The Federal Government has instructed the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) of the Central Bank of Nigeria (CBN), to do everything possible to cut interest rate on loans to farmers to five per cent.
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, who spoke yesterday during the National Workshop on New Agricultural Policy for the sector, said agriculture cannot thrive if lending remains at 25 per cent.
Ogbeh promised to impose financial sanction on any bank that fails to comply with the directive.
He said: “Just this morning, I talked to key officials of NIRSAL group in the CBN. We have to bring interest rate to five per cent.
“How we do it and how the financial institution will work to cope with it (will be worked out), we have to impose serious financial penalties on defaulters otherwise, we will not survive. There is no point pretending we are going to make it in spite of those circumstances.”
He said Nigeria banks remained one of the financial institutions in Africa that offer outrageous interest rate to local farmers.
“Even if we acquire competence and capacity, how can we deal with issues of near impossible interest rates in agriculture? There is no country on earth outside Africa where banks demands 25, 18 even nine per cent for agriculture borrowing.
“Those interest rates, as man, I assure you as a man who has been in this business since the age of seven, you cannot make profit in agriculture. Is there something rest of the world has done that we have failed to do? Sometimes some of the reforms we have carried out in the past, especially fiscal and monetary policies have done terrible damage to this country’s progress.”
He said there was a time in the past when when the president announced a budget and fixed the lending rates and also informed banks how much they have to lend to the public sector, lamenting that the practice has been jettisoned.
Chief Ogbeh sought subsidy for the sector as being practiced in other developed countries, adding that the nation has potential to feed its people.
He said: “There are people complaining about CBN policy on import restriction. We have no business importing rice, sugar, milk, toothpick, bananas, strawberry, pepper. For God sake, what kind of people are we?”
According to him, Nigeria has 10 per cent of global arable land for cultivation, yet the people relish importation, thereby strengthening other economies and denying youths of jobs, causing crisis.
He stated that if the 100 million young people in the country, who are predominantly below age 50 could be engaged, they would transform the sector.
He disclosed that a potential cure has been discovered but needed to be researched upon at the agric research institute to confirm its relevance to local needs.
“We have a big threat in the poultry industry to bird flu. In the last two months, about 6 million chickens have died. I lost some on my farm as well and I have been calling friends. Just yesterday, I received a text from Egypt and they inform me that have found a vaccine they inject the chicken. We will not immediately rush in and bring in the vaccines, we will take it to our research institutes, take a look and see if it can fit into our needs,” he added.