To increase food production, CBN supplies fertilizers worth N100 billion

To increase food production around the nation, the Federal Ministry of Agriculture and Food Security received N100 billion worth of fertilizers from the Central Bank of Nigeria on Wednesday.

At the FMAFS headquarters in Abuja, CBN Governor Olayemi Cardoso gave Minister of Agriculture and Food Security Abubakar Kyari the 2.15 million bags of fertilizers.

During the handover ceremony, Cardoso emphasized that maintaining price stability was a primary duty of CBN, and that the cost of food was a significant factor in inflation.

This is because food and non-alcoholic beverages account for a sizeable amount of household spending in Nigeria, the head of CBN said.

In order to control headline inflation rates overall, Cardoso said, “this reinforces the critical need to address food inflation.”

He clarified that although the CBN had been taking a number of steps to reduce inflation in the near term, rising food prices had continued to be the main cause of inflationary pressures.

He did, however, note that although there may be some temporary inflationary pressures, the government expects a significant reduction by the third quarter of 2024.

This is the exact reason we’re here today: we want to work together more closely with the Ministry of Agriculture to reduce the recent spike in food costs.

“The CBN has shifted its approach from direct quasi-fiscal interventions to utilizing traditional monetary policy tools to carry out monetary policies, in line with our strategic focus on our core mandate.

“In this light, we aim to extend our support and foster closer ties with ministries, departments and agencies that bear the mandate and expertise to undertake these critical initiatives,” Cardoso said.

He went on to say, “As a result, we want to strengthen our collaboration with the Ministry of Agriculture, supporting your efforts to improve food security and productivity, and eventually reducing food inflation and strengthening our commitment to price stability.”

“In pursuit of these goals, we are delighted to announce the allocation of 2.15 million bags of fertiliser valued at over N100bn, which we are humbly handing over to the Ministry of Agriculture.”

Prior to Cardoso’s appointment as CBN governor in 2023, the central bank’s main method of intervening in Nigeria’s fertilizer industry is by making credit more accessible through initiatives like the Commercial Agricultural Credit Scheme and the Agricultural Credit Guarantee Scheme.

The CBN encourages banks to lend to farmers at discounted rates through these programs. This facilitates the procurement of inputs such as fertilizers by farmers.

Because its actions can effectively result in cheaper fertilizer prices for farmers, the apex bank also benefits farmers indirectly by lowering the cost of lending.

For his part, Kyari praised the apex bank for supplying the commodity and referred to the cost of fertilizer as the primary input in any agricultural production.

Details to follow…