Food Crisis to End Soon as CBN Disburses N1 Trillion to Over 4 Million Farmers Across Nigeria
- The CBN has disbursed over a trillion naira to farmers under its intervention programme.
- The Anchor Borrowers Programme aims to end the food crisis soon as the CBN has disbursed the monies to 4.6 million farmers across Nigeria
- Recent data released by the National Bureau of Statistics (NBS) suggests food inflation rose to 23.75% in December 2022.
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The Central Bank of Nigeria has disbursed the sum of N1.07 trillion to over 4.6 smallholder farmers cultivating or rearing 21 commodities across the country under its Anchor Borrowers’ Programme (ABP). This is the cumulative amount the CBN has released since the programme commenced in 2015.
This was disclosed in the CBN's communiqué no. 146 of the Monetary Policy Committee meeting which was held on Monday 23 and Tuesday 24, January 2023 in Abuja, the nation's capital.
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The CBN stated that it disbursed N41.02 billion to several agricultural projects under the same programme between September and October 2022.
The Bank also released N300 million to finance large-scale agricultural projects under the Commercial Agriculture Credit Scheme (CACS), bringing the total disbursements under the Scheme to N745.31 billion for 680 projects in agro-production and agro-processing.
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CBN's Anchor Borrowers' Programme
The Anchor Borrowers' programme is one of the various CBN interventions aimed at stimulating production and productivity across the food sector.
The programme was set up following the Federal Ministry of Agriculture & Rural Development consultations with major stakeholders in the sector on ways to ramp up agricultural production, boost non-oil exports and diversify the revenue base of Nigeria.
Through the programme, the Federal Government hopes to provide loans to smallholder farmers to boost agricultural production, reduce food import bills for the conservation of foreign reserves and create jobs.
Also, it is hoped that the programme would create economic linkages between smallholder farmers and reputable companies involved in the production and processing of key agricultural commodities to increase agricultural output and ensure food prices.
The programme's loans which are either in kind or cash shall be fully repaid within the tenor of the facility.
The APB is the second-highest intervention programme by the CBN after the Real Sector Facility, in respect of funding level.
Food inflation in Nigeria
Nigeria has been experiencing food inflation for years as the recent data released by the National Bureau of Statistics (NBS) suggests food inflation rose to 23.75% in December 2022.
This figure shows a 6.38% increase from the 17.37% rate recorded in December 2021 and 0.49% higher compared to the rate recorded in November 2022.
The report stated that the food price inflation was visible in the rise in certain food items including bread, fish, yam tubers, cereals, potatoes and others.
The major cause of food inflation in Nigeria includes insecurity in some parts of the country, flooding in some states, increase in transportation cost, the rising cost of importation, rise in the cost of energy and the declining naira rate.
Expert says disbursement of money not enough to solve food crisis
An economist has reacted to CBN's disclosure of the trillions of nairas it has disbursed to farmers in the last few years, in an effort to solve the current food crisis in the country. Ifeanyi Ubah told Legit.ng that the government needs to do more than fund the farmers. He said:
It is good that the government is providing loans for farmers, but without solving some of the major issues causing the food crisis, food inflation will continue. The government has to tackle insecurity in the farms in the northern part of the country. They also have to support the local industry so that people will import less. They also have to find a way around the depreciating value of the naira against the dollar.
CBN threatens to arrest Anchor Borrowers loan defaulters
Recall that a while ago, Legit.ng had reported that the CBN had threatened to arrest farmers who had failed to repay loans they obtained under the Anchor Borrowers' Programme.
The CBN reiterated that it will no longer tolerate defaulting on loans as it has found out that some of the farmers get the impression that the loans are gifts from the government.
The CBN stressed that delay or non-repayment of loans makes it difficult for the apex bank to steadily continue the programme and reach more farmers.