The economic recession may have offered an opportunity for the agricultural sector as the President Muhammadu Buhari’s administration has turned its focus on agriculture and solid minerals as a way out.
The Central Bank of Nigeria (CBN) is now well positioned to help develop the agriculture sector. It has provided billions of naira on local rice production and milling such that there are suggestions that rice importation may stop this year.
Agriculture is ultimately business, and is also profit driven. The apex bank is therefore expected to put the commercial banks on the drivers’ seat, and only play supportive role.
The CBN must deliberately encourage banks to play a leading role in agricultural development so as to make the sector more competitive.
In line with federal government’s economic diversification agenda Heritage Bank Plc in collaboration with the CBN provided N2 billion long-term facility under the Commercial Agriculture Credit Scheme to Triton Aqua Africa Ltd (TAAL).
The company’s strategy is to embrace backward integration through production of fish locally and reduce the importation of frozen fish and as well to assist small scale farmers by producing quality breed fingerlings.
After visiting Triton farms to see aquaculture businesses; nursery/hatchery for the production of fingerlings and brood stock in Ikeja and earthen ponds for catfish and tilapia in Asejire, Iwo and Gambari towns in Oyo state, Minister of State for Agriculture, Senator Heineken Lokpobiri, marvelled at the financial outlay of the project.
He said, such an accomplishment could not have been possible without a strong financial support from a bank. Of course, he was told that Triton Farms had accessed a long-term loan facility to expand its Agric businesses.
While taking the minister on a tour of the farms, the Group Head, Agric Finance of Heritage Bank, Olugbenga Awe, stated that the partnership between the bank and Triton Farm for local production will conserve scarce foreign exchange and enhance food security.
“Nigeria’s current demand capacity for fish is estimated at 2.7 million metric tons and the country currently produces 800,000 metric tons. Triton is now producing 25,000 metric tons and with them on board, about 25,000 metric tons’ capacity will be added to our current production, the company’s projection is to reach 100,000 metric tons in five years,” he said.
Awe stressed that Heritage Bank’s support for small scale enterprises is well known and most of the SMEs it has supported play in the Agric sector.
According to him, the bank sees agriculture as one of its heritage that can empower individuals and communities in terms of creating wealth from the soil and through the entire value –chain using value addition and industrialization.
In view of what he saw during the tour, Lokpobiri stressed that financial support from banks was fundamental to the success of any business, especially agro-related businesses which require long term loans.
The minister emphasised that investment in food security as Triton Farms had done with the support of Heritage Bank, was the most profitable venture any investor could think of.
With a deficit of over two million metric tonnes of poultry produce, and over three million metric tonnes deficit in fish farming products, agro-production in Nigeria has such huge investment potentials.
But the minister knows Nigerian banks are not interested in agriculture finance. Their hearts are in the oil and gas, and merchandising, where they are guaranteed quick returns. Even when the Central Bank of Nigeria had earmarked funds for agriculture to be accessed through the banks, some of the banks had connived to channel the funds elsewhere, leaving investors in the sector frustrated.
And that is why he was so impressed by the Heritage Bank initiative that he called on other banks in the country to finance more of agricultural projects as the future of the country is dependent on agriculture.
This is why Heritage Bank rightly deserves acclaim as “Nigeria’s Most Innovative Bank.” The bank has supported large corporation such as Triton to expand their production capacity and boosts import substitution. It has also supported exporters that export commodities or processed goods which ultimately conserve scare foreign exchange and enhance the country’s balance of trade.
It offers a long list of loan varieties, which include loans to small businesses. It offers loan facilities to finance shortfalls in working capital for traders and manufacturers.
Thousands of small holder farms in Kaduna and Zamfara states have benefited from the bank’s financial support for rice and soya beans production under the Anchor Borrowers Programme. To encourage more youths to go into agriculture, the bank is partnering with the CBN on Youth Innovative Entrepreneurship Development Programme.
There is need for the CBN to put measures in place to encourage banks such as Heritage Bank to continue to support agriculture. Unless support for agriculture and manufacturing is made more attractive for banks, only few with commitment to agricultural development such as Heritage will continue to focus on the sector.
The federal government, through the CBN, must accord some privileges to financial institutions that are partnering to develop agriculture and the economy, otherwise those supporting the sector now may soon drop out.
It is common knowledge that the Agric sector, with all its potentials, has never been an attractive sector for banks. And the reasons are obvious, it requires long term loan facility, and depends on the vagaries of nature.
Accessing Agric credit from commercial banks in Nigeria is a difficult enterprise, and a major reason why the country is yet to realize its full potential as a food basket for Africa and the world.
Heritage bank’s support for Triton Farm is based on this noble ideal. According to Triton Group Chairman, Ashvin Samtani, the farm, which is fully integrated in aquaculture, poultry and crop production is a platform to create employment for the teeming youth of the country.
Expectation is that if the Buhari administration is serious about job creation and pulling the economy out of recession, agricultural ventures such as the Triton Farms and several others of its kind must be encouraged.
There is need for a deliberate government policy to support such ventures, not just by facilitating access to long term loan, which is of critical importance, but by offering other incentives.
Undoubtedly this was the motive behind inviting the minister on the tour, hence the ministry must now pick the gauntlet and ensure it is a success as this is the fastest way to grow the economy. Nigeria has the land, the human resources and the market. What is left is for the government to create the shift towards agriculture by turning it into the new gold mine.
Wale Suleiman wrote in from Abuja
