007; N6.7 billion in 2008; N8.3 billion in 2009; and N7.7 billion in 2010. The CBN’s loan guaranteed however hits N10.2 billion in 2011 but dropped to N9.7 billion in 2012.

It dropped further to N9.4 billion in 2013 and increased significantly to N12.9 billion in 2014, the highest ACGSF by CBN since its inception. In addition, 69,436 and 58,548 farmers were granted N11.44 billion and N8.1 billion between 2015 and 2016. Information by CBN revealed that Livestock, Fisheries Food Crops and Cash Crops dominated loans guaranteed analyzed by purpose from Inception.

The National Bureau of Statistics (NBS) had said the nation’s Gross Domestic Product (GDP) from Agriculture sector averaged N3.7 trillion from 2010 until 2017, reaching an all-time high of N5.2 trillion in the third quarter of 2017 and a record low of N2.59 trillion in the first quarter of 2010.

GDP non-oil sector grew by -0.76per cent in real terms during in the third quarter of 2017. NBS had said, “This is lower by -0.79 per cent point compared to the rate recorded same quarter, 2016 and -1.20per cent point lower than in the second quarter of 2017.