Public funds not enough to finance agriculture — CBN

The Central Bank of Nigeria (CBN) has stated that public funds alone are insufficient to meet Nigeria's agricultural financing requirements, advocating for increased private-sector investment to address funding shortages, boost productivity and enhance food security. CBN Governor Olayemi Cardoso made this assertion during his opening remarks at a stakeholder roundtable on enhancing agricultural credit guarantees, held in Abuja.

Cardoso, represented by Deputy Governor Lamido Yuguda, emphasized the need for sustainable financing arrangements that would attract commercial investment while mitigating agricultural lending risks. He explained that the CBN is shifting its development finance activities to market-based lending, increased private-sector participation, and sustainable risk-sharing models.

The bank must attract private capital rather than deter it, according to Cardoso. Obstacles to financial institutions extending credit to farmers include climate-related risks, price volatility, lack of collateral, information gaps, and seasonal production cycles. In response, Cardoso outlined four priorities for improving agricultural financing: better institutional coordination, climate-risk management, digital transformation, and private capital mobilization.

He called for greater cooperation among banks, microfinance institutions, insurers, development finance organizations, and government agencies to streamline credit delivery. Additionally, Cardoso suggested modernizing the Agricultural Credit Guarantee Scheme Fund to streamline processing, monitoring, transparency, and credit-risk assessment.