FBN Holdings Plc’s total loans to the agriculture sector in the past five years are less than three per cent of the bank’s loans and advances to customers, findings by The ICIR have shown.
The ICIR discovered that the bank lent N285.18 billion to the agriculture sector, representing 2.29 per cent of N12.42 trillion in total loans and advances to customers.
Gathered from the bank’s 2018 to 2022 financial statements, The ICIR’s checks showed that FBN Holdings’ loan to the agriculture sector relative to its loans and advances to customers stood at N2.72 per cent in 2018, rose to N2.97 per cent in 2019 and declined to 2.73 per cent, 2.25 per cent and 1.55 per cent in 2020, 2021 and 2022, respectively.
Out of N1.68 trillion in loans and advances to customers in 2018, FBN Holdings lent N45.87 billion to the agriculture sector and N55.07 billion out of N1.85 trillion to customers in 2019.
In 2020, 2021 and 2022, the bank’s loans to the sector were N60.55 billion, N64.97 billion and N58.72 billion out of N2.22 trillion, N2.88 trillion and N3.79 trillion loans and advances to customers, respectively.
Compared to other commercial banks like Zenith Bank, Fidelity Bank, Access Holdings, and Sterling Financial Holdings Company, the findings show that FBN Holdings’ lending to the agriculture sector was the lowest in the years under review.
For instance, Fidelity Bank’s lending to the agriculture sector grew by 539.97 per cent from N17.03 billion in 2018 to N109.01 billion as of 2022. Access Holdings followed with a 238.65 per loan rise to the sector from N17.002 billion in 2018 to N57.58 billion in 2022.
While Zenith Bank increased its agriculture lending by 130.01 per cent to N265.21 billion in 2022 from N115.303 billion in 2018, Sterling Holdings’ loans to agriculture jumped by 104.99 per cent to N81.26 billion in 2022 from N39.64 billion in 2018.
According to the Food and Agriculture Organisation of the United Nations (FAO), Nigeria’s agricultural sector faces many challenges, from low technology, high production cost and poor distribution of inputs, limited financing, high post-harvest losses and poor access to markets, impacting its productivity.
Experts believe agriculture, a critical sector for economic development, job creation, and poverty reduction, needs adequate funding to help support farmers and agribusinesses nationwide to improve productivity and reduce rising food prices.
Input costs hiking prices of agric produce
Many of the problems confronting food production in Nigeria beg for solutions, Segun Ajibola, a professor of Economics at Babcock University, said.
According to Ajibola, a commercial farmer, there is every tendency that if food problems are addressed, the issue of poverty will be almost solved.
The prices of agricultural produce have more than doubled or tripled than the costs of fixing farm inputs compared to two or three years ago, he said, adding that from his experience, about 30 to 40 per cent of what farm produce is wasted either due to problems of storage or transportation – having to carry goods to the hinterland.
“In my farm, for example, I constructed the road to the farm that is about five kilometres. I provide my water, power, and storage. Even when travelling from the farm to the cities, you face many road problems,” Ajibola said, stressing the need to address the issue of farm input costs.
“How do we bring down the costs? How do we help the farmers in the area of storage, transportation, off-takers,” he asked.
She said Nigeria must address these issues to avert food security challenges.
He lamented the non-existence of a marketing board, which existed years back, provided storage facilities, and created price stability.
The Centre for the Promotion of Private Enterprises (CPPE) executive director, Muda Yusuf, said there was no quick fix or silver bullet to crashing foodstuff prices.
“Food prices are a function of output, production, productivity, and at what cost can you produce. These are the fundamental issues,” he said.
He explained that nearly 90 per cent of the domestic foods consumed were produced by peasant farmers who mostly relied on the orthodox use of hoes and cutlasses to farm.
“Unlike other sectors of the economy where we have been leveraging technology, we are not doing so much in agriculture. How much can a peasant farmer produce? The population is growing. Most of them are still using hoes and cutlasses. Increasingly, there is a gap and demand pressure. That is one.
“Secondly, we have this problem of insecurity. Even a good proportion of them that are managing to do this production, many of them cannot go to farms,” Yusuf said, adding that the dilapidated roads from the hinterlands to the cities and the rising cost of diesel further worsened the situation.
Corroborating the issues highlighted by the economists, the national secretary of the All Farmers Association of Nigeria (AFAN), Yunusa Halidu, said, “High input and transportation costs are impacting the price of rice. The production chain is shallow; the consumption chain is higher than the production chain.
“Before now, it cost about N300,000 to N400,000 transporting a trailer load of rice from Kano to Lagos; it now costs about N1.3 million or N1.5 million.”