The House of Representatives on Tuesday called on the Central Bank of Nigeria (CBN) to raise agricultural lending from 1.4 per cent to 7 per cent of its total lending over the next five years.
The House also urged the CBN to ensure that 50 per cent of the lending goes to smallholder farmers through microfinance institutions, farmer cooperatives and value-chain commodity associations.
This, according to the house, should be at interest rates between 7.5 per cent and 10.5 per cent.
This resolution followed the adoption of a motion by Rep. Uchenna Okonkwo (LP-Anambra) during plenary in Abuja.
The motion was titled, “Repositioning Nigeria’s Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) and De-Risking Agribusiness in Nigeria.”
Okonkwo attributed Nigeria’s struggling economy, widespread poverty and increasing hunger to declining agricultural productivity, driven by low capital investment and insufficient funding.
He noted that NIRSAL’s objectives include strengthening agricultural and financial value chains by promoting best practices in agricultural financing, loan utilisation and repayment, thereby reducing the risks of agricultural lending.
He expressed concern that despite agriculture contributing 40 per cent to the nation’s GDP and providing over 60 per cent of employment, the sector had continued to experience slow growth and underperformance, despite its vast potential.
Okonkwo recommended allocating an additional $3 billion to NIRSAL to support lending to agricultural value chain actors and reduce interest rates for borrowers to between 7.5 per cent and 10.5 per cent.
The House adopted the motion and directed the Committees on Banking Regulations, Agricultural Production and Services, Nutrition and Food Security, and Finance to monitor compliance and report back within four weeks for further legislative action.
