\1 IlcBUSiN£$s 21
Nigerian Tribune
MO;>JOyl'"t~ket
IN]L)1J§TRY
its developmental roles -&nusi
NACC reiterates support for bilateral trade Py32
-. Economy: CBN'll continue to play Py 2.
Monday. 30 January. 2012
r;~1<qX IPMAN western zone faults national body's claims Py33
Agriculture and govt's renewed interest Od ldllOll Om ....Jtha.ule". w,os
T
"£ pial
~
of the
agrkultu.-.I scclOf"
In the naUon's economy catIno! be overcmpha.L c,1 It
occounls rOt'
OIV 40 peT
Flight Schedule
MUte AIR
~;.';'-AbUJ' Ol. -5. 10.20 t6 '0
15.20
1'.45
(Nol'I-Frl/S.I/5ul'l)
DANA
Lo.-Abi= 01120. 09.00
12.15.
::t!"n:.p~~:~i IS un)
international Fllghta 0.11. Deput."t Atn".1 Lo.-Athnt. 23.00 15.00 Vhp AtJ.nllt"
~:.8:.-Lo"o" 16..55
A n' LOl-London 11.35 8_lnl •• LOI·Dub.1
16.4(1
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.
02. 40
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LOl-Doh. 14.55
2355
SAA
t:~o·~ur.
tcl';.nt~:
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0.530 06 ..
-Lan do ..
23.30
<5 ..
cent
or
the
Gr085
Domcslk Product IGOPt and pro¥tdcs ~r 60 IX' cent of employment li owcvtet, thl! s~ctor Kprescnta <Xlly I ptt exnl
or,,,,,,,,,,
Ova' Ume. agnculwral growth has slowed down and today It ls undcr p~rforh1ll1g
despH~
for a shift 01 focus from 011 to othn- RCtora of the economy. the: agr1culture ac:ctor til parUcular R«ently. thc fede:ral Government launched Agrlcullural Transrormation Agenda In line with tts stralcgy of using agrtculture as a key driver Gr the national economic lrllnSfGnnaUOn
disburse funds to I&nners al alnglc digit Interesl rate. while under the agro-Input and seed dlstribuUon, goycmllleni is targe:ttng nVl! million farmeJll aa agalmlt nve hundred thousand farmers who had been benerttlng from gGvernment subsidy In I
they IllOf"I!: or as bc:aIme poIllk:ai adV'Clltures Alrlcultural Crcdlt OUATanlec Sc.hc.rac l'u.ad IACGS') The ACGSF _as established by Decree No. 20 of 1977, and s tarted operations In April. 1978. Its ortglnaJ share capital and P'lid up capital wue HIOO mtJllon and HS5 .6 million . respcctJ~ly. 1llc Fe<kral Gow::mmc:nl hokb 60 per cent and tht' CBN. 40 per cent Gf the shares. The capital base of Ihe SctKmc was tncrEas<d to N3 bUiIon In MIlI'dl. 200 I The Fund guaranlccs e:ruIlt factlttles Clttended LO farmc:rs by banks up Lo 15 percent o(tl1I!amount In default net of any security realised The Fund Is managed by thc apCltbank. wl lteh handles the day-to-day opc:rati0n8 of the scheme The gUldellnc:a stipulate thc eligible enterprises fGr which gUOraJllec:a could be Issued under thc SchC'.me Betwecn 1978 and t 9S9. _hc:n thc gove rmn e:ut stipulated IcndIn& quOlaS for banks under the scheme. there ..... consistent lne:rcaM In the. I~ndlng portfolloe 0( bank. to agriculture, but aner thc lkrcgulaUon of lh~ nnnndal SY:'ltt'm
banks atarted shying away by reducing their loans to the: IICCtor due to the' pt'rcelved risk In order to rever5~ the d«lInlng trend. sevcnl JnnovatJons and prnducta were tntroduced under the Scheme such as: aclfhelp group linkage banking. lIust fund model and Inten:tlt dnllw back ACrleuJtural Cred.lt Support Scbeme
