The Chief Executive of Union Bank, Emeka Enuwa, has said that Union Bank will keep providing agricultural finance to rural farmers, adding that as a member of African Rural Agricultural Credit Association (AFRACA), the Bank remains committed to providing rural finance in Nigeria.
“At Union Bank, we shall continue to provide credit to the agricultural sector and we encourage the other banks to do the same. We remain committed to driving investment in the agricultural sector as an active member of AFRACA and we urge all participants to align with AFRACA’s vision of a rural Africa, where people have access to sustainable financial services for economic development.”
Enuwa went further to say that Agriculture remains the vital tools that can get the country out of the current depleted foreign exchange, stressing that agricultural financing and infractions development must remain an unbroken chain for economic development.
The Union Bank boss stated this in Abuja at a two day workshop on Catalysing the Diversification of the Nigerian Economy Through Effective Agricultural Finance organised by African Rural Agricultural Credit Association (AFRACA).
He recounted that Nigeria was a major exporter of Palm oil, cotton and rubber in the 80s but the oil boom drifted the nation to focus on oil which has now become a commodity with a value that cannot drive the economy, saying that most African countries like Angola that are dependent on oil are also going through the same economic challenge, while urging government to increase funding to agriculture to enable more farmers have access to credits.
Enuwa pledged the continuous support of Union Bank to rural farmers through a revolving micro credit.
He said, “Nigeria we all know is an oil producing nation as a number of other member nations, and over the last year or so, we find ourselves in a situation where oil revenue has declined approximately to 43% year to year, 2014 to 2015. And when your foreign currency earnings decline, it has a direct impact on the economy.
“There has been a shortage in foreign currency and this has affected sectors like manufacturing and others. It has led to a disparity in the exchange rate. We have also started seeing inflation through our indices.
“Every country needs to diversify its revenue base. Revenue base is production base and that is why agriculture is very important again.
“In the case of Nigeria, we have history. We used to be the highest producer of palm oil, likewise rubber, cocoa, all and we have to get back to such glory even if it is not the same produce, perhaps different ones.
“As it stands, we are the largest producer of cassava in the world and this is an opportunity to do more of that. We have to move away from being a net food importer to a net food exporter.
“One of the challenges facing agriculture sector today is lack of effective agriculture finance. In Nigeria, the banking sector has made some progress. Over the last few years from 2014 to 2015 there has been 36% growth in loan to the real sector; agriculture did not get up to 4% of the total lending in Nigeria.
“In addition to finance, farmers also face infrastructure impediment, roads, power, transport and storage. Those are things that are important to farmers and which remain a challenge.
“What has to happen to elevate agriculture to a top level generating sector is what we are seeing, that is the government is saying that agriculture is the key pillar for our economic development and it is being reflected in the budget. If you look at the capital investment required to further enable agriculture whether it is in infrastructure, transport, roads, those are the things we expect to see more investment within the course of this year and going forward. Across Africa the same thing is being done,” he said.
He called on Nigerians to use the competitive advantage it has in cassava production to ensure that the country becomes a force in cassava farming and processing.