By JONAH NWOKPOKU
Lending by commercial banks in the country to the agricultural sector has increased from N3 billion to N20 billion in 2013, said Dr. Kingsley Moghalu, the Deputy Governor of Central Bank of Nigeria, CBN. Moghalu disclosed this while delivering a keynote address at the third CBO Capital Investors’ Conference, held in Lagos.
He said that increase in bank lending to agriculture is as a result of the various reforms in the banking sector, including better regulations and tight monetary policies of the apex bank.
According to him, “Lending to agriculture increased massively in less than a year. Bank lending to agriculture moved from N3 billion to N20 billion within the year and this has played a critical role in the economic evolution of our country.”
Speaking on the economic outlook in 2014, Moghalu explained that given the steady growth achieved in 2013, the economy is expected to grow strongly driven by high oil prices and robust economic indices.
He said that by next year, agricultural input is also expected to increase significantly leading to higher economic growth and more job opportunities, adding that the financial inclusion, access to finance by the informal sector, is also expected to advance in 2014, while the power sector reforms, which will lead to reduction in the cost of doing business, will also lead to better economic opportunities and creation of more jobs in the economy.
He said, “The critical factor is the power reforms for 2014. The stability of power will unleash the enormous economic potential of this country. Another is the licensing of oil refineries,” maintaining that, “irreversible economic growth will be defined by reforms in the power and petroleum sector.”
He, however, noted that Nigeria needs to look beyond Gross Domestic Products growth figures as it requires a better economic plan for the future and essential infrastructure to achieve real growth and meet its economic growth expectations.
“At the moment, Nigeria has about $262 billion GDP. With this, we can overtake South Africa in this decade due to rebasing of the GDP. This has resulted to everyone in the world looking at Nigeria as the future of the world, but it is not enough to have high GDP numbers, we also need infrastructure, that matters,” he said.
“We need to plan a different economic future in this country within the next five years. We can’t continue to depend on oil,” he added.
Responding to the theme of the conference which was ‘Pre-election Strategies for Nigeria, in 2014’, he noted that, “Given that 2014 is an election year, spending may increase and lead to high inflationary trends, but the CBN is ready to meet that challenge. That outlook may further lead to monetary policy tightening.”