A recent report by the National Bureau of Statistics (NBS) highlights that merely 7% of farming communities in Nigeria accessed micro-credits from banks in 2022. The study was titled “National Agricultural Sample Census” and was conducted in collaboration with the Federal Ministry of Budget and Planning, FAO, World Bank, and others.
Notably, communities in Lagos and Ogun states reported the highest percentages of farmers receiving agricultural credits from banks, at 26% and 14%, respectively.
However, the report reveals that only 11% of agricultural communities had access to bank loans, with many areas across the country reporting significantly lower figures. Cooperative organizations emerged as a more popular source of credit, cited by about 24% of communities surveyed. These cooperatives are favoured due to their less stringent collateral requirements than banks.
The report underscores the challenges farming communities face in obtaining credit to enhance their productivity and contribute more effectively to food production in Nigeria. In 2023, despite agriculture’s substantial contribution of over 20% to GDP, banks allocated only 5.07% (N2.26 trillion) of their total loans to the agricultural sector out of N44.54 trillion extended to the private sector.
Furthermore, commercial bank loans to agriculture ranked lowest among the top ten sectors of the Nigerian economy, as reported by the Central Bank of Nigeria (CBN) at the year’s end.
Key Insights from the Report
The study also revealed that agriculture engages about 70% of Nigerian households, totalling approximately 40.2 million households. Crop production constitutes the primary activity for 91% of these households, while livestock farming involves about 48%.
On average, Nigerian farming households cultivate 3.3 plots of land. Ebonyi State stands out with an average of 5.9 plots per household, whereas Lagos State records the lowest at 1.9 plots.
This vast engagement in agriculture contrasts sharply with more developed economies like the United States and Europe, where agricultural involvement is significantly lower, indicating Nigeria’s heavy reliance on subsistence farming and relatively low productivity.
The findings underscore the need for improved access to financial resources and supportive policies to enhance agricultural output, promote food security, and stimulate economic growth across Nigeria.
