Agriculture sector expansion resists N1.8 trillion in loan infusions


In contrast to the double-digit increase in bank loans to farmers during the same period, the growth of the agriculture sector plummeted by more than half in the five years to 2022, seemingly reflecting the impact of insecurity, flooding, and bad weather on farming activities.  

Financial Loans to farmers increased by 197 percent to N1.8 trillion in the five years to 2022, according to a Vanguard review of bank lending during the previous ten years, outpacing the 107 percent rise seen in the prior five years to 2016.

Due to the increased lending to farmers, the agricultural sector's proportion of all bank lending climbed from 3.3% in 2017 to 6.16% in 2022, an increase of 2.86 percentage points over the course of five years.

This is in contrast to the reduction seen over the previous five years, during which time the agricultural sector's proportion of overall bank lending decreased by 0.1 percentage points, from 3.4% in 2011 to 3.3% in 2016.

the value of agriculture

About 35% of all workers in the country are employed in the agricultural sector, which accounts for approximately 20% of the GDP of the country. But because banks view the industry as high risk and are hesitant to lend to farmers, access to credit has been a significant barrier.

As a result, for many years, the agricultural sector's proportion of total bank credit has been less than 5%, with annual growth in lending to farmers being below 2.0%. cent. 

The Central Bank of Nigeria, CBN, declared a ten-year aim of allocating 7% of credit to the agricultural sector in 2011 to solve this issue. The Nigerian Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), as well as intervention funds like the Commercial Agricultural Credit Scheme (CACS) and the Anchor Borrowers Programme (ABP), were established by the national bank to help achieve this goal.

The CBN stated that one of the benefits of the initiative was to "increase lending to agriculture from 1.4 percent of total banks' credit to the economy to 7 percent within 10 years, with NIRSAL becoming economically self-sustaining" (NIRSAL document), further endorsing the seven percent target.

This goal amounts to a 400 percent increase in the share of bank credit allocated to the agricultural sector between 2011 and 2021, or a 40 percent annual growth rate.

Between 2017 and 2022, bank lending to farmers increased by 197%, translating to an annual growth rate of 39.4%, which is 0.6 percentage points below than the CBN target of 40%.

Additionally, agriculture accounted for 2% of all bank 6.16 percent in 2022, falling 0.84 percentage points short of the Central Bank of Nigeria's (CBN) 7 percent goal.

Therefore, despite being two years behind schedule for 2021, the sector is on track to meet the CBN targets by the end of this year. 

Growth rejects lending increase

However, despite the fact that more money was lent to farmers, the sector's growth decreased significantly throughout the five years leading up to 2022.

According to data from the Nigeria Bureau of Statistics, the actual Gross Domestic Product (GDP) of the agriculture sector increased from N16.607 trillion in 2016 to N19.09 trillion in 2022, reflecting 14.9% growth over this time period and 2.98 percent annually. 

However, this reflects a decrease from the 23.7% growth seen in the five years prior to 2016 (2012–2016).

Financial Vanguard's interview with agribusiness specialists and investment analysts revealed that bank lending to farmers has improved, with the majority of credit going to the CBN intervention funds and influx of large investors.

However, they pointed to the difficulties of instability, flooding, and harsh weather for the fall in the GDP growth of the industry.

 Adebanjo Daniel, an agribusiness expert and Executive Director of Agrotrends Nigeria Integrated Services, said: "I can confirm there is an increase in bank loans to agriculture as I have witnessed a few numbers of beneficiaries close to me."  

"The 197% growth in lending to agriculture is actually not due to the banks' natural desire, but rather to the driven policy of intervention by authorities (CBN)," he continued.

The agriculture desk of commercial banks has become more effective over the past five years, participating in various agricultural conferences to promote their varied agribusiness loans to agricultural stakeholders.

Citing government intervention as a key factor in the better loan increased growth in loans to farmers, "I sincerely doubt if anything has changed over the last five years that has made the sector attractive to banks," said Kunle Adeniyi, managing director and chief executive of Kadeb Farms. "Perhaps certain government policies force the banks to lend to the agric sector," he said. 

I am aware that agricultural loans are available through commercial banks, subject to the fulfillment of a number of requirements.

According to Tunde Abidoye, Head of Equity Research at FBNQuest Securities Limited, the agribusiness industry has become more formalized as seen by the entrance of significant corporate organizations. 

Although banks have been gradually expanding their operations in the agricultural sector, he claimed that the CBN's credit initiatives have been more substantial. 

