High interest rates on loans hinder agricultural production – Minister

The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, says the high interest rates on loans given by commercial banks to farmers have been hindering agricultural production in the country.

The minister said this in Birnin Kebbi  during the meeting of All Progressives Congress (APC) Governors’ Forum on policy synergy to ensure the national development.

The banks charge between 25 and 35 per cent interest on loans given to farmers to boost agricultural production in our country. This attitude is capable of discouraging farmers to borrow for the improvement of their farming activities. One of the biggest problems which farmers face is insufficient finance and the interest rate on loans is high.How can farmers borrow? How can industrialists borrow? And how can manufacturers borrow?” he asked.

Ogbeh said that the development had also affected the industrial and economic growth of the country, adding: ‘‘The interest rate of bank loans today stands at between 25 and 35 per cent.”

He said that the financial policy was limiting the government’s efforts to improve agricultural production in the country.

He reiterated that the interest rates charged on loans were excessive, saying that the policy had been in existence for over 30 years.

Ogbeh urged state governors to discuss with the Central Bank of Nigeria (CBN) on how to address the issues relating to high interest rates on bank loans.

He also advised the governors to acquire more agricultural equipment so as to attract youths to participate in farming.

However, the minister said that the Federal Government would establish 200 rice mills across the country, particularly in rural areas, to boost rice production.

While commending the establishment of private rice mills in some states, Ogbeh restated the determination of the Federal Government to stop importation of rice by the end of 2017.

We are appealing to state governors to continue to invest heavily in agriculture and even start exporting at least two agricultural produce from their states to other countries. Every state in Nigeria has the potential to export something at least to earn foreign exchange; so join hands with us, we will support you,’’ he said.

In his speech, the Minister of Education, Alhaji Adamu Adamu, expressed regret that 12.4 million children were out of school in the country.

He stated that the country was leading the world in terms of the number of out-of-school children.

‘‘Before now, we had 11.4 million out-of-school children, but owing to the Boko Haram insurgency in the north-eastern part of the country, the figure has increased to 12.4 million,” he said.

Adamu said that over N42 billion had been set aside for the governors to finance the development of education in their states.

We are surprised and disappointed that some of the governors have not accessed the funds. We will lower down the counterpart funding requirement to a level that is acceptable to you; we will also do our utmost best to ensure the promotion of quality education and enrolment of children in our schools,” he said.

The APC Governors Forum meeting was organised to evaluate and address the current challenges facing state governments in taking due advantage of the opportunities and resources provided via various policies of the Federal Government.


Mazino Dickson