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Amid the campaign for a shift of emphasis from total reliance on oil as the main foreign exchange earner, Nigerian banks appeared to be rising to the occasion by providing financial backbone for agriculture in line with the Central Bank of Nigeria (CBN’s) directive. Festus Akanbi examines the input of Skye Bank in the Imo Hill Farm project
As attention shifts to non-oil exports as alternative foreign exchange earners following the instability of oil revenue in the last couple of years, the Federal Government appears determined to elevate agriculture to the front burner by offering a package of incentives to farmers and potential farmers.
In the period before independence and shortly after, the Nigerian economy could justifiably be described as an agricultural economy because agriculture served as the engine of growth of the overall economy. During this period Nigeria was the world’s second largest producer of cocoa, largest exporter of palm kernel and largest producer and exporter of palm oil.
Nigeria was also a leading exporter of other major commodities such as cotton, groundnut, rubber and hides and skins. The agricultural sector contributed over 60% of the
GDP in the 60s and despite the reliance of Nigerian peasant farmers on traditional tools
and indigenous farming methods, these farmers produced 70% of Nigeria’s exports and 95% of its food needs.
Nigeria has a comparative advantage in Agriculture. Apart from being a major source of employment, agriculture also provides scarce foreign exchange, raw materials for some industries as well as guaranteed self sufficiency in food production. However, the discovery of oil in commercial quantity in Nigeria in the 50s, slowed down the progress of the economy in the area of agricultural production as attention drastically shifted to oil exports as the sole earner of foreign exchange. To bring back the lost glory, the Federal Government in partnership with the Central Bank of Nigeria (CBN) and prominent banks in Nigeria, introduced a fresh Agricultural Credit Guarantee Scheme and the N200 billion Agricultural Fund for the purpose of helping commercial farmers to boost large-scale farming under the management of some selected banks monitored by the CBN.
Experts and stakeholders in the agricultural sector have all agreed that proper financing of the agricultural sector is the key to unlocking the nation’s economic growth. When properly funded, the sector will not only create raw materials for local industries but will also promote the development of entrepreneurship in allied sectors and boost foreign exchange earnings.
Skye Bank is one of the leading financial institutions that substantially support agriculture in the country. Realising the crucial role agriculture plays in the life of the nation, especially as the Federal Government pursues a policy of economic diversification, Skye Bank has been a key player in agricultural project financing. The bank’s project financing portfolio in the agricultural sector covers the entire nooks and crannies of Nigeria.
One of the key projects financed by the bank in recent times is the Imo Hill Farm. It is an integrated farm project in the South Western part of the country which covers poultry, piggery, Feed mill and meat processing.
The farm has engaged technical partners from Germany called MP Farms. The German firm is regarded as one of the leading names in Europe. Its mandate in Nigeria is to oversee the management of the whole farm, with experienced managers in poultry and piggery management already hired to manage each division. The processing unit is to be run by top class professionals from Germany with over 20 years experience in meat processing and food technology.
This project promises to be a case study in agricultural innovation and livestock development in sub- Saharan Africa.
Through its branch network strategically located across the country, the bank has played and still plays a catalyst’s role in the growth and development of its clients’ businesses and projects.