AGRICULTURE FINANCING IN NIGERIA PROBLEMS AND PROSPECT
- Background of the study
Agriculture is the root of every country’s economic activity, Nigeria, specifically. In the period of hardship, families fall back on agriculture. It has remained the largest employer of labour, our major source of food, national income and export earnings.
The growth of any economy is calculated or seen in the quality and quantity of goods and services it produces. There is always the ability to produce and market to earn a living. In the wider society, the quality of life enjoyed very much depends on the quality of goods and services available to the citizenry. There is the development aspect of growth that enables equitable distribution. This entails getting products from one part to the other. Production in one country could be transported to another to enhance quality of life. Developing nations have the tendency to import greater part of their goods and services from developed nations. To square up with the developed nations, they have to increase production of exportable goods. Nigerian economy has depended predominantly on crude oil since the discovering of crude oil in the early fifties. Prior to this theirs, cash crops like cocoa, palm produce, cotton, groundnut and cassava have been the mainstay of the economy. These cash crops earned so much foreign reserve of the economy. Nigerian Bauxite and Cable are the best in the world and are sought for globally. (Soludo, 2009:20). One would have expected a balance of payment that tilts to the favor of local production. This, however, is not the case with Nigeria as imports far outweigh exports. Export financing is a means of helping local producers process their products for a better market abroad. It is designed to make funds available for local producers to seek for market abroad. The essence of every productive business is to sell to a wider range of customers to reduce cost and continue in business. Oftentimes, it is propelled by the desire to increase the market share, and thus, the clientele. According to Nigerian Export Promotion Council (2009:12), export financing makes fund available for exporters to process there good for export. It notes that in Nigeria, there are many opportunities to explore for exports created by government, noting that there could be logistics that may hinder continuity. Nigerian Export –Import Bank (NEXIM, 2008:19) notes that a lot of exporters do not want to take the risk of assessing funds from NEXIM due probably to high interest rate. But it states that the risk involved in export financing is such as to secure the financier’s investment while monetizing the exporter.
This study will examine the divers roles of financing agriculture in Nigeria.
- STATEMENT OF PROBLEM.
The problem of low productivity and lack of improvement in agriculture has been traced to various causal factors.
One of such course is the lack of adequate finance to the agriculture’s. They complain that they do not have enough fund to carry on with their activities. We want to investigate the reasons why these formers find it difficult to raise enough money to carry out their important work.
I will also investigate the ways of eliminating these problems. Several measures have been taken by the government to encourage agriculture financing in the country but they houses not yielded the necessary effect for they are established.
- OBJECTIVE OF STUDY
The study seeks to examine the various roles of financing agriculture in Nigeria.
The reasons for the study are:
Managers of agriculture business will be able and also have a wide range of solution to deal with agricultural financing in rural development.
Agriculture is very important in man’s everyday life particularly in providing food for individual providing revenue for formers and the agriculture sector generate a sizable point of the national income and can also contribute its quota to the success of the student in our institutions.
- To ascertain if high interest rate of lending is the problem of agricultural financing in Nigeria.
- To know if the reduction of interest rate will increase agricultural financing in Nigeria.
- SIGNIFICANCE OF STUDY
Findings from an authentic study of this nature are expected to contribute immensely to our educational and agricultural policies and prospect in West African.
It would also assist formers and business men who are opportune to read this research work in their business activities. That is it would bring about increase in exportation of farm product hereby make life conformable in Nigeria.