The Challenges of Agricultural Finance in Nigeria: Constraints to Sustainable Agricultural and Economic Revival

Abstract

Prior to the discovery of oil in commercial quantity, agriculture was the mainstay of the country’s economy. The CBN, in its June 2012 report put the contributions of the agricultural sector to the GDP at 42%[a far cry from the immediate pre and post independence position of 65%], having recovered from its abysmal low contributions of 30% in the last decade of the last century, despite almost N300 billion that had been sunk into the sector through the ACGSF, BOA Ltd, CACS, among others.

This paper is therefore set out to analyse the performances and achievements of the ACGSF; BOA Ltd and the most recent CACS since their respective establishments about 40years ago. These are some of the Federal Government initiated policies, schemes and institutions established to ensure adequate funding of agricultural sub-sector of the economy with a view to sustaining agricultural and economic revival and growth. Its revival and development has been affirmed as one of the factors that could enhance the economic growth and resuscitation of the nation’s wellbeing which is still far from being achieved despite her oil wealth.

Using mainly, the secondary data sourced from the reports of these institutions, the CBN, journals, interviews and presentations of various stakeholders, the study concluded that though important as a factor of production, finance per se, cannot work in isolation of other factors to successfully achieve the much expected result in agricultural sector. These identified factors include among others, policy inconsistency and somersaults, absence of commodities marketing and pricing institutions, lack of effective and adequate storage, inadequate insurance coverage and more importantly, corruption.