Mr Godwin Emefiele, the Governor of the Central Bank of Nigeria (CBN), has revealed the underlying reason behind the CBN’s huge agricultural intervention in the Nigerian economy.
The CBN Governor disclosed this while delivering the 25th and 26th combined convocation lecture of the Ekiti State University (EKSU), in Ado-Ekiti, Ekiti State, according to the News Agency of Nigeria.
The CBN has announced that it has granted N948 billion to 4,478,381 smallholder farmers in Nigeria in order to boost food production. Apart from supporting farming, the CBN Governor said that the ambitious program has created 12.5 million direct and indirect jobs for Nigerian youths.
What the CBN is saying
Emefiele stated that Nigeria was over-dependent on oil revenue even though it only contributes just 10% to the GDP while agriculture contributes three times more.
He said, “As you all know, one of the major challenges facing the Nigerian economy is over-reliance on revenues and foreign exchange earnings from the sale of crude oil, even though petrol represents just 10 per cent of our GDP.
“Moreso, the non-oil sector, particularly agricultural and manufacturing sectors, which contribute about 30 and 13 per cent to our GDP have been confronted with low investments, inadequate credit to real sector and weak infrastructure.”
The Governor noted that Nigeria has a large and growing population that would need the locally manufactured product rather than imported food items. “Furthermore, with an annual population growth rate of 2.8 per cent, it was important that all efforts were made available for Nigerians, particularly in sectors that had the potential to absorb youths,” he said.
“We were aware that if necessary support was given to households and business, productivity will rise and investment will flow into our economy,” he added.
The current economic slump and hardship in the system, according to the CBN Governor, are due to the 2015-2017 economic recession and the COVID-19 epidemic, which resulted in a drop in revenue and a reduction in foreign investment portfolio.
This is to aid households and businesses that sustained major losses as a result of the deadly COVID-19 outbreak, he explained.
Emefiele announced that 648,052 households and proprietors of Small and Medium Enterprises benefited from the federal government-driven strategy.
What you should know
- Nigeria’s Agriculture sector grew by 3.58% (year-on-year) in the 4th quarter of 2021, an increase of 2.36% points from the preceding quarter which recorded a growth rate of 1.22%.
- The sector contributed 26.84% to overall GDP in real terms in Q4 2021, lower than the contribution in the fourth quarter of 2020 and lower than the third quarter of 2021 which stood at 26.95% and 29.94% respectively.
- The NBS revealed that four sub-activities make up the Agricultural sector: Crop Production, Livestock, Forestry and Fishing, adding that the agricultural sector in the fourth quarter of 2021 grew by 3.58% (year-on-year) in real terms, an increase of 0.16% points from the corresponding period of 2020, and an increase of 2.36% points from the preceding quarter which recorded a growth rate of 1.22%.
- Rising food costs, according to the International Monetary Fund, is a major factor fueling inflation in Nigeria and other sub-Saharan African nations, and might exacerbate present economic downturns.
- The Central Bank of Nigeria has stated that transportation cost is the major cause of the surge in food inflation in Nigeria.