Though in some countries the spread of the COVID-19 pandemic has been slowing down and cases are decreasing, in others, the virus is resurging or continuing to spread quickly. This is still a global problem calling for a global response.
Here in Nigeria, the Central Bank of Nigeria as a mean of mitigating the impact of the novel coronavirus on micro, small and medium-sized businesses MSMEs, recently unveiled a 50 billion credit facility and cut down the interest rate on intervention funds from nine to five per cent among other measures to support businesses.
Stakeholders in the agricultural sector lauded the step by the apex bank to help agribusinesses survive in this difficult moment of the economic fallout of the COVID-19 pandemic as well as prepare the sector for the post-COVID era.
Kareem Sanni, a cocoa value chain stakeholder, said he strongly believes these interventions of lower interest rate, extended moratorium and the targeted credit facility would help to boost the recovery process post-COVID-19 in the sectors covered by the fund, including the agro-agro-allied sectors.
“For agriculture and agribusiness, an extension of moratorium and reduction of interest rate will benefit small and medium scale agribusiness as well as agro-allied industries.
“However, the government can do better by honestly earmarking a large percentage of N50 billion strictly for agribusiness, making it accessible and as well making the potential beneficiaries aware of the availability of this facility by way of advertisement.”
President of All Farmers Association of Nigeria (AFAN), Mr Ibrahim Kabir, said that the agricultural sector remains the most critical for the country’s economic growth especially amid the coronavirus, low oil price, and FX volatility.
“The CBN’s support is very crucial at this time and we must commend them for the recent reduction of interest rate on intervention funds from nine to five per cent but this support has to be ongoing,” Kabiru said.
He noted that thousands of smallholders under the CBN’s intervention programmes will benefit from the recent cut and this will further impact their production capacity greatly.
He had earlier said the government should offer stimulus to the Nigerian farmers for food crops in the interim. The stimulus, he too suggested, should be in the form of seeds, fertiliser, agro-chemicals, water pumps and other irrigation equipment as well as some cash for farm labour.
“It is prudent to channel this through farmer associations to ensure that the practising farmers benefit. It should be stated by state, supervised by the authentic AFAN, which has leaders in all the 774 LGAs in the country.
“The reduction of interest rate from 9 % to 5% and the extension of the moratorium for loan repayment as well as the 50 billion NIRSAL Microfinance stimulus window for MSMEs will mitigate the adverse effects of the pandemic and stimulate recovery, no doubt.
“In addition, I propose that the tenor of all loans on agricultural production and CBN Anchor Borrower programmes should be restructured to cover at least three farming seasons for sustainability to take care of the devastation caused by the COVID-19 pandemic on the national economy,” he suggested.
The CBN through the Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL) Microfinance bank has already commenced the disbursement of the N50billion targeted credit facility to businesses selected as beneficiaries.
No fewer than 3,256 individuals and small businesses had so far benefited from the TCF to cushion the effects of COVID-19.
The Managing Director of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), Abubakar Kure, at the presentation to the first batch of beneficiaries, said that subsequent disbursements would be done weekly.
He added that the idea was to provide cash flow or liquidity to mitigate effects of COVID-19 pandemic and help the economy to normalise.