The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, yesterday applauded the Central Bank of Nigeria (CBN) and Committee of Bankers for pegging interest rate to farmers at nine per cent.
Ogbeh said the development will assist the agricultural sector create jobs and promote food security through loans disbursement to rural women and youths at the grassroots.
Ogbeh, who spoke in Abuja, described the policy as a first major step Nigeria was taking to reverse the ‘horrible damage’ done to Africa through the Structural Adjustment Programme of the mid 1980s.
“The tenure for this loan is good, seven years tenure, two years moratorium and maximum of N10 billion per borrower but I appeal to the borrowers, if you are going to take this loan, you have to swear to God that you will repay. We don’t want the banks losing all their money,” Ogbeh said.
He applauded President Muhammadu Buhari for listening to the ministry’s appeal and other stakeholders who had pushed for the cut in interest rate for over 30 years.
However, the minister urged borrowers to ensure whatever was being borrowed are repaid as financial institutions are profit-making organisations.
Ogeh assured that the ministry would ensure loan repayment, adding that government intends to disburse the funds through cooperatives to rural farmers in the country, who are largely women and youths.
“We believe that under this condition, our youth and women, big and small scale farmers can now have access to credit to fulfill their dreams and drive Nigeria towards self-sufficiency in food production.
“We have to grow our agriculture and to grow agriculture, you need cheaper credits, 18, 25 and 35 per cent interest rates are for traders, not producers and I am glad the central bank has recognized this. I have complained about this since 1986.
“I was travelling in Hong Kong when I phoned home and I was told structural adjustment programme had started and that the dollar was being auctioned. That day, I said to my friend, this is the beginning of Nigeria’s disaster. We carried on every week devaluing our currency for nearly 32 years.
“I don’t know where the economist discovered this marvelous formula but I have never seen any country practicing that nearly insane monetary policy. The Naira used to exchange $1.5. As a result, it was better to import than produce, then interest rate went to 35 per cent.
“A friend of mine told me he borrowed at 40 per cent. We committed suicide then and this is the first major attempt to redeem that disaster. That is why I am so excited about it,” he added.
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