Agriculture was the major export of the country in time past but focus shifted from the employment generating sector to oil.
However, the declining oil price in the international market and the transformation agenda of the federal government has made it imperative for focus to be reverted back to agriculture as a sector that not only generates employment but also grows the fortunes of the country.
With the diversification to other sectors of the economy to attain a solid economic growth, a primary sector to pay attention is agriculture.
Until the discovery of oil, agriculture was the country’s mainstay of the economy with different regions boasting of different cash crops like groundnut, cocoa, rubber, palm oil produce, and many more. Today, with its abundant arable land and over 160 million people, Nigeria cannot feed its citizens not to talk of exporting to other lands. Some stakeholders in the agricultural sector have argued that with over 79 million hectares of arable land, diversified ecological conditions, abundant water resources and adequate rainfall, there is no reason for Nigerians to be hungry and jobless.
Unfortunately, the reverse is the case. The country cannot boast of sufficient production of any food items, instead we import virtually every food item from different parts of the world. The importance of the agriculture sector to a country cannot be overemphasised, especially one like Nigeria where agriculture is one of the biggest contribution to the gross domestic product (GDP). Prior to the birth of the oil fortune, agriculture was contributing about 70 per cent of the GDP.
Despite various interventions on the part of government in the agriculture sector, funding remains a major challenge in the country, especially for farmers, due to the peculiar nature of the farming business. Having in mind the essence of agriculture to the survival of the nation’s economy, United Bank for Africa (UBA) had come up with various ways of getting funds to farmers as well as those in the agriculture value chain. Knowing the peculiar nature of agriculture and lending to the sector, UBA floated a N50 billion Agric Support Scheme, one of the largest private sector initiative to support agriculture development in Nigeria.
The fund is targeted at all segments of the agriculture chain, from small and medium scale farmers to large, industrial farming projects. This is part of the bank’s Food for the Nation programme, and is aimed at improving food security, poverty alleviation, and providing a timely boost to agriculture. Sub-sectors covered by it include poultry, fishery, crop cultivation, production, plantation, farm machinery, and hire services. Also, UBA, as far back as 2009, floated the largest private sector funding scheme of N50 billion to support agriculture and agro-processing industries in Nigeria. Since then, UBA has sustained its commitment to the agriculture sector by committing an average of 7 per cent of its loan book to agriculture financing, well above the banking industry average of 4 per cent.
UBA was also one of the two banks selected in 2010 to administer the N200 billion Agriculture Fund set up by the Central Bank of Nigeria (CBN) because of the bank’s commitment to agricultural financing as well as its spread across the country. The bank’s managing director/chief executive officer, Mr Phillips Oduoza, said that the Agriculture Support Scheme is part of the cumulative efforts by the bank to jumpstart the agricultural sector.
“Given the decline in petroleum prices and the current global economic challenges, it has become imperative to begin to channel resources into the agriculture sector because of the multiplier effect it has on the economy,” he said.
Providing N50 billion for Nigerian farmers, he explained that it is also in support of the Food Security Programme being promoted by the federal government to ensure food adequacy at lower costs.
“UBA, in its usual proactive manner is supporting this federal government objective and championing the revitalisation of the agriculture sector. The fund is in collaboration with the CBN and the Nigerian Agriculture Insurance Corporation (NAIC),” he stated.
Shedding more light on the scheme, the head, Credit Risk Management of UBA, Mr Adetunji Adesida, said that the facility will be available to farmers at below single-digit interest rates through three credit products namely, the Agriculture Credit Support Scheme, Agriculture Credit Guarantee Scheme, and Food Security Support. According to him, farmers throughout the entire agriculture value chain can avail themselves of facilities provided by the scheme through any of the over 750 business offices of the bank provided they meet the minimum requirements stipulated by the bank.
In some of the requirements articulated by Mr Alebiosu, beneficiaries must be practicing farmers and belong to farmers associations or co-operative. In addition, projects to be financed must fall within the coverage areas and targeted crops and livestock such as rice, wheat, maize, millet, sorghum, cassava, yam, plantation agriculture, poultry – chicken and eggs, animal husbandry –cattle – as well as fish farming.
In recognition of UBA’s contribution to the development of agriculture, it was honoured recently with an award as Nigeria’s biggest lender to agriculture by the Lagos Chamber of Commerce and Industry (LCCI) at the chamber’s Annual Commerce and Industry Awards night. Also, the bank was adjudged as Western Nigeria’s agriculture farmers’ bank of the year 2008, which was presented to the bank during the 3rd Western Nigeria International Agriculture Conference organised by the Africa Farming Project in Lagos.
Oduoza has assured that UBA will continue to support the agriculture sector, saying, “Agriculture is key to diversifying the Nigerian economy from dependence on oil. As has been demonstrated by us over the years, we will continue to support and lend to the sector not only in Nigeria but across Africa.
“The cocoa farmlands in the South West, the groundnut pyramids of the North, the oil palm plantations of the South and a host of such other examples, remind Nigerians of how prominent agriculture was in the national economy in pre-independence Nigeria. UBA hopes that this gesture will go a long way in restoring such past glories.”
With a balance sheet size in excess of N2.3 trillion and operating from over 750 offices globally, UBA is one of the largest financial services institutions in Africa. Currently having full-fledged operations in nine African countries, operating licences in 15 African countries and a presence in London and New York, UBA is strategically deepening its roots in Africa with a view to becoming one of the most recognisable financial services brand in the continent.