In an apparent reflection of the effect of poverty, floods, and extreme weather on farming activities, the agriculture sector’s growth fell by more than half in five years to 2022, beating the double-digit increase in banks’ lending to farmers during the same period.
According to a financial vanguard survey of banks’ lending in the last ten years, loans to farmers increased by 197 percent to n1.8 trillion in five years to 2022, up from 107 percent in the previous five years to 2016.
This is in contrast to the decline recorded in the previous five years, when the agricultural sector’s share of total banks’ lending dropped from 3.4 percent in 2011 to 3.3 percent in 2016, a 0.1 percentage point decrease.
To address this crisis, the central bank of Nigeria, CBN, set a ten-year target of seven percent credit allocation to the agricultural sector in 2011.
To achieve this goal, the apex bank introduced several steps, including the establishment of the Nigerian incentive-based risk-sharing scheme for Agricultural lending (NIRSAL) and Interventions funds such as the Commercial Agricultural credit scheme(CACS) and the Anchor Borrowers Programm (ABP).