How loan moratorium, interest rate reduction boost farmers’ hope

With the global economic meltdown due to the ravaging COVID-19 pandemic and the devastating effect of dwindling oil revenues, experts are calling on the Federal Government, through the Central Bank of Nigeria (CBN), to domesticate the nation’s economy, with more focus on agro-economy.

They foresee how the CBN’s extension of the Anchor Borrowers’ loan moratoriums and the reduction of interest from 9 per cent to 5 per cent, as well as the creation of a N50billion targeted credit facilities would breathe life into the already comatose agroallied micro, small and medium sized industries.

This is expected to boost and speed up the economic recovery process in the post COVID19 if the policy is implemented holistically.

Mr Anibe Achimugu, the national president of the Cotton Association of Nigeria, said the combination of moratorium extension and interest rate reduction was a necessary ingredient that would give all concerned the required cushion to ride the tidal wave of the COVID19 pandemic for a much longer period, adding that production must happen to further support the interventions.

“Basically, the moratorium and interest reduction give beneficiaries reasonable time to re-adjust to the sudden impact of COVID-19.

“Looking at the global impact of the COVID-19 and the sheer fact that countries are basically looking out for themselves first, Nigeria needs to do likewise. And we all appreciate that SMES are the drivers of any economy, and focusing on where we have comparative advantages, or can easily have, which is agriculture, value chain approach in the agricultural sector is the way to go,” he said.

He further suggested what the Federal Government and the CBN should do regarding the N50billion for SMEs, saying “It is paramount, and if possible, should be increased to as many agro-allied industry players as possible.’’

But Alhaji Salim Mohammed, the national president of Wheat Farmers Association of Nigeria, said there was no way farmers would pay such loan within six months, adding that the gesture was long overdue.

However, Professor Abdul Nafiu, the national president of the Soybeans Farmers Association, was concern that the delay in releasing some of these intervention funds could slow down recovery process, which some of his members are going through, having committed their resources into production under the ABP.

On her part, Mrs Rose Gyar, an agro-allied SMEs expert, said the extension of the moratorium would support operators to recover from the effect of the period of lockdown and reactivate their businesses and cash flow to stabilise before repayment. This will assist in sustaining their businesses.

“The interest rate reduction is what MSMEs have been advocating. I wish it remained permanent. However, it will go a long way in supporting MSME businesses to be competitive.

“The economic palliative of N50bn is also a window for easy access to business funds for MSME operators. However, we are all aware that operators in the space have the challenge of limited financial literacy and digital education. This means that some operators would be excluded from participation because strategy for access is only digital and online uploading of application process. Those that could qualify may not have the opportunity to participate,’’ she said.