President Muhammadu Buhari has said that less than 3% of commercial bank funds in Africa go to finance agriculture.
He stated this on Wednesday, January 25 in Senegal, during his speech at the ongoing Dakar 2 Summit on the topic ‘Feed Africa: Food Sovereignty and Resilience’.
According to Buhari, financing in Africa’s agricultural sector is critical, especially for smallholder farmers and commercial farmers, to ensure success, which is beneficial to all Africans. He said:
- “Commercial banks do not lend much to agriculture due to the perception of high risks. Overall, less than 3% of total commercial bank financing in Africa goes to agriculture. Therefore, we must reduce the lending risks faced by commercial banks. But we must go beyond commercial loans.
- “Where possible and countries can afford it, central banks can also dedicate significant resources to supplement commercial bank lending.
- “Such dedicated central bank funding windows must be well monitored, to ensure they reach the intended beneficiaries, must be transparent, and must not crowd out commercial lending sectors or the private sector.”
Growth of the African food basket: President Buhari also addressed food security. He called for increasing budget allocations to Agriculture, so that the continent can feed itself today and in the future. According to him, the share of agriculture must increase throughout Africa, especially for investments in critical public goods, such as research and development, infrastructure, especially roads, irrigation and energy. He said:
- “We must make sure that we feed ourselves today, tomorrow and in the future. The starting point is to increase agricultural productivity. This requires farmers’ access to quality agricultural inputs, especially improved seeds, fertilizers and mechanization.
What Africa’s agricultural industry needs: According to President Buhari, there is a need to subsidize farmers and this should be done transparently and without rent seeking. He also said that African leaders must comply with the allocation of 10% of their budgets to agriculture as agreed in the Malabo Declaration of the African Heads of State and Government.
- President Buhari called for reducing rural to urban migration through rural development
- He highlighted the need for younger farmers, who have access to land, finances, technologies, information and markets, while affirming the need for the Pacts for the Delivery of Food and Agriculture that arose from the Summit address ways to enhance youth empowerment. and women in agriculture.
For the record: President Buhari also said that Africa must ensure that agricultural systems are climate-smart and climate resilient. He stressed the need to invest heavily in irrigation to help address the increasing frequency of droughts that are causing declining crop yields.
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