The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, on Wednesday described the new monetary policy of a single -digit lending rate of 9% to agriculture and manufacturing sectors as desirable for the growth of the nation’s economy sustainably.
The minister expressed optimism that the new interest rate regime would create jobs for teeming youths, generate wealth and by so doing stimulate economic growth.
Ogbeh gave his views on the monetary policy measure while addressing journalists in his office today on the theme ‘The New Interest Rate Regime and Agricultural Development in Nigeria.’
A statement issued by Mrs Julie Osagie-Jacobs, for the Director of Information in the ministry, quoted the minister as describing the new monetary policy as a serious attempt to correct the terrible damage that the structural adjustment programme has done to Nigerian economy based on its high lending rates between 18 percent and 35 percent over the years.
Ogbeh lamented that high interest rate regime made it impossible for our farmers to repay their loans and be globally competitive
Noting that banking credit to the agricultural sector has increased from N460 billion in 2015 to N523 billion by the second quarter of this year, the minister said the increase which is 3.41 percent of total banking sector credit, remained very low when compared to the 22.4 percent lending to oil and gas, and 13.5 percent to the manufacturing sector.
He projected that lending to the agricultural sector would increase considerably with the new lending interest rate regime.
This is even as he expressed the hope that key backward integration projects such as the Sundi Sugar Mill that saves Nigeria $100 million annually and the proposed Horticulture Programme will take advantage of the new initiative by helping in stimulating the economy.
He commended President Muhammadu Buhari, the Central Bank and the committee of Bankers for the new policy initiative while noting that farmers, traders and manufacturers will also see the initiative as a welcomed development.
Ogbeh, however, charged farmers to strive to redeem their loans while assuring that the Federal Ministry of Agriculture and Rural Development will play a major role in ensuring that farmers do not default in their loan repayment obligations.
According to him, “under this new initiative, our youths and women, big and smallholders can now access credits to fulfil their dreams. We need to grow the economy and feed this country”.
Reacting to journalists’ question on the recent fall in the contribution of agriculture to the Gross Domestic Products (GDP) by 1.19 percent in the second quarter of 2018, compared to 3.0 percent growth in the first quarter, the minister assured that there was no cause for alarm; as the fall is attributable to fluctuations often experienced after the harvest season.
He predicted that a change would soon be noticed when harvest of the new planting season starts and that higher figures would be recorded in the third quarter of the year.