Central Bank Governor, Mr Godwin Emefiele has urged banks and investors not to panic following President Muhammadu Buhari’s directive that all Ministries, Departments and Agencies should run a Treasury Single Account at the Central Bank.
In an interview with Reuters, Emefiele explained that he will inject liquidity into the interbank market if needed but right now “there is no shortage of liquidity.”
Emefiele added that N1 trillion ($5 billion) would be moved into the single account but did not give further details.
He also said that the Naira would not be further devalued because it is appropriately priced.
Furthermore, Emefiele expressed concern over Nigeria’s position as net importer of agricultural produce worth over N630 billion.
In a keynote address presented at a training workshop on innovative agricultural insurance products held in Lagos Thursday, Emefiele who was represented by the acting Managing Director, Nigeria Incentive-based Risk Sharing System for Agricultural Lending (NIRSAL), Mr. Edwin Nzelu observed that Nigeria imports more agricultural produce than it exports.
He said “But now, we import most of the agricultural commodities that we can produce because of the neglect of the sector in addition to rural migration to cities in search of white collar jobs. The agricultural sector provides up to 70 per cent of employment in Nigeria and accounts for about 42 per cent of the country’s GDP.
“In Nigeria today, rural farmers contribute to about 70 per cent of the food produced which they do mainly by subsistence farming. These farmers with their small land holdings of 1 to 3 hectares are producing sub-optimally due to lack of adequate inputs, insufficient exposure to good agronomic practices and limited access to finance and credit.
“It is due to this subsistent level of farming that farmers do not see the importance of insuring their farming activities. Currently, Nigeria’s formal financial system is lending about four per cent of all formal credit to the agricultural sector compared to three years ago when only about one per cent of all credit went to agriculture. Lending is still low because of the lingering perception by banks that agriculture is highly risky.”