The Federal Government yesterday disclosed it has approved new incentives for investors in the country’s agricultural sector.
The Minister of Agriculture and Rural Development, Dr Mohammad Mahmood Abubakar, stated this in Abuja, while speaking at the 29th edition of the LAPO Annual Development Forum, with the theme, ‘Financing Agriculture and Rural Development Initiatives in Nigeria: Issues and Way Forward.’
“According to him, the new set of incentives is targeted at improving high-level private sector participation in Nigeria’s food production and processing industry.
Some of the incentives include: tax and duty-free holidays for a period of five years for agricultural production and processing in Nigeria; tax-free agricultural loans with a moratorium period of over 18 months and repayment period of not more than seven years; and zero-tariff rates on the importation of agro-chemicals.
While urging Nigerians to invest in agriculture, Abubakar explained that the sector was experiencing a re-invigoration with dedicated Federal Government policies geared towards allowing the private sector to get involved and make more contributions in growing the nation’s Gross Domestic Product, GDP.
He said: “Agriculture will continue to be an established driver of Nigeria’s GDP growth. The agricultural growth in Nigeria has steadily increased from 3.48% in 2015 to 6.48% as of 2020.
“The Federal Government, through the Ministry of Agriculture and Rural Development, harps on the imperative of improving the country’s agricultural produce and turning agriculture itself into big business.”
The Minister reiterated the Federal Government’s commitment towards creating investment opportunities for the private sector to participate in industrialising the agricultural sector; adding that its annual budgetary allocation to agriculture had been increased.
Abubakar emphasised that the government was making efforts across the length and breadth of the country to ensure sustainable food security and agribusiness as its core. He said: “The government of the Federal Republic of Nigeria has established viable institutions, which provide services that will accelerate the tempo of private investment in Nigeria’s agriculture.
“We have shown more commitment to secure investment in agriculture by increasing budgetary allocation from seven percent to 10 percent.”
He also disclosed that under the proposed National Livestock Transformation Programme, NLTP, the following areas of cooperation would have to be addressed for the private sector to consider: beef and dairy production and processing, veterinary drugs and vaccine production, sheep and goat production, animal feed production and several others.
In his keynote lecture, Prof. Ernest Aiyedun of the Faculty of Agriculture, University of Abuja, noted that over the years, the Nigerian government had formulated good agricultural financial policies meant to encourage food production. He, however, regretted that such policies have been found to be inefficient and ineffective, as the intended results were not realized.
There is, therefore, a need to ensure adequate budgetary provision and releases targeted to specific areas of need.
Bridging the demand and supply gap in food and fibre in Nigeria would be a mirage, if financing for agriculture is not taken seriously. It is, therefore, necessary that the public financing models in place that are effective should be intensified and those not wiring should be evaluated for possible retooling for effectiveness, Aiyedun added
Earlier in his welcome address, the Chief Executive Officer of LAPO, Dr. Godwin Ehigiamusoe, stated that agricultural-driven growth and food security in the country were being hindered by inadequate financing and poor use of technology amongst others, resulting in higher food prices, increasing poverty, hunger and malnutrition.
He disclosed that LAPO has over the years supported the agricultural sector of the economy through the provision of flexible financial services to rural farmers and agribusinesses through the LAPO Microfinance Bank and the LAPO Rural Development Initiative (LARDI).
LARDI disbursed N75.4bn to 183,538 clients, who are predominantly rural farmers between 2015 and July 2022. The microfinance bank already disbursed the sum of N4.1bn to small scale farmers in 2022,” he added.
On his part, the Chairman, LAPO Board of Directors, Dr. Osaren Emokpae, said that aside increasing funding, it was imperative to fund agricultural researches in the country with efforts intensified to reduce the cost of basic agricultural implements and tools in order to increase accessibility by farmers.