Kudos to Ikpeazu as Abia receives N1bn CBN agric loan

The release of the long-awaited Central Bank of Nigeria (CBN) Agricultural loan to Abia farmers has been eliciting passionate interest and jubilation in ‘God’s Own State.’

And this is understandable, given the peoples’ yearnings, aspirations and priority attention the state is paying to agriculture.

For Ndi Abia, it is a promise come true and a demonstration of Governor Okezie Ikpeazu’s commitment to the sector, agriculture being one of the major pillars of the present administration. To realise its full economic dividends, the state government has made it abundantly clear it is taking it seriously.

Government believes one way of supporting agro-preneurs is by making credit available and accessible to them at low interest rate. Recall the Governor, while acknowledging the state needed to embark on large-scale agriculture, regretted that availability of key factors of production, especially land and capital, is big issue here.

“In the South East geopolitical zone where Abia State is located, we do not have the kind of land they have in other geo-political regions of the country. Added to the challenge of insufficient landmass is the fact that the available land is being shared between agricultural ventures, commerce and industry, which are all important pillars of our state economy.

“The implication of this reality, therefore, is that the kind of agricultural practice we undertake in Abia State must be scientific and precise to enable us maximise the best yield from the land we are working with,” Governor Ikpeazu said, as he marked one year in office on Sunday, May 29, 2016.

And also aware the development of the agricultural value-chain is capital-intensive, Ikpeazu advocates mechanised farming tools and equipment that guarantee higher yield for less labour. He went on to announce plans to have tractors delivered to farmers for mechanised agriculture.

On the perennial issue of funding, Governor Ikpeazu also hinted “there are arrangements with financial institutions to roll out various financing incentives for agricultural activities at reasonable interest rates.” He used the occasion to encourage Abians “to join cooperative unions since no one farmer can get all the requisite equipment and funding required for comprehensive agricultural value-chain development.

“The intervention and support funds we are accessing can only be given to cooperatives and not individual farmers so I call on our farmers to endeavour to come together and form cooperatives.”

Agricultural financing in Nigeria has been quite below expectations, with lending from commercial banks to the sector hovering around 3 to 4 per cent of their lending portfolio. In fact, financing gap for agro-related businesses was well captured by Dr Innocent Okuku, head, Commercial Services, Notore Chemical Industries plc.

“From production side, there has to be more finance for farmers to be able to adopt and use good farm inputs and equipment on their farms; there is need for people to acquire land for farming so that if you go to a location which is not your place of origin, and you want to farm, access to land is a big issue except you can afford to buy.

“So, you need finance for those kinds of things. And then when you start to talk about the cultivation itself, there is a lot of financial needs along those lines and even where the produce gets harvested, value addition is another area where financing is very crucial.

“Report has it that in Nigeria we lose about 40 percent of agricultural produce to spoilage and postharvest. So, we need to have a structure where people can be financed to acquire small equipment that farmers can use to create the first layers of value addition even if it is not taken to finished goods. Finance is required even in the marketing of the agriculture produce.

“If you compare things that are imported into Nigeria with those that are produced in the country, what comes out is that their products are better branded. All about of branding and core marketing work require financing. So, if you look at the entire value chain, there is huge need for agricultural financing,” Dr Okuku revealed in a recent interview with Daily Trust Newspaper.

Since Dr Ikpeazu identified agriculture as the key to unlock Abia’s non- oil resource potentials, he and the Commissioner for Agriculture, Hon. Uzor Azubike have been churning out policy frameworks to spike the largely neglected sector. The efforts have now paid off with the release of the CBN Agric Loan facility, which was made public on Tuesday, June 14, 2016.

In a press release, the Chief Press Secretary to the Governor, Mr Enyinnaya Appolos, announced the state had received a N1 billion  (One Billion Naira) Commercial Agricultural Credit Scheme Loan from the CBN. Appolos said, the Commissioner for Agriculture, Hon. Uzo Azubuike, and his Finance counterpart, Mr. Obinna Oriaku confirmed receipt of the loan by the state.

He further explained the single digit loan of 7 percent interest with moratorium period of six months, is an intervention in local agriculture to ensure farmers in the state engage in all season farming.

Uche Olehi, a Pubic Affairs Analyst, writes from the University of Port Harcourt