Foreigners are currently taking over Nigeria’s agricultural sector as a result of the excessively high interest rates being demanded from indigenous agriculturists by Deposit Money Banks, the Federal Government has said.

It also stated that the production and sale of crude oil could not salvage the country’s fragile economy, adding that revenue generation from oil was too low when compared to what some smaller countries were making from agro exports.

Speaking on the sidelines of a seminar organised in Abuja by the Danish Embassy in Nigeria on value development in the country’s food and agriculture sector, the Minister of State for Agriculture and Rural Development, Senator Heineken Lokpobiri, said the major challenge inhibiting the desired development of the country’s agricultural sector was poor access to finance.

Lokpobiri stated, “The major challenge bedevilling this industry is access to finance. Agricultural financing in Nigeria is too costly; for even at nine per cent you can’t find it. They will ask you for all forms of collateral, the CBN will say bring your father’s house, bring this, bring that.

“But if you have a company that is ready to support agro investors, then people will invest. If you have access to cheap funds, you will be able to invest on a long term basis. Instead of getting a loan from a commercial bank at 25 to 30 per cent, you can have it at two per cent and pay back in about 30 years. Here, you don’t have such funding. That is what we are talking about.

“And that is why if you look at it now, foreigners are taking over the agro sector here; either from India, they get it (loan) at three or four per cent, or from Europe at two or three per cent. But here, it is 30 per cent and they (banks) are not even willing to give. The only way you can compete with others is for you to have cheap funds that will reduce your production costs.”

Lokpobiri explained that the economic system being run in Nigeria over the years had made it possible for the banking sector to hold the country hostage with high interest rates, adding that this was why the government often borrowed less from the domestic market.

He said countries that invested in agriculture earned far better than Nigeria, adding that oil production would not salvage the country’s economy.

The minister added, “Nigerians shouldn’t think that we have oil and that oil is going to salvage this country. Countries that are investing in agriculture are getting much more profits than what we get from oil. Do we even get up to $30bn from oil? That is the point.

“Denmark, with a population of about five million people and less land mass than Nigeria, has a net agro export worth over €80bn. Now, ask yourself this question, how many billion dollars do we get from oil export? This clearly shows that there is more profit in agro investment than even in oil investment.