nlonnous potenUals In partk'ular, funding le~1 In the sector sland5 al (ACSS) about 2 per exnl of thc: The ACSS Is an total lending of banlui u InltlaU~ of the Federal against 8 Pt"-r cent In a Government and the country Uk~ Kl!nya SomI! Cenln l Bank with the of Ihe rc:a8(I08 for the k)w actlv(' aupport and funding Includc: lack 0( participation of the undualandlng or Ihe BanJtenr' Commltltt 11M: agrleultur.l s~etor, schC'me has a prc:scrtbed percc:lved high rl5ka, fund of NSO bmlon ACS5 com plc:. credit was Introduced to enable .s cssmC:1I1 pfO('~"a farmera exploit the procedure and high untapped potentials or transactton costs Nlgerla's agricultural It Is a paradoll: lha I lhc IoCCtOl". reduce Innallon. placc of agrlcullure 101Ver the coat of nnance In the polUlCS agrtcullural producuon II alldeconomyofNIgtt1a Is c. food Items). generat~ so V8.rkgIIled and lends surplus for e.port. to be much abu.Kd Inc:n:aK Nlgeria's fOf"C'tgn In a nutshell. the earnings. as well as dl5COVUY or 011 and subeequnlt shlO or focus divers"'" Ita revenue: ba.soc AI national level. the to the black gold sounded scheme operates through a death knell on the a Central Irnple:rnc:ntatton agriculture sector CommUttt ICICI whllc at NIgn1a earm over SO per cent of her rtVcnue from -Akinwuml Adeslna. Ihe Fed('ral Capita l the petroleum Indusuy, If'"uler qf Agriculture TerrllOl"y 1FCT'1 and stale according to several agc::nda President Goodluck levels . Ihe scheme reports. but Ihe sector Th e threc: prong .Jonalhan emphasised (Continued on page 22} actually att'QUnts for IeIIII approaches are agro- Ihal the project .... s a lhan 14 per «nl of the Input distribution. commitment to the total GOP. whereas devdoplTlCnlol'lmjJfOVed transformation of the agriculture comlnands an seedlings to fannenr and agricultural &eClor of the 11 Impressive poalUon In qr1Culturai nnand"g. A economy. with the Uds reslX'ct. kcy element of the primary objective of ACTlNG 61OU' IUSlHm lDtTOI Thc: Impact of the a g ric u I I u r a I ensuring food security acctOf" Is not being fe:1t by transformation lnilialive whilst promoting Cltport Is Ihe promotion of In.grlCllttunvaJuechain thc: averagc Nigerian MAlfTUtlE AlUlA Major1tyofpcoplc lrnppcd agricultural flnanclng 1Vhett the counlfy has a w. ............. ,...., ...... ~ ....., In the poyt'rty ~b dwd through th~ Nigeria comparative advantage LUOUI P'IOI"UIY & (NViIOMlNT In rural artas. which Incentive -Based Risk laIUat.h·c. ~-&.,......c-.....~ a..to... ___ ~"'" hold3 aboul 80 per «01 Management SJ1II~m ror Bdore now . or the national Agricultural Lending successive gove.mments, CAPRAlMAlllT AVlAJlON population fNIRSALI. which (OCU5CS banks and other prtvate "..,r-....IOW .......) W. . . . . . IGW......., Over the yea fa on de riSking lhe e.nUn: COIlCCffi5 ha~ c:mbarkc:d lIMOS & MAIIITlIIG IHSUIAHCE ~mmLS al all levels agricultural mue d18Jn on varytng InlllaUves to w. ....... (OoW .........