Nigeria to Double Agriculture Credit in Two Years to Cut Imports

Nigeria, Africa’s top oil producer, plans to double agriculture’s share of banks’ credit to 10 percent in two years as it seeks to cut food imports, Agriculture Minister Akinwunmi Adesina said.

“We made a fundamental shift that agriculture is not a developmental activity, agriculture is a business,” Adesina said in an interview with Bloomberg TV Africa at the World Economic Forum in Davos. “And so it shifted the mind-set of the banks. It’s a new agriculture sector in which they can actually invest money and make money.”

Loans to agriculture as a share of total credit rose to 320 billion naira ($2 billion), or 5 percent, at the end of last year from less than 1 percent in 2011, Adesina said. The Agriculture Ministry is partnering with the Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending, a unit of the Central Bank of Nigeria, to provide credit guarantees to enable banks lend to farmers.

Africa’s most populous nation of about 170 million people is trying to reverse decades of neglect of its farming industry and push agriculture as its “new frontier for growth” because it can no longer depend on oil to drive its economy, President Goodluck Jonathan said in July.

The government’s efforts to boost food supply by 20 million metric tons from 2011 to 2015 has seen the country’s food import bill drop by more than half to $5 billion from $11 billion two years ago, Adesina said.

Source: Bloomberg Businessweek