Oluchi Chibuzor writes on the contribution of Sterling Bank Plc to Nigeria's agricultural revolution
The discovery of oil in large commercial quantity by the Shell British Petroleum in 1956 in Oloibiri, which is in present-day Bayelsa State, altered the focus of the Nigerian economy from an agrarian one to an economy that depended mainly on the sale of crude oil in the international market for its foreign exchange.
Consequently, the agricultural sector which used to employ about 70 percent of the labour force and which accounted for much of the country's foreign exchange earnings was neglected and has had to contend with low output, making it difficult for the country to feed its growing population. So, the country has had to rely on the importation of food items to make up the shortfall.
Over the years, in a bid to diversify the nation's mono-product economy in the face of fluctuations in the global oil market, successive administrations have enunciated different policies to revitalize the agriculture sector.
Some of the policies include National Accelerated Food Production Project (NAFPP) from 1972 to 1973, Operation Feed the Nation (OFN) from 1976 to 1980, Green Revolution Programme (GRP) from 1981 to 1983 and Go Back to Land Programme from 1983 to 1985, among others.
It is against this background that the policy thrust of the present administration focuses on reviving the agricultural sector through the integration of its value chains. This, it believes, will make agriculture one of the major drivers of economic growth as well as provide employment for a significant percentage of the population.
It is noteworthy that Sterling Bank Plc, Nigeria's leading commercial bank, is investing heavily in the agricultural sector as part of an effort to play a leading role in the facilitation of economic growth and development in the country.
The bank has identified five sectors to invest in under its HEART's of Sterling initiative and agriculture is one of them. The other sectors are Health, Education, Renewable Energy and Transportation.
Consequently, to underline its commitment to the sustainable growth and development of the agricultural sector, Sterling Bank, in conjunction with CBN/NIRSAL, has supported more than 20,000 local farmers (primary producers) with close to N5 billion to produce rice, maize, soya beans, poultry etc. and other value chain players (aggregators and processors) with over N50 billion in recent times.
The Chief Executive Officer, Sterling Bank, Abubakar Suleiman, said the bank supports the entire value chain in the agriculture sector, starting from farmers who are into production to input dealers, processors and transporters.
He said what guides the bank's investment in the sector is the understanding that achieving Nigeria's industrialisation and poverty reduction can only come from the sector that currently provides the highest means of livelihood.
By investing in the agriculture value chain, the bank believes that the possibility of quality and affordable food reaching the table of every Nigerian will be enhanced. It is only then that industrialists in the agriculture value chain can become wealthier and farmers in the sector can also have a healthy and fulfilling life.
Interventions in Agric Sector
Some of the significant investments which the bank has made in the agricultural sector include the financing and establishment of 250 tonnes per day soya bean processing plant in Ibadan, Oyo State, by Karma Milk in 2010 and the financing of the working capital requirement for the operation of 16 tonnes per hour Labana Rice Mill in Kebbi State in 2013.
It also financed the establishment of a Recirculatory Aquaculture System (RAS) in Epe, Lagos State, to produce 10,000 tonnes of catfish and tilapia yearly by Shaldag Fish Farm in 2016 as well as providing finance for one of the largest cassava processing plant by Cresto Agro in 2016 and purchase of 400,000-layer birds and battery cages by Fortune Heights in 2013.
In addition, Sterling Bank is also among the first commercial banks in the country to participate in the Central Bank of Nigeria's (CBN's) Anchor Borrowers Programme for Small Holder Farmers in Kebbi, Sokoto, Zamfara, Kaduna and Oyo states.
The CEO of Sterling Bank said the programme has been very successful and the bank has seen it as a more convenient way of intervening to assist farmers to improve productivity and guaranteed off-take by buyers.
Suleiman said besides the Anchor Borrowers Scheme, Sterling Bank also provides equity for agro-related projects under the CBN's N220 billion SME fund, remarking that the projects can either be in farming, processing or farm support segments.
Sterling Bank has also launched a radio service known as Nigeria's Farmers Radio, which provides small-scale farmers with information that will boost productivity and enhance the availability of their produce across the country.
The Radio Service
The bank said the introduction of the radio service became imperative because while many rural farmers have limited access to communication technologies, radio reaches at least 70 percent of rural households, adding that because small-scale farmers are often located in widespread, hard-to-reach rural areas, it believes that radio is a key tool to reach them most cost-effectively.
Covering 13 Northern states, the Sterling Bank's Nigeria's Farmers Radio is an instrument of mass sensitization and socialization combating poverty and food insecurity in the country through the promotion of agriculture and rural development.
The product of partnership with Federal Radio Corporation of Nigeria stations in Kaduna, Kano and Katsina, it has extended the reach of agricultural information, enhance farmers' participation and give farming families a voice.
The bank hopes that through its educational efforts, farmers will gain better knowledge of cost-effective farming techniques and be willing to invest in high yielding seeds and accurate application of fertilizers.
Apart from this, Sterling Bank has also partnered with the Nigerian Export Promotion Council (NEPC) to train exporters for the export market. Under the partnership, known as Zero to Export, the bank and NEPC would conduct a one-month training programme for people who have never participated in export business. Participants who can come up with the best plans at the end of the training would be financed by the bank to become exporters. Sterling Bank has trained 210 people so far through the partnership.
Also, as part of its commitment to the strengthening of the agriculture sector in Nigeria and the African continent, Sterling Bank recently hosted the Agriculture Summit Africa in Abuja. The international summit held under the theme "Agriculture-Your Piece of The Trillion-Dollar Economy," seeks to actualize the $1trillion African agribusiness economy dream by 2030. This is coming against the background that more than 50 percent of the world's fertile and unused land estimated at 450 million hectares is in Africa.
