N100bn Funding: CBN Shares Important Update to Farmers, Announces Date for Food Prices to Fall
- The CBN has announced N100 billion in funding to the ministry of agriculture to provide fertilisers to farmers
- The CBN governor emphasised the need to maintain price stabilisation amid the rising inflation witnessed in the country
- Before Cardoso's appointment, the CBN had employed this form of intervention to help farmers, especially with the Anchor Borrowers' Programme
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Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
To reduce the nation's high inflation rate, the Central Bank of Nigeria has stepped up efforts to increase food production.
Source: Getty Images
On Wednesday, March 13, the apex bank announced that it had spent N100 billion buying 2.5 million bags of fertiliser for farmers.
At the Federal Ministry of Agriculture and Food Security (FMAFS) headquarters in Abuja, CBN Governor Olayemi Cardoso gave the 2.15 million bags of fertiliser to the agriculture and food security minister, Abubakar Kyari.
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CBN to maintain price stability
During the handover ceremony, Cardoso emphasised that maintaining price stability was a primary duty of CBN and that the cost of food was a significant factor in inflation.
In a Vanguard report, the CBN governor said that this is because food and non-alcoholic beverages account for a sizeable amount of household spending in Nigeria.
Cardoso stated:
“This reinforces the critical need to address food inflation as a pivotal aspect of managing overall headline inflation rate."
He clarified that although the CBN had been taking several steps to reduce inflation in the near term, rising food prices had continued to be the leading cause of inflationary pressures.
He noted that although there may be some temporary inflationary pressures, the government expects a significant reduction by the third quarter of 2024.
Cardoso stated:
“This is precisely why we convene today to strengthen our collaboration with the Ministry ofAgriculture mitigateg the surge in food prices.
“In alignment with our strategic shift towards focusing on our fundamental mandate, the CBN has veered away from direct quasi-fiscal interventions and transitioned towards leveraging conventional monetary policy tools for executing monetary policies.
“In this light, we aim to extend our support and foster closer ties with ministries, departments and agencies that bear the mandate and expertise to undertake these critical initiatives,”
He added that as a result, it seeks to strengthen collaboration with the Ministry of Agriculture, supporting efforts to improve food security and production, and eventually reducing food inflation and strengthening our commitment to price stability.
“In pursuit of these goals, we are delighted to announce the allocation of 2.15 million bags of fertiliser valued at over N100bn, which we humbly hand over to the ministry of agriculture.”
CBN embraces earlier pattern
The central bank's primary method of intervening in the Nigerian fertiliser market before Cardoso's appointment as governor of the CBN in 2023 was making credit more accessible through initiatives like the Commercial Agricultural Credit Scheme and the Agricultural Credit Guarantee Scheme.
Through these programs, the CBN encouraged banks to provide farmers with loans at favourable interest rates. This makes buying fertiliser and other commodities more accessible for farmers.
The central bank also helps farmers indirectly by lowering the cost of loans since its actions can result in farmers paying less for fertiliser.
CBN moves to recover agricultural loans
Legit.ng reported earlier that the CBN has concluded on directly deducting from the bank accounts of loan defaulters under the Anchor Borrower Programme (ABP).
Celsus Agla, senior manager of the CBN's Development Finance Office in Port-Harcourt, announced this during a meeting with maise farmers and other stakeholders.
Agla said some farmers who obtained loans through the Anchor Borrower Program have ignored repayment requests, and some describe the loan as a grant, forgetting that their bank verification number was included when they applied.
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Source: Legit.ng
