President Muhammadu Buhari has said that less than 3% of funding from commercial banks in Africa goes towards funding agriculture.
He stated this on Wednesday, January 25 in Senegal, during his speech at the ongoing Dakar 2 Summit with the theme ‘Feed Africa: Food Sovereignty and Resilience’.
According to Buhari, funding in Africa’s agricultural sector is critical especially for smallholder and commercial farmers, to ensure success, which is beneficial for all Africans. He said:
- “Commercial banks do not lend much to agriculture due to the perception of high risks. Generally, less than 3% of total financing by commercial banks in Africa goes into agriculture. We must therefore reduce the risks of lending faced by commercial banks. But we must go beyond commercial lending.
- “Where possible and countries can afford to, the central banks can also dedicate significant resources to complement lending from commercial banks.
- “Such dedicated financing windows from the central bank must be well monitored, to ensure that they reach the intended beneficiaries, must be transparent and must not crowd out the commercial lending sectors, or the private sector.”
Growing Africa’s food basket: President Buhari also addressed food security. He called for an increase in budgetary allocations to Agriculture, so the continent can feed itself today and in the future. According to him, the share of agriculture should be increased across Africa, especially for investments in critical public goods, such as research and development, infrastructure, especially roads, irrigation, and energy. He said:
- “We must ensure that we feed ourselves today, tomorrow, and well into the future. The starting point is to raise agricultural productivity. This requires the access of farmers to quality farm inputs, especially improved seeds, fertilizers and mechanization”
What Africa’s Agricultural industry needs: According to President Buhari, there is a need to subsidize farmers and this should be done transparently without rent-seeking. He also said African leaders should meet the 10% allocation of their budgets to agriculture as agreed in the Malabo Declaration of the African Heads of State and Government.
- President Buhari called for the reduction in rural-to-urban migration through the development of rural areas
- He highlighted the need for younger male and female farmers, who have access to land, finance, technologies, information, and markets while stating the need for the Food and Agriculture Delivery Compacts arising from the Summit to address ways to improve the empowerment of the youth and women in agriculture.
For the record: President Buhari also said Africa must ensure that agricultural systems are climate-smart and climate-resilient. He emphasized the need to invest heavily in irrigation to help address the increasing frequency of droughts that are leading to the decline in crop yields.