ABUJA – Nigeria needs to more than double the proportion of bank loans it makes to the agricultural sector to 10% within the next four years to boost food production in Africa’s biggest economy, its central bank governor said on Tuesday.
Nigeria is reliant on imports, including of foods, to meet its needs due to limited manufacturing capacity. It has been trying to cut its $20 billion annual food import bill, but has struggled to build up an economy outside its dominant oil sector.
Loans to the food sector account for around 4% of total credit, Governor Godwin Emefiele told bankers. President Muhammadu Buhari last week told the central bank to stop dollar sales for food and fertiliser imports.
Emefiele said the coronavirus pandemic had exposed the risk of relying on food and drug imports, as most countries are reluctant to export goods.
Despite rice growing being a government priority, many farmers still work with their bare hands in fields lacking irrigation channels.
Mills are often ramshackle, while poor roads make getting the crop from the main growing areas in northern Nigeria to consumers in the south difficult and costly.
The country is facing its worst economic crisis in four decades, triggered by an oil price crash induced by the pandemic. The crisis has slashed government revenues, weakened the currency and created a large financing gap.