By Stanley Opara

Wednesday, 8 Dec 2010

The Central Bank of Nigeria has said the level of investment in the agricultural sector is not reflective of the nation‘s food security considerations and potential for economic growth because most banks are showing low risk appetite for agric lending.

The Governor, CBN, Mr. Lamido Sanusi, according to the communiqué issued at the end of the second Bankers‘ Committee National Retreat held in Calabar on Monday, said the financial system‘s participation in the agricultural sector had not kept pace with the country‘s socio-economic needs and expectations.

The Bankers‘ Committee had resolved to sustain the momentum of the CBN‘s on-going collaborative process with it (the committee) to actualise its objective of ensuring the financial sector contribution to the socio-economic development of the country.

The governor added that because of the importance of the sector to the committee‘s objective of national development, the CBN and the Banks’ committee would engage in economic advocacy with the government to engender definitive national agriculture policy framework that would provide the impetus for systemic change and unlock private sector involvement.

He said the CBN and the Bankers‘ Committee were committed to building capacity in banks to engage in agricultural financing, including technical training and leveraging strategic partnerships with local and international development finance institutions.

He said, ”The CBN, in partnership with the United Nations Industrial Development Organisation and the Alliance for Green Revolution in Africa, has embarked on a comprehensive strategy to define and implement a comprehensive framework to expand agricultural lending in an integrative manner that addresses the risks and capacity bottle necks along the agricultural and financial value chains.”

The governor said the Bankers‘ Committee restated the vision for a Nigerian financial sector that would play a dual role of ‘enabler‘ as well as ‘engine‘ of real sector growth and acted as an intermediary and a contributor to economic growth and financial stability.

”We reaffirm that given the current situation of the economy and the state of national development, the role of the CBN, deposit money banks and other licensed financial institutions in economic development cannot be limited to occasional interventions, but requires sustained involvement to actualise the desired results,” Sanusi said.

He observed that in order to consolidate the achievements recorded by the Bankers‘ Committee so far, the focus of the second retreat was on power, transport infrastructure and agricultural sectors where the need remained most critical and change would drive the development of other sectors of the economy.

Source: Punch