Mr. Godwin Emefiele, Governor of CBN

Food Security: CBN guarantees N130.9bn to farmers under ACGSF –Chairman

*Stephen Okon, Bird Chairman, discloses the Board of Agricultural Credit Guarantee Scheme Fund has proved relatively successful in de-risking the agricultural sector in Nigeria from inception to date

Gbenga Kayode | ConsumerConnect

As part of the Bank’s several interventions in the agricultural sector of the country’s economy for food and nutrition security, the Central Bank of Nigeria (CBN) has guaranteed the sum of N130. 90billion loan to farmers under the Agricultural Credit Guarantee Scheme Fund (ACGSF) since inception in 1977 to May 2022.

Mr. Stephen Okon, Chairman of the Board of the ACGSF, gave the update at the 2021 National Best Farmers of the Year Award, held in Friday, July 1, in Abuja, FCT.

Okon stated: “The ACGSF Scheme has proved relatively successful in de-risking the agricultural sector in Nigeria as evidenced in the number of loans guaranteed from inception to date.

“A total of 1,232,326 loans valued N130.903 billion were guaranteed from inception to May 2022 out of which 973,646 beneficiaries had repaid a total of N98.91 billion.”

The Board Chairman also said that the Federal Government and the CBN both contributed to the Fund in the ratio of 60 percent and 40 percent respectively, with the CBN doubling as the Managing Agent and the Secretariat.

The timing of the event was apt, given the fact that countries across the globe were experiencing challenges, resulting from the Russian-Ukrainian War, stated Okon.

He further said: “Its impact being – global oil and food crises affecting the agricultural sector which has contributed to disruptions in domestic food supply chains and other shocks affecting food production.

“This has led to the loss of incomes, food security risks, inflationary trends, and creating serious tensions in many countries.”

According to him, achieving food security not only carries significant benefits for human health but also serve as the basis to achieve sustained economic growth.

Okon noted: “Awakened by a potential rise in food insecurity, many countries and organisations are mounting special efforts to keep agriculture safely running as an essential business.”

Speaking on the occasion, Mr. Michael Ogbu, Abuja Branch Controller of the CBN, said that the successes achieved under the ACGSF had led to significant improvement in Deposit Money Banks’ (DMB) lending to the agricultural sector and  remarkable growth in the agribusiness value chain in the economy.

Ogbu expressed the determination the CBN Management towards supporting farmers to grow exponentially.

He stated: “That way, Nigeria can actually grow what she eats.”

ConsumerConnect reports the ACGSF Scheme was established by Decree No. 20 of 1977 to guarantee agricultural credit facilities granted to Nigerian  farmers.

The Scheme encourages Deposit Money Banks and Microfinance Banks (MFBs) to lend to those engaged in agriculture by providing guarantee.

ACGSF as well mitigates risks associated with banks’ lending to agriculture by guaranteeing to pay banks 75 percent of the net amount in default in accordance with the provisions of the enabling Act.

Under the new ACGSF Amendment Act 2019, the maximum for a non-collateralised loan has increased from N20,000.00 to N100,000.00, while the maximum for a collateralised loan moved from N10 million to N50 million.

Meanwhile, Mr. Peter Okonkwo has emerged the overall winner of the 2021 National Best Farmer of the Year.

Okonkwo had obtained N8.05million facility under the scheme for the procurement of additional agricultural plants, machinery and packaging in 2018, report said.

With the loan, the farmer reportedly generated N15 million income and over N2.7 million as profit.

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