} .............. Iaw .....) and some prtvale and then:by altl1lcttng the dcveloptheS«lorandby con«ms ha~ embarked desired now of extension boost food rrmU(OM IIIIOHrrMAUO Gn sevc:rat Inltlatlve.s Invealments from Ihe producUon. these efTorta S-~rs-""', OM..~CS-"""" aimed at boostlng rood prtvate ac:ctOf" and fordgn il<n''CYer tur~ not ykJded (otIII[lCf & IHDUSTIY producUon In the country: InvestoJll Uw: muchdesl~ n:tIult ...... 0wIIIrIII1""'" ~uably not much wu Under lh~ agrk'uItUrt n1l!n: wu both the Crttn achl~ In this regard nnanclng. the. Ce.ntral Revolullon and Its Reeent df'velopmenLS Bank or NlgcrtaICBN). pU'Cieceuor. Operation In tllC naUOn's economic ",III collaborau' wllh reed the Nallon 'o,pcac"':=...c"'Co"<o"c'oo"'c::"' '''-OcOR" ''O'_Cco"" mCm c..:.ercial ban~programme~In~"~,~,_.... "",~t::'oJL_ _ _~'"==~'=!~~t~,==~,.~,:t==_ _ _
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22 ".... TribuneBusi £$8 ~~~M~on~'JI ••~y~,~so~J~.~n~ua~ry!,~~~12~________~~________~;-____________---------.--:-~~~~~:;~~;;;;~Th ~.;;~Q~B~~~~e.*tlY 1•• TribUD.
Agriculture and govt's renewed interest ?;~ut~~::,:
~fnJm f1Ot1&2J) opc.l'1It~
lhn<ugh State Implemelltatlon Commltlees ISICsI IultUlulcd to I MUI'C UlolI! the objecth·s of the scheme an' realised W1UklUt hbldJ·moc.. To aca::M )o JanS under ACSS. ' ppllc:anlli Ipractidng rarmers and agro-aIlled mln:prmmre wHh mea 151 sre ~lo .pprtJilch
their bsnks ror loans throu.gh the rupccUve state c:bapfCl'll 01 fan:nc:rlI aMOCl.Uons and State Implementallon Committees. Howe ..er. large acale CJlnnen are allowed under tWo aeheme to apply dll'Ci:Uy to the banlLa an atCOI'dantt with the guktdlne6 ACSS funds are dillbunKd to r>moen and agro-allled elltrcprUlC\us at • slogie dlh'll Inte.-esl ntc 01'8_0 pcr.:eziL IU the commencf'mr-nl of the project 'UpJKlr1 . banlu will Irani lo.ns 10 qualtncd appllt·anut at I" 0 pcr ,'ent Intues' rate AppIkanlS who P'lY back" thclr fad III~ on &c:hcdule 'n! to enjoy a rebatc of 6 pc::t c:rnL lhU5 reductng t hl' dfeclln rate oIlDtrt'el!J I to be: pakl by fanncnI to 8 0 per a:nl ComrD lI:rc lal A. ,lc uIUuc CredlL
output . generate emplo,ment . dlve"'Uy Nlgerla'a J"e\'enue base. ralK tbc Ievd of rordgn exchange earnin gs and prOVide Input for m.nuraeturlng lind procesSing on .. sustainable basIS Accordlnl to s CBN report relcued III Aprtl Ia.5t year. alnce: tncq>Oon In lOO9, lhc: CBN under thc Khone hAs ""Icued N133 . 11bllllon for disbursement to 139 beneOdarSc::e mAde up 01 115 IndiViduals / prtfttc pmmoten.. Aa at Utcn. It ..as reporled Iha' 24 .l.te gove.mmenta and 13 banka were participating III lhe .dleme. The balance: of CACS run lls as al April 2011 was N66..890 bWkJQ.
m lllloni This ttlI;.'ChanI5m rates banks based on two ractonJ. the. eUcc:U~ of their agricultural
Ie.ndlng and the IOCla'
Impact and mak~ thc:m
available for the pubUc.
