Farmers and agricultural firms in Nigeria are struggling with a massive debt burden as they struggle to repay N380.97 billion of the Central Bank of Nigeria’s intervention loans by September 30, 2023.
This amount represents the principal due and unpaid interest on various agricultural support programmes introduced by the Central Bank of Nigeria.
In the detailed data from the Central Bank of Nigeria, of the N380.97 billion owed, N362.22 constitute the principal yet unpaid, while the remaining amount of N18.75 billion is accruing interest, according to nairametrics.
This Information reveals how difficult it is for the central bank to recover funds, given out to promote agricultural productivity and food security.
Failure to pay these loans, signals the fundamental problems of the agriculture finance system, with implications of not being able to sustain such interventions in the future.
The CBN’s loan interventions, totaling about N2.07 trillion, were meant to boost agricultural production, but the current repayment crisis highlights the need to reassess the strategies implemented to ensure that these loans are repaid promptly.
Recall, that the CBN issued credit facilities as part of its development finance interventions in the critical sectors of the economy, especially the agricultural sector. The aim is to improve access to credit, ensure price stability, and support the country’s job creation and economic recovery.
However, it has been difficult for the CBN to recover this from beneficiaries, forcing the bank to take extra measures. President Bola Tinubu reportedly directed security agencies to assist the CBN in recovering funds from borrowers, especially under the Anchor Borrowers Programme.
The CBN recently made a significant contribution to the agricultural sector by donating over 2 million bags of fertilizers, with a total value of N100 billion, through the Federal Ministry of Agriculture and Food Security to farmers. This move raised questions on whether the apex bank has resumed its suspended intervention programmes.