The mission of the Federal Ministry of Agriculture and Rural Development, a ministry of the Federal Government of Nigeria, is to ensure food security in the areas of agriculture, zoology, and fisheries, to promote agricultural employment and services, to encourage the production and supply of raw materials to agro-allied industries, to provide markets for industrial sector products, to generate foreign exchange, and to support socioeconomic development in rural areas across Nigeria. The current Minister of Agriculture and Rural Development is Dr. Mohammad Mahmood Abubakar ( After being transferred from the Federal Ministry of Environment by President Muhammadu Buhari in September 2021, Dr. Abubakar succeeded Sabo Nanono and assumed leadership of the Ministry of Agriculture and Rural Development.

Prior to being transferred out of the Ministry of Environment and Dr. Abubakar made notable contributions to rural development, including the cleanup of Ogoniland, the fight against climate change, the preservation of wildlife, and the repair of erosion-affected areas. He served as the Board of Universal Basic Education's chairman. He is an accomplished politician and a meticulous technocrat.Buhari dismisses the agriculture and power ministers

The Federal Ministry of Agriculture's past

Following Nigeria's independence, 12 States were formed from 4 Regions in 1967, along with the establishment of the Federal Ministry of Agriculture.The Ministry of Agriculture and Natural Resources is independent in each state.Ebonyi State, for instance, has its own. When Goodluck Jonathan named Sheikh Ahmed Abdullah in April 2010, the Ministry of Water Resources was split off from the Ministry of Agriculture and Rural Development.Previously, Adamu Bello, Abba Sayyadi Ruma and Sheikh Ahmed Abdullah served as the ministry's leaders.

President Goodluck Jonathan appointed Akinwumi Adesina to the position of Federal Minister of Agriculture and Rural Development in June 2011. Audu Innocent Ogbeh, who was chosen by President Muhammadu Buhari in 2015, succeeded him. President did not retain Audu Buhari was re-elected in 2019 and succeeded by Sabo Nanono. Dr. Ernest Afolabi Umakhihe is the current permanent secretary for the Federal Ministry of Agriculture and Rural Development, while Mustapha Baba Shehuri is the current minister of state.


The ministry is in charge of certain tasks related to the national objectives of rural development, food security, income growth in rural areas, and employment creation. Through its divisions and parastatals, the ministry performs its duties. The National Root Crops Research Institute, National Animal Production Research Institute (NAPRI), National Veterinary Research Institute (NVRI), Rubber Research Institute of Nigeria (RRIN), and Colleges of Agriculture and Forestry are among the research institutions it oversees and funds. Benin City, Edo State is home to the Rubber Research Institute of Nigeria (RRIN), which is located at IYANOMO VILLAGE off the Benin/Sapele Highway.

Blueprint (15 September 2021) is cited. "On the appointment of the minister of agriculture." newspaper company Blueprint Limited. taken back on June 1, 2022.

 "Ebonyi State Government, Ministry of Agriculture and Natural Resources."  taken back on June 1, 2022.

 7 April 2010: George Oji. "Jonathan Takes Over the Power Ministry." ThisDay. obtained on February 27, 2011.

 "Welcome". Abba The Sayyadi Ruma. Archived on March 26, 2010, from the original. obtained on December 15th, 2009.

 "Buhari finally appoints a new cabinet for Nigeria, but it's not that new." QuartzAfrica. obtained on August 26, 2019.

 "Ex-Ministers Dropped By Buhari" The Sahara Reporters. obtained on August 26, 2019.

 Odusote Ibukun Federal Ministry of Agriculture and Rural Development, "Archived 2 February 2016 at the Wayback Machine," Accessed January 23, 2016

 "Welcome". Agriculture and Rural Development Federal Ministry. obtained on August 26, 2019.

The manufacturing, banking, service, communications, technology, and entertainment industries are all growing in Nigeria's economy, which is a middle-income, mixed economy and rising market It is the largest economy in Africa, the largest in the world in terms of nominal GDP, and the 27th largest in terms of purchasing power parity.

The greatest economy in Africa is that of Nigeria. In 2013, the nation's resurgent manufacturing sector surpassed all others on the continent in size and produced a sizable share of the goods and services required by West Africa.According to the IMF, Nigeria's debt-to-GDP ratio was 36.63% in 2021.

The purchasing power parity (PPP) growth of Nigeria's GDP from $170 billion in 2000 to $451 billion in 2012 has almost tripled despite estimates of the size of the informal economy 

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