Banle Ince.ntlvu Mechaluam fUSe 100 mUUon1. Thls ~hanl!U11 offers wtonlng banks In Pillar four. addlllonal tnccnltves to build Lhdr k)ng~term cnpablllUes 10 knd to agrlnUture. It wW be In terms of cash awards
•
tripartite
MC'.mor andum
of
Undcratandtng (M oUI 10
provide. N30bllllon (undlng for the. agricultural InpuLS fertJllura and see<b for the 2012 rarmtngeeUOfl. In January. seed and
Qnal1Kd partktpIllJOn In
AJ:sodaUoD (AF'RACAI
the
conference In AbujL
namely ; N::I:t::s! Bank Ac. ~ld Bank Pte. f1t'StBank Pk. GT Bank Pic. Oceanic: BulkPk:.EcoblnkNIga1a
fc.rullMr companlo and agrv-deaJcn have started accnslng single d igit loans from DepoAIt Mo n ey Banks IOMB.I .ero.. the country foUowlngtheexr:cuUonof' the lan dmark funding
Tbe KtRSAL Coa~pt
UIIISlan~
1
CBlf govnnor
1l1e NlRSAL targets an: to generalc I1D addItJonal uss 3 billion or bank kndl.ng Wlthln 10 yean 1.0 Inc reue agricultural Iend1n& rrom the CUITftlI 1.-4 to 7 per ttnl of total bank lending; InCreaK lendtng to thc ·poolw9 $DUlI1 fa.nnu sq1I1ent to 50 per cent or thc total Ityplc:ally. banu do not reach lhctle produeenll Indlvtdually bul UU"O"Ugh ·pools· I.e agg~aung mediators. aueh as MFls and coopn1IU¥'e5); reach 3 _8 mtlllon agrtcultural producers by ~0!'.l0 lhrough pooling mechanIsms .uch a. valut: chlilns , MFls, and c:ooperalJVeS. and rcdutt banka' break -even mlc:rmt rate to'"bornJWenI from 1-4 to 7.5 -10.5 IX" ocnl NSObD (u.ad1n& ror a.rleuJtun.! laputa In line with Federal CiO'llt:'nlment'S agrtc:ullun! lnnsformauon agenda tile federal Ministry of Agriculture and Rural Development In partncrahlp wl UI thf' fedual Mlnl.try or Finance and depoalt n~~ ba.nka (DMBa) on November 29. las, year
.chem!:
Spr:aklng a' tht: a'mt.
oIl.hc CON. Mr Lamldo Sanu.I, admitted lhIIt agrtcuIlu~ occupkd a pOorIly statu.! til the naOona1 eeonomk:a as Ole Ketor .served as the Gow;:mac"
Stanbk: IBTC. Stc.rUng Dank Pte:. UBA PIe, Unkln BankPk:and1..cn!thBank fJk:.
PIe,
NIRSAL .. a dyna.rruc. holistic: approach that laclda bolh the 'grlcultural value dlatn and the a~rll: ullur.1 nllanclng va.Jue chaIn N II~ doee two things a t once ; n.xes the a8rtcuILunll valut' cham .M) that banb can lend wilh conndcnce 10 the sretor ami. encourage_ b a nks to lend to the .grtc:ullU .... vailic cham by alTering lhm"! .trong IIlcenllVC!l and Icchruc:al
NIRSAL . unlike or Illi prnIoua Khc:mee wblCh dNdopmenta ' l aic. lilt' mcournged benka 10 lend CON In cc&bof1l:Jon Yo1th wHhout ekaT stnllcgy to the fede,..1 Ministry or lhe enurc s~trum or Agriculture an.1 Water the agricultural value empha.11es Resourcu IrMA&WRI chllin. eslabllshed lhe ~ndlng to lite value cbaln and to all st~ea of Commc:rdal Al1lcU1tu~ Credit 5cbemc (CACSI til producers The~ are five: plllarw lOO9 lo pnM<lc rtnancc ror Ihe eountr,'s bc:.lng addressed by an agr1CUltul1Il vnJue c:haJn c:st.tmaled US8500 mnuon Iproducuon. proress1ng; of CON mOflC, thai wUi be InvulLd as foUowa~ .torage ami nl. ~keUng) rusk s llannR fadllty Inerea.cd prOliuetion tUSS 300 million ): TIlta arlsln, fro m the component wtll addresa Intc"enllQn would moderate InOaUonal')' banka' pc:n:cpOoIl oI lugttpnssun:s and a!lIIl5l Ute rlska In tb~ seClor by losses on bank to a l'l1le\1: lUi goat sharln, of pritt lI~bllltv In the agt1rultu'" kJam Insurance Facility ,,",nlTJ tUS8 30 mililani : nle ~ prun&ry ohjedt.ca or the scheme are to; far llll,... prtmary goal W10 Insurance rut -track the expand deyclopment o f the ptoducts fOf" agr1CUllurai agrkultuntl SCi- tllr of the lending (rom the CUn'Cllt NIgerl.n eeOllllmy by covc:ragc to new producu. proVidln, credit fadllUca auch a.5 waUler Index to ~«.ak: cuounerdaJ Imurana: . new ..nan .. fannl''' a' a ""n~c digit or peal and dlscase Inletnl rate enhance Ins uBDCe and so on Technical Assistanot nauonaJ (ood ~unty by InUaJIIlu.g ro.:>d aupply "adUly fUSS 60 mWkJnl and c:rrecilug lower Thl! wtll equip bana to IIgncuJlund pnoduot and lend .su.taln.bly to produets p1crI. tberdJJ 1!I8r1cu1t~. prudUCCI1l to promoting 10"· food borrow and uae loans Ulflauon; fCdm e the coel more errecu"dy and or CrWJl In ag~ltural I~ outpul o( bc:tLer agricultural produC::lIa n t o enable quality f.rmers ex"lolt the prod .... BolbUc Bank Rating untapped patrnUal. of lite sector: and 1nc::rea5t: Mechantsm (USS 10
Sc:hemc teA As pan
algned
agreement "tlh thc O M B8 . the Fedel'al Government throug)l Ote OMO or thc fe d eral MlnlStty of f1na.nOc. ha.1I Issued .ove relgn guannt.ees ID Ule banu 8CCUrtng 70 per ttnl of the pnnc:lpal ofkJClns granled by parllclpaUng banb thus g ranting agrodeakn ac:ceM to funds requIred (or aucceurul take off of the cUrTenl admlnlstratlon ' s Agrlcultur.1 Trans(onnauan AgmdL Some of the aced companle. tha i arc already benenltng from lhe .chemc Include : Savannah Seed Ii Uveetoc.k Umlled. 5«d Project Company Umllcd. Manama Seed. Nigeria Ltmlted . Nag.n Seeds Nigeria Umlted and Oa AD Green 5eeda Umned TIlesc: COlDpllllIlCS wm In turn purcha.se the Ke<b rrom oul-growers ac:rou the country II IS notcworlhy that If nnt purdl.ued (rom lhe out~ lOr dbII1buUon to Cannets. the seeds would ba.\IC (pte 10 waste or IIOkJ (or paltry sum. Ulcrc:by resulttng 1I1 huge k:J88es f...leYen bR.nka haft:" Cat"
Deposit MODey ButIls Banks in !hI!' country uc Individually and coUecUyely fund ing lhe agrk:Ulture acctor Apart frompartnertngWllhsuch organlnuons like Ihe Alliance fo r a Green Revolution In Africa (AGRAI. a dynamic partnu.l)lp working across the Afrtean conUncnt to hclp mtDlonS of smaU -Kale fanners .nd Ulelr families 11ft lhcm8elvea out 01 pM:t"Iy and hunger. the banks under the umbrella of Banker.' Commltlee Is (Inanelng va rious agrtcu1IUJ'C InttlaUva. R£eenl rq:JOIU.oowed that Niger'an banb nlscd cretin Inlcrva\llOn to the agncuhuraJ 8C(!tor by about <10 pu cenl as the Indus'ry moved a •• e'. 10 c::rHlcal CCOIlOmlc a.«tont 01 the economy , a departure (rom flnanc:tng operators In lhc nnandal markeUi as wdl as Iradlng activities. Nxordlng to Ute report uUcd: 13anb"' (DrwnMter Economic l)eouelopmt"n' Agenda and 5ctKecard . •