Similarly, in 2018, the bank brought together smallholder farmers, input suppliers, agro-processing entrepreneurs, development finance agencies, policy makers and captains of industry through a technical workshop on the agriculture value chain in Abuja. The workshop focused on co-creating a sustainable Nigerian economy through rural agricultural enterprise.
Agriculture Summit Africa highlighted the significance of the agricultural sector to the national economies of all the countries on the African continent, noting that if well harnessed, the sector can serve as a key driver of inclusive economic growth, attainment of sustainable wealth, massive job creation and poverty reduction.
At Agriculture Summit Africa, Suleiman noted that despite the critical role of agriculture to the economy of African countries and its enormous potential, it has failed to attract significant funding from the public sector or from private sources, remarking that currently, only two to three percent funding is available for the productive sectors. He says this weak synergy between the financial institutions and agriculture sector was one of the major drawbacks to the transformation of agriculture in the continent and was one of the key issues that the summit sought to address.
He added that the ongoing conversation on agriculture is not very much about agriculture but about food security, water, trade, foreign reserve, employment, food itself and more than 200 million Africans that are starving.
"Every civilization has had this discussion about food security which Africa has yet to do a great job of. The issue is majorly about productivity and during last year's summit, we were able to help farmers to gain insights on how to achieve greater productivity while the thrust this year is to empower farmers to compete globally, which is key to national development," Suleiman enthused.
Governor Atiku Bagudu of Kebbi State said his interactions with Sterling Bank over the last three years have shown how much value there is to unlock in the sector as it can contribute about 38 to 50 percent to the state's economic growth, a development which the State Commodity Market Report put at $1.6 trillion.
According to the Governor, the Anchor Borrowers Programme (ABP) was a clear example as it alone has disbursed more than N180 billion to about 938,000 Small Hold Farmers (SHFs) covering more than one million hectares of land. The governor envisages more support to the SHFs by guiding them through disruption and assisting them with accounting and financial engineering if they are to compete globally.
He considered this to be necessary because agricultural trade, according to him, is the most distorted globally as successful countries put up barriers to make it hard for other less successful countries to profit and grow in trade.
Senator Atiku said there is a need for the country to allocate more resources to agriculture, pointing out that the 2019/2020 agriculture budget alone for Brazil is $57.7 billion. Allocating more resources to the agriculture sector, he notes, will increase the sector's contribution to the national economy and possibly raise the growth rate of the economy to double digits.
One of the major highlights of the 2019 edition of the Agriculture Summit Africa was the formal unveiling of SABEX, the world's first end-to-end blockchain commodities trading and financing platform, to policy makers, players in the agriculture value chain, investors, international financiers and development agencies.
The digital commodities trading platform which is powered by Sterling Bank, Binkabi and AFEX Commodities Exchange, will provide real-time credit finance for farmers, secure storage and a ready market for both farmers and buyers to transact thereby reducing post-harvest wastage of farm produce across the country.
The Group Head, Agric Finance and Solid Minerals of Sterling Bank, Bukola Awosanya, said the bank's partnership with AFEX and Binkabi has created a viable and efficient agricultural blockchain commodities marketplace which will tackle challenges that include post-harvest loss, inadequate finance and poor market linkage, among other challenges facing farmers and it will further de-risk the agriculture sector making farmers more qualified for commercial lending.
According to Awosanya, SABEX is an enabler that guarantees the average farmer improved access to finance for agricultural activities, movement of harvested crops to a storage facility without much loss and the ability to sell and earn immediate value, remarking that the platform will decentralize commodities trading and reduce inter-mediation in trade, while distributing profit more widely across the value chain.
Quan Le, CEO of Binkabi, notes that the vision was to ensure that the commodities trading network becomes fairer and more profitable through collaborative efforts which leverage blockchain technology.
"We understand that if financial markets can fail ordinary people in the developed world, then the agricultural markets are failing ordinary farmers in the developing world.
"The only difference is that these farmers don't have a voice - it is a silent crisis. This has motivated us to work with like minds to develop a marketplace of end-buyers and end-sellers of commodities to help reduce intermediation in trade, distributing profit more widely in the value chain," Le said.
He added that, "Binkabi offers an end-to-end solution for the entire trading process from sourcing to settlement and creating new opportunities. We are transforming agro-commodity supply chain in emerging markets for the benefit of farmers, SMEs and other actors. Binkabi streamlines commodity trading process and allows banks to lend against warehouse receipts and contracts."
Head of Business Development, AFEX, Mr. Akinyinka Akintunde, said SABEX is needed to change the lives of farmers by creating smart agriculture, adding that it will expose Nigerian farmers to the international market and also deepen their access to finance.
He noted that access to finance and the export market are essential to move agriculture in the country from where it is to where it needs to be. "It is a long journey, but we have to start, and we are getting there. We look forward to more engagement and partnerships with Sterling Bank and Binkabi. And we hope to bring more farmers on board and get investors to bring the required investment into the agriculture space in Nigeria," Akintunde said.
Owing to its significant contributions to the transformation of the agricultural sector, Sterling Bank has won several awards. They include the Best Bank in Support of Agriculture Award at the Business Day Banking Awards held recently in Lagos in recognition of its support to the entire value chain in the agricultural sector of the economy.
The CBN has also conferred Sterling Bank Plc with the Best Performing Bank Award under the Commercial Agriculture Credit Scheme (CACS).