Credit to the agricultural sector, a major contributor to Nigeria’s Gross Domestic Product, dropped to its lowest amount in at least two years, official data compiled by BusinessDay has shown.
The data from the Central Bank of Nigeria (CBN) shows that out of the total credit of N39.1 trillion allocated to agriculture, industry and services sectors by other depository corporations (ODCs) in the third quarter of last year, agriculture got the least of 4.69 percent, down from 4.91 percent in Q2 and 5.88 percent in Q3 2022.
In terms of value, the agricultural sector received N1.83 trillion in Q3, down from N1.84 trillion in the previous quarter.
“Total credit extended to key sectors of the economy by ODCs increased by 4.3 percent to N39.1 trillion in Q3, compared with the N37.5 trillion in the preceding quarter, reflecting efforts to boost economic growth and create jobs,” the report said.
It said credit to the agricultural sector, however, declined marginally by 0.4 percent.
“In terms of share in total credit extended to key sectors during the quarter, the services sector remained the dominant recipient, accounting for 52.3 percent. The industry sector followed closely with 43.0 percent, while agriculture accounted for the remaining 4.7 percent,” it added.
Read Also: Bishop Kukah Charges President Tinubu To Prioritise Food Security
The sector had the least credit allocation because CBN suspended the Anchor Borrowers Programme, said Ibrahim Kabiru, national president of the All Farmers Association of Nigeria.
“Many loans were not utilised accordingly and so the CBN stepped in by making policies to guide the sector from misappropriations. The bank saw that it was a bad investment as many of the loans were not getting to the right quarters,” he added.
Bolade Agboola, an energy and consumer growth analyst at Chapel Hill Denham, said the CBN saw that the intervention was not getting to the right farmers, so policies were put in place to curb corruption in the sector and get results from previously allocated credits.
“Looking at the recent GDP report for Q4, we see that the agricultural sector’s contribution to GDP reduced compared to other quarters. This means credit allocation affects the sector,” Agboola said.
Last year, the sector contributed 25.18 percent to the overall GDP, a decline from 25.58 percent in 2022. In terms of growth rate, the sector slowed to 1.13 percent from 1.88 percent.