"" "" ....... 01 "'"""', wealth creation and povaty rcduc:uon. *'dIng th_t II was the leading economic acUvlt)' tn the St.Ib-&hara.n Afnc:a .. It eootrlbutdl 20 to 30 per call 01 1m GOP Hc ~retled that Ule future or agrk:uhu~ In lhe aub-saha,," Mnca .... clouded wtth KYd1l.I unc:c:rtalntlc:a that lndude Increa.lng resource Kafdty. hclghtr:nc:d nska rrom climate change, higher energy prICes . ckm&nd (or lHo-fuds and doubUi about Ule speed 0( tedtntcal progress IIc proJected the annual demand ror agribu.lness nnanclng 0¥'Cr the nut "0 )'QTI at 885bUlion per annum. compared to the currmt .nnual (und supply of SI .5 -S5blllton , staUng that thl. presented a huge finanCing lap lhat needa to be crlllcally r::. :amtned Ilnd develop pollCIU and
"IP"_,""""",,by a nominal "alue of N212 6" billion u at Octobu last year. wllIdl ~prucnlcd a 37 .6 per «'111 IncreaK ~r 2010
-" The
report also that Icrtd!ni to Ole qnc sector fOlIC by 1.78 per cent of totai IVOS5 lending In the banking uctor by October last ycar. as aga'nsl lhe cornP'lmble pet10d 01 Ille ~ted
Im~lemenlatlon
rrameworks 10 minimise t.he gap til the: IntCfUt or agrInIltural dc:vdopmcnt
.
""'-
nlC.po:bank~
that the c:utTeflt funding needs of lhe aec:tor ~ targcly due to 115 pr:culiarlUU which Includes long le.tallon pe.r1oda for .grkult\lral productJon: Ille mila and uncertain lie. rrom natural caU5e!l and the p~domlnancc of "mall _Ic producenJ.nth little a.saet base and working
~
apUai
lie submitted Ihat the form.1 banking system In the conUnenl do not hllve the capa.ctty. ~,..,... The Banken' .klll. and ruourt cs to single-handedly nnan« Committee had In 2010 rollowlng a retrcat In the: e.xpected cxponentlaJ Cal.bar, Cross Rivers growth In the .grlt State. takm a potlUon to "-etor In view of Ihe.sr:. he nllanee: c:r1lkallN:Cto'" of suggested the need to litc eronomy .. a mllJor evolve siratelle. 10 de:panure from nrnlndng atlract long term opeRton: In Ute RnandaJ marke's .nd tndlng nnandng In thc form of aeU .. tUu In a bid to bonds. debe.llIUf'CS and '#alture capital funds ensure aua'alned lie rec:ocnmended thai t'COf'IOUllC dcvc.lopment in rellulatory and lel.1 lhe country reforms be ulxkrtUen In NIge1'II111 Agr1culluml. to empower Cooperallvc and Rural order OevrJopment Dank c:orponne Inveslon suc h Limited sl.o .ald . . truatJI and Insurance pension recently lhat It had com panic. . and other disbursed a lotal of (und. N38 ,&bllllon to nlUln~ lnsUtuOOnal IoftSlon lo proride austainabie long varlou. types term fund through agnc:uIlural KUYtllca Instrument. suc h a. can Go"ecrDor 00 -.r1cuJtun: _d lu banda. wa.cranta. luxs _ wdI as chaUe_.ca
.,
equl~