The Central Bank of Nigeria has said that public resources alone cannot meet the country’s agricultural financing needs, calling for greater private-sector investment to address funding shortages, improve productivity and strengthen food security.
The CBN Governor, Olayemi Cardoso, disclosed this on Tuesday in his keynote address at the National Stakeholder Roundtable on Strengthening Agricultural Credit Guarantees, held at Fraser Suites, Abuja.
Cardoso, who was represented by the Deputy Governor, Financial System Stability, Lamido Yuguda, said Nigeria needed sustainable financing arrangements that would attract commercial investment while reducing agricultural lending risks.
“The scale of Nigeria’s agricultural financing needs cannot be met by public resources alone. Guarantee mechanisms must therefore be designed to achieve additionality, using public resources strategically to unlock substantially greater volumes of commercial and development finance,” he said.
He explained that the apex bank was repositioning its development finance activities towards market-based lending, increased private-sector participation and sustainable risk-sharing arrangements.
According to him, agricultural financing must be driven by viable economic activities and sound lending decisions, while government institutions should focus on addressing market failures and structural constraints.
“Our objective should be to crowd private capital in, not crowd it out,” Cardoso said.
The governor identified climate-related risks, commodity price volatility, inadequate collateral, information gaps and seasonal production cycles as major obstacles preventing financial institutions from extending sufficient credit to farmers.
He said agricultural credit guarantees must move beyond protecting lenders against defaults to attracting additional investment across agricultural value chains.
“The future of agricultural credit guarantees must therefore go beyond protecting lenders against default. Guarantee arrangements should increasingly serve as catalytic instruments that improve risk allocation, strengthen lender confidence and unlock additional private capital for productive investment across agricultural value chains,” he said.
Cardoso outlined four priorities for strengthening agricultural financing, including improved institutional coordination, climate-risk management, digital transformation and private capital mobilisation.
He called for stronger collaboration among commercial banks, microfinance banks, insurers, development finance institutions and government agencies to reduce fragmentation and improve credit delivery.
He also advocated integrating agricultural insurance, climate-risk mitigation and data-driven credit assessments into existing guarantee arrangements.
On technology, the governor said modernising the Agricultural Credit Guarantee Scheme Fund would improve processing speed, monitoring, transparency and credit-risk assessment.
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He maintained that the CBN would continue providing the monetary, regulatory and institutional environment necessary to support sustainable agricultural investment.
Earlier, the Chairman of the ACGSF Board, Dr Olusegun Oshin, expressed concern over high borrowing costs, warning that agricultural financing conditions often failed to reflect farmers’ production cycles.
“That high interest rate is an issue, and it’s something that we are looking at considerably,” he said.
Oshin explained that farmers needed affordable credit arrangements that would allow them to recover production costs and earn reasonable profits.
He disclosed plans to reposition the ACGSF from a traditional credit guarantee institution into a more responsive organisation capable of facilitating sustainable agricultural financing.
“Our ultimate ambition is not simply to issue more guarantees, but to facilitate additional agricultural lending at affordable prices, strengthen lender confidence, improve farmers’ access to finance,” he said.
He added that the scheme was exploring co-financing, refinancing, agricultural insurance and stronger institutional partnerships to improve credit availability.
In his welcome address, the Acting Director of the CBN’s Development Finance Advisory Department, Dr Paul Oluikpe, said financing constraints continued to limit agricultural productivity and investment.
“For many farmers and agribusinesses, access to credit remains difficult, while financing costs, repayment structures and collateral requirements often fail to reflect the realities of agricultural production,” he said.
Oluikpe said the ACGSF, established in 1977, required continuous reforms to remain effective amid changing market conditions and technological developments.
He announced the unveiling of the scheme’s new brand identity and online portal, alongside the presentation of revised operational guidelines as an exposure draft for stakeholder feedback.
According to him, the two-day roundtable would also explore agricultural insurance, climate-risk management, private capital mobilisation and strategic partnerships.
He said the success of the engagement would depend on practical recommendations, institutional collaboration and measurable improvements in agricultural credit delivery.
