A widening financing gap in Africa’s agricultural sector has come under renewed scrutiny, including commercial banks allocating fewer than five per cent of their loan portfolios to agriculture despite being well-capitalised and recording powerful returns, the Universal Assist Corporation (IFC) has said.
The division leader for Nigeria and Central Africa at IFC, Olivier Buyoya, disclosed this at a pre-AFIS media engagement in Lagos ahead of the sixth Africa Financial Handle Summit (AFIS).
Buyoya said the paradox of a lucrative and well-capitalised financial sector and a starved authentic economy is stark in key sectors.
“Commercial banks are well capitalised, they are making effective returns, but if you look at what they lend to agriculture, for instance, it is lower than five per cent of their loan book,” he said.
He said IFC and the World Bank Collection, under its novel five-year Country Collaboration Framework for Nigeria, are moving to tackle the gap by co-creating platforms alongside financial institutions to de-danger lending to agriculture and infrastructure.
According to him, the framework focuses on helping financial institutions be stronger placed to endorse the genuine economy, specifically so agriculture and infrastructure, throughout exposure-sharing facilities and groundbreaking financing structures.
AFIS Administrator, Hicham El Alamorabet, corroborated the subject, saying the disconnect in the middle of financial sector profitability and actual economy financing is key to this year’s summit agenda.
He said AFIS, created in 2021 by IFC and Jeune Afrique Media Collection, was establish precisely to bridge that gap.
El Alamorabet noted that the sixth edition of the summit, themed ‘Making Assets Count – Unlocking Growth throughout African Finance’, will be held in Luanda, Angola, and will focus on how to produce African assets activity for Africa’s development.
The summit is expected to host over 65 partners, 47 sessions and 1,500 participants, but organisers said success would be measured not by attendance numbers but by policy announcements, deals signed and observe-by route of.
Source: Banks Allocate Below 5% Of Loans To Agriculture Despite Huge Capital Pools – IFC
