The Director-General, African Centre for Supply Chain (ACSC), Dr. Obiora Madu, has said the government is taking steps to improve trade finance avalability to address the gaps in agro industrialisation, growth and job creation.
Speaking with The Nation, Madu said the pool of funds established by the government was to serve players in the sector, hitherto underserved by financial institutions.
The situation, according to him, requires the government to promote and support bank-intermediated trade finance activities, vital for Small and Medium Scale Enterprises (SMEs) access to capital and credit insurance against global trade risks.
The absence of export credit guarantees, he noted, was hindering the involvement of banks and agri entrepreneurs in export business.
He said the economy needed trade and credit risk insurance products that encouraged foreign direct investment and trade.
Madu noted that agribusiness held the key to meeting the demand for food, particularly processed food. The availability of credit for producers, he said, would smoothen the shift from primary production to modern integrated agribusiness, and provide opportunities to many farmers.
According to him, funds provided by the Bank of Industry (BoI) and other financial service players, can boost agro production and exports, help entrepreneurs hire more hands, and highlight the critical importance of trade credit to economic growth.
Such facilities would help to support the expansion of agro business operations as well as provide for critical inputs, such as chemicals, pesticides, farm machinery, spares and equipment, which the country is in dire need of to revive its agricultural sector, he said.
He said the demand for trade finance could help Nigerians explore new opportunities.
Madu expressed satisfaction that the government had introduced reforms to develop the economic and financial system, including trade finance for SMEs.
Meanwhile, President, African Development Bank (AfDB), Dr Akinwumi Adesina, has urged countries to institutionalise systems to support agric trade.
Adesina, who spoke at the Sasakawa Symposium on “Contributing to social security and jobs through agriculture: 30 years of Sasakawa in Africa”, at the Sixth Tokyo International Conference on African Development (TICAD VI) in Nairobi, Kenya, maintained that creating markets, developing infrastructure and providing finance for farmers were key to transforming agriculture in Africa.
Adesina noted that these factors were necessary to transform agriculture into a wealth-creating sector which generates income for farmers.
“Governments can do this by developing agro-allied industrial zones and staple crop processing zones in rural areas. The zones, supported with consolidated infrastructure – roads, water, electricity – would drive down the cost of doing business for private food and agribusiness firms,” he said.
Such zones will create markets for farmers, boost economic opportunities in rural areas, stimulate jobs and attract more domestic and foreign investments into rural areas, Adesina said.
“They will turn the rural areas into zones of economic prosperity,” Adesina said.
Minister of Agriculture and Rural Development Chief Audu Ogbeh reiterated the significance of extension services, regretting the low number of extension workers in the country, which stand at a ratio of one extension worker to 8,000 farmers.
“Farmers need support and education on new technology that will help them to reap maximum benefits from their farms,” Ogbeh said.