UNIFEMGA Identifies Problems Confronting Nigeria’s Agric Sector, Proffers Solutions

Michael Olugbode in Abuja

For Nigeria to get on the right trajectory to agricultural development and food sustainability, the country needs to overcome the challenges of limited finance, high cost of power generation, limited storage facilities, and inadequate market information, among others.

These challenges were identified by Obafemi Awolowo University Muslim Graduates Association (UNIFEMGA) at a one-day third agricultural conference organised by the Ogun State chapter of the association in Abeokuta.

It was resolved that to get it right as a country, all the factors listed above must be adhered to.

At the conference, with the theme: ‘Agricultural Entrepreneurship and Development: Access to Finance and Funding Opportunities’, it was resolved that to get it right as a country, all the factors listed must be followed.

UNIFEMGA noted with concern that corruption has been the main factor affecting the Nigerian economy and until it is vigorously tackled, the country will not make any progress, adding that interventions and aids, which could have helped the sector only come as crash programme and never consistent.

According to the Muslim alumni, natural occurrences such as flood, which could lead to famine, must also be taken into consideration for Nigeria to move forward in the agriculture sector.

The communique issued at the meeting also identified national insecurity and mistrust, banditry, kidnapping for ransom, and the Boko Haram insurgence as some of the factors responsible for the reluctance of financial institutions to provide credit for agricultural venture as it poses a great financial risk, and therefore, attracts high interest rate that is mostly unaffordable to agriculture entrepreneurs.

The communique read: “Corruption is the bane of our economy and until we drive it out from all the sectors of the economy, we are going nowhere as a country. The challenges confronting Nigeria as a country among others are lack of modernisation/mechanisation, market volatility, limited finance, tax and duties laced with inconsistencies by the government, and high cost of power generation.

“Project interventions and aids come as crash programme, and are not consistent. Natural phenomena are very difficult to cope with and manage because of the negativities such as flood, which wash away farm settlements and may result in famine, as well as the national insecurity and mistrust, banditry, kidnapping, Boko Haram insurgence.

“The presence of these challenges are responsible for the reluctance of financial institutions to provide credit for agriculture venture as it poses a great financial risk and therefore attracts high interest rate that is mostly unaffordable to agriculture entrepreneurs. With less than 5 percent of banks’ credit granted to the sector, finance from traditional banks remains a major challenge to agriculture development in Nigeria.

“In order to bridge the gap within the agriculture credit market, financial institutions like Lotus Bank has a critical role to play by developing areas around the value chain through product financing, financing of farm inputs, financial advisory and financial literacy. Financial institutions must understand that whatever financing option to adopt must be mutually beneficial.”

The conference advised entrepreneurs to take advantage of Lotus Bank, where there’s finance for the purchase of inputs for crop production such as seedlings/seeds, fertilisers, insecticides, manual sprayers, for the acquisition of farm machinery, of working capital needs through forward purchase of agriculture produce, for infrastructure development such as farm house and warehouse as well as equity partnership on agriculture venture.

While calling on those who want to embrace agriculture as business to have sound knowledge of the sector through mentorship and research, he urged the government and policy makers to show sincerity of purpose in addressing the multiple challenges facing the Nigerian economy so that people are encouraged to put in their best.