Farmers and agricultural firms in Nigeria are grappling with a massive debt burden as they struggle to repay N380.97 billion of the Central Bank of Nigeria’s intervention loans by September 30, 2023.
This figure represents the cumulative due and unpaid principal and interest from various agricultural support programmes initiated by the CBN.
Detailed data from the CBN reveals that of the N380.97 billion owed, N362.22 billion constitutes the principal yet to be paid, while the remaining N18.75 billion is accumulated interest.
This information, sourced from the apex bank, highlights the challenges the CBN faces in recouping funds lent out to stimulate agricultural productivity and food security.
The failure to repay these loans could signal underlying issues in the agricultural finance system, which could have implications for the sustainability of such interventions in bolstering Nigeria’s economy.
The CBN’s loan interventions, totalling about N2.07 trillion, were meant to catalyse agricultural development, but the current repayment crisis underscores the need to reassess the strategies employed to ensure that these loans are repaid promptly.
According to the data from the CBN, at least eight loan programmes were targeted at farmers and agricultural firms. These include:
Notably absent in the CBN’s disbursement records is the Private Sector-Led Accelerated Agricultural Development Scheme (PAADS), suggesting that funds have yet to be allocated under this particular programme. Furthermore, although the Rice Distribution Facility (RDF) has seen N1 billion in disbursements, there are no records of outstanding balances, implying that the loans are not yet due for repayments.
Here is a breakdown of the data concerning the different agricultural loan schemes and their current financial status:
The total cumulative amount disbursed across all schemes stands at over N2.07 trillion, with repayments at N1.51 trillion. However, the challenge remains with an outstanding principal balance of N737.33 billion and total due and unpaid principal and interest reaching the staggering sum of N380.97 billion.
