From the President to paupers, every Nigerian now utters with conviction that a major road out of recession into future prosperity lies in the promotion of agriculture. Experts have repeated it so often that it has become shopworn.
Unfortunately, like all roads paved with gold which often lead to hell, this good intention might be getting us nowhere because economic and social development cannot be achieved without concrete steps being taken to actualise them.
It is an axiom of economic development that a nation will achieve great results by prioritising and concentrating its investments in certain areas. Money still talks and is the chief determinant of most achievements. Banks generally provide the greatest percentage of the funds required for investment. Without them very little can be done.
However, the latest Financial System Stability (FSS) report published on the Central Bank of Nigeria’s (CBN) website, on Saturday, October 8, 2016 revealed to what extent we deceive ourselves from Aso Rock to Aba, Kano and Abeokuta, and indeed nationwide.
First, the report pointed out that only fifty (50) customers (less than 0.001 percent of all banks’ customers) owe the banks N5.23 trillion or 33.4 per cent of private sector loan. None of the debtors is in agriculture. Furthermore, virtually all of them are sitting on non-performing loans – which means they are not paying back to enable others borrow. So, even if the banks want to redirect their loans to agro-allied sector they have no funds with which to do it.
Second, it is the verdict of our history and experience that Nigerian banks don’t want to invest in agriculture and the Federal Government as well as the CBN had allowed them to get away with this obvious neglect of the sector we so much talk and yet do nothing about. The report provided us an insight into how bank credit is allocated.
According to it, oil and gas accounted for 28.77 per cent; manufacturing received 12.95 per cent; governments led by the Federal Government collected 8.84 per cent and general commerce was granted 8.69 per cent. Thus, almost 60 per cent went to those four sectors. No significant percentage was devoted to agriculture.
Given that scenario, agriculture will not take its rightful place any time soon, and the quest for meaningful diversification will continue to elude us. Nigeria will continue to be dependent on imported food and poverty will not be reduced for years to come.
It is the responsibility of the Federal Government’s economic planners, in collaboration with the CBN, to come out with a national template for making our banks relevant to the agricultural sector. Left on their own, the banks cannot do much to change the current picture of things.
Government must show its seriousness in making agriculture a lynchpin of its diversification programme by factoring our banks into its plan of action.