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NIRSAL decries underutilisation of 84m hectares of arable land

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The Nigeria Incentive-Based Risk-Sharing System for Agricultural Lending (NIRSAL) is worried that despite the vast land resources put at about 84 million hectares in the country, less than 50 per cent is what is currently being put to use, leaving the rest lying fallow.

[File] Managing Director/Chief Executive Officer of NIRSAL, Aliyu Abdul Hameed


NIRSAL said that if the arable land is well cultivated with huge concentration on agriculture, the sector can contribute immensely to the country’s Gross Domestic Product (GDP). According to the body, the agricultural sector saw 2.12 per cent growth in real terms, which amounted to N17.5 Trillion at the end of 2018.

The body noted that the agriculture sector has the potential to grow to a rate of 8.37 per cent in real terms and N21 Trillion in real and constant prices by 2020.

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It noted that the sector can actually help in bridging the gap in financial inclusion in the country if adequately harnessed.

NIRSAL was developed in 2010 by the Central Bank of Nigeria (CBN) to help both the agricultural value chains and the agricultural financing value chain in the country.

The body at the also noted that in spite of rapid rates of urbanisation, Nigeria still has a significant rural population size. It explained that the country has 99.6 million adult population, with 63.1 million are based in rural areas; 49.9 million are women; 56.7 million are 36 years younger, while 20.2 million have no formal education. It noted that these figures showed that more work still need to be done to bridge the ever increasing financial inclusion gap in the country.

The Chief Executive Officer and Managing Director, NIRSAL, Aliyu Abdulhameed, while speaking at The Guardian Newspaper organized forum on Advancing Financial Inclusion in Lagos, noted that over 36 million Nigerian adults remain financially excluded.

Abdulhameed said most of the excluded adults are micro, small, medium enterprise owners in rural areas most of which are in agriculture.

According to him, over 97 per cent of business owners(farming, non-farming, and services) receive their income in cash. “This is a disincentive for financial inclusion,” the NIRSAL boss noted.

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He disclosed that Nigeria is blessed with four major agricultural opportunities, which are land(84 million hectares), water (predictable rainfall), labour(over 90 million aged 15 to 65 years), and market (huge consumer market with unsatisfied demand).

To maximize these potential, Abdulhameed said the sector requires four major capitals to maximize them. These, according to him, include finance, technology, equipment and human capitals.

He told participants that agribusiness needs intellectual and technical capacity, while high- end equipment would be needed for mechanization and commercialisation.

He stressed that scientific and technological solutions are needed for increased productivity.

Abdulhameed noted that the excluded millions in agriculture can only be reached with financial services by value chain structuring. He pointed out that NIRSAL is focused on the upgrade, development and integration of end-to-end agricultural value chains through its M2M strategy.

He stressed that agribusiness structuring across value chain is critical to advancing Fina cial inclusion through agriculture.

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The NIRSAL boss advised that to achieve financial inclusion, the country need a multi-stakeholder collaborative approach. According to him, while (NIRSAL would mobilize and structure financially excluded farmers and value chain actors, Financial institutions would provide agricultural finance product, develop and extend credit finance.

“The insurance sector will provide last mile insurance and binding services, while mobile money operators and others would aid last mile financial services, savings, withdrawals and micro credit services, amon others,” he stated.

While calling for more partnership in the drive to deepen financial inclusion in the country, Abdulhameed said NIRSAL’s small holder inclusive agriculture approach targets eight million rural small holder farmers in the medium term is a silver bullet for financial inclusion.

The NIRSAL boss decried that the rate of lending to Agriculture is still low, relative to other sectors and total lending.

“Despite engaging 70 million persons, agriculture still accounted for only 4.20 per cent of total credit as at Q1, 2019,” Abdulhameed stated.


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