How CBN, Agric ministry can collaborