Post by Trade Coach on Sept 14, 2017 9:21:45 GMT 1
AGRICULTURE:A SECTOR STILL PLAGUED BY HUGE FUNDING GAP,UNCERTAINTIES
Despite its immense contribution to the economy as a major revenue earner (at least in the post colonial years), agriculture has been neglected by successive administrations in the country. In this report, FADARE ADEKEKANMI examines the role of dearth of fund on the sector
In Sub-Saharan Africa, agriculture occupies top priority status in their national economies as the sector serves as key driver of growth, wealth creation and poverty reduction. It is also the leading economic activity in the African continent as it contributes up to 20 and 30 percent of its Gross Domestic Product (GDP).
However, the future of this sector in the continent is clouded with several uncertainties that include increasing resource scarcity, heightened risks from climate change, higher energy prices, demand for bio-fuels and doubts about the speed of technical progress.
In Nigeria for instance, several initiatives meant to boost activities in the sector had not yielded the desired result. For instance, worried by the huge gap which the sector had experienced in the past, the present government has risen to the occasion by injecting more funds into the system with close monitoring.
The effort of the government is aimed at improving the rural finance environment through the promotion of appropriate policy framework as well as help farmers to provide sustainable quality financial services to the rural farmers. It is also geared towards fostering cooperation in the planning of agricultural development in the continent by supporting regional governments I agricultural financing.
However, the future of agriculture in the sub-saharan Africa is clouded with several uncertainties that include increasing resource scarcity, heightened risks from climate change, higher energy price, demand for bio-fuels and doubts about speed of technical progress.
It is very sad to note that with very few exceptions, Sub-Saharan Africa is the only major region in the world where poverty is increasing rather than going down and where human development indicators tend to worsen.
It is also clear from findings that the formal banking system in the continent does not posses the capacity, skills and resources to single-handedly finance the expected exponential growth in the agric sector.
In addition, there is need for regulatory and legal reforms to be undertaken in order to empower corporate investors such as trusts and insurance companies, pension funds and other institutional investors to also provide sustainable source of much needed long term fund through instruments such as bonds, warrants, leases as well as equity.
Globally, agric business has changed drastically and we must blaze the trail or loose relevance. The greatest challenge therefore is to cultivate a new set of agricultural entrepreneurs to drive the technological changes in the sector and make the continent competitive and food secure. In specific terms, there is the need to provide coherent policy to guide implementation of financial and support intermediation and evolve packets of support services to suit different levels of financial services.
On this premise, let’s call on other apex banking institutions in Africa, regional bodies, private investors and other international agencies to form coalition that would truly change financing landscape and reposition Africa’s agriculture for increased food security, job creation, material supply, poverty reduction, export of African food commodities and industrialization.
Despite its immense contribution to the economy as a major revenue earner (at least in the post colonial years), agriculture has been neglected by successive administrations in the country. In this report, FADARE ADEKEKANMI examines the role of dearth of fund on the sector
In Sub-Saharan Africa, agriculture occupies top priority status in their national economies as the sector serves as key driver of growth, wealth creation and poverty reduction. It is also the leading economic activity in the African continent as it contributes up to 20 and 30 percent of its Gross Domestic Product (GDP).
However, the future of this sector in the continent is clouded with several uncertainties that include increasing resource scarcity, heightened risks from climate change, higher energy prices, demand for bio-fuels and doubts about the speed of technical progress.
In Nigeria for instance, several initiatives meant to boost activities in the sector had not yielded the desired result. For instance, worried by the huge gap which the sector had experienced in the past, the present government has risen to the occasion by injecting more funds into the system with close monitoring.
The effort of the government is aimed at improving the rural finance environment through the promotion of appropriate policy framework as well as help farmers to provide sustainable quality financial services to the rural farmers. It is also geared towards fostering cooperation in the planning of agricultural development in the continent by supporting regional governments I agricultural financing.
However, the future of agriculture in the sub-saharan Africa is clouded with several uncertainties that include increasing resource scarcity, heightened risks from climate change, higher energy price, demand for bio-fuels and doubts about speed of technical progress.
It is very sad to note that with very few exceptions, Sub-Saharan Africa is the only major region in the world where poverty is increasing rather than going down and where human development indicators tend to worsen.
It is also clear from findings that the formal banking system in the continent does not posses the capacity, skills and resources to single-handedly finance the expected exponential growth in the agric sector.
In addition, there is need for regulatory and legal reforms to be undertaken in order to empower corporate investors such as trusts and insurance companies, pension funds and other institutional investors to also provide sustainable source of much needed long term fund through instruments such as bonds, warrants, leases as well as equity.
Globally, agric business has changed drastically and we must blaze the trail or loose relevance. The greatest challenge therefore is to cultivate a new set of agricultural entrepreneurs to drive the technological changes in the sector and make the continent competitive and food secure. In specific terms, there is the need to provide coherent policy to guide implementation of financial and support intermediation and evolve packets of support services to suit different levels of financial services.
On this premise, let’s call on other apex banking institutions in Africa, regional bodies, private investors and other international agencies to form coalition that would truly change financing landscape and reposition Africa’s agriculture for increased food security, job creation, material supply, poverty reduction, export of African food commodities and industrialization.