The Central Bank of Nigeria (CBN) has renewed its commitment to transforming agricultural financing and repositioning the sector as a cornerstone of Nigeria’s economic revival.
While the CBN would not go into intervention financing, the CBN governor, Yemi Cardoso, said the new route signalled “a new dawn for agricultural lending” and a decisive break from business-as-usual approaches that have left millions of farmers underserved despite their central role in food production and rural livelihoods.
At the inauguration of the newly constituted Board of the Agricultural Credit Guarantee Scheme Fund (ACGSF) in Abuja, yesterday, Cardoso said: “Agriculture contributes more than a fifth of our GDP and employs nearly two-thirds of Nigeria’s workforce, yet it receives less than five per cent of total bank lending. This longstanding financing gap is no longer acceptable. The ACGSF must evolve to catalyse affordable credit and unlock the potential of our farmers.”
Cardoso noted that the ACGSF, which was established in 1977 to de-risk agricultural lending by guaranteeing up to 75 per cent of the value of loans to the sector, had supported countless farmers over the years. But it must now adapt to a more complex agricultural landscape shaped by extended value chains, climate vulnerabilities and emerging technologies, he said.
He said the Fund’s strengthened capacity, following the 2019 amendment that increased its share capital from N3 billion to N50 billion and broadened its mandate and provides a foundation for modernisation.
The revised governance structure, which now includes farmer representation, would ensure a more inclusive, responsive scheme.
The governor added, “The ACGSF must not simply process guarantees; it must drive an expansion of lending to agriculture on affordable terms. Every hardworking farmer with a viable project should find in the scheme a partner that enables growth, not a barrier.”
Describing smallholder farmers as the backbone of Nigeria’s agricultural system, Cardoso said they continue to face high barriers to accessing credit due to a lack of collateral, limited records, and perceptions of high risk.
The CBN chief said expanding financial inclusion, particularly for women and youth, who remain disproportionately excluded from agricultural credit and digital financial services, must be the priority for the new board.
“The scheme should collaborate with microfinance institutions, cooperatives and fintech firms to design products that reach underserved farmers,” he said, adding that group lending, mobile money channels and agent banking could transform access for farmers in remote areas.
Cardoso also urged the board to strengthen monitoring and evaluation, saying modern tools such as satellite imagery, digital dashboards and real-time analytics should be used to track loan utilisation and productivity outcomes.
“Every naira guaranteed must deliver real value on the farm and in the marketplace. Robust oversight will ensure transparency, identify emerging risks and support better decision-making,” he said.
He emphasised that evidence from monitoring would be crucial for policy advocacy and for fine-tuning the Scheme to achieve national goals of food security and economic diversification.
The CBN governor said the agricultural sector stands at a moment of unprecedented opportunity under the Federal Government’s ‘Renewed Hope Agenda’, which aims to build a resilient, modern and inclusive agricultural economy.
