The House of Representatives has proposed to the Central Bank of Nigeria the allocation of an additional $3 billion in funding to support small-scale farmers through the Nigeria Incentive-Based Risk Sharing for Agricultural Lending. This initiative aims to enhance the productivity of farmers in the country.
This proposal came after a motion was considered during a recent plenary session focused on strengthening the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending and mitigating risks in agribusiness. The motion was presented by a member representing a constituency in Anambra State.
The lawmaker highlighted the launch of NIRSAL by the CBN in 2011, a program aimed at managing agribusiness credit risk through a $500 million public-private partnership. Despite the existence of NIRSAL, the agricultural sector in Nigeria has been facing challenges and has not been performing up to its potential, despite its significant contribution to the nation’s GDP and employment rate.
To address these issues, the proposal suggests providing NIRSAL with an additional $3 billion to finance agricultural value chains and lowering the interest rates for agricultural borrowers. The House also recommended increasing agricultural lending by banks and ensuring that a significant portion of lending goes to smallholder farmers at reduced interest rates.
In response to the proposal, the House has urged the CBN to take action to increase agricultural lending and assigned relevant committees to oversee compliance and suggest further legislative actions as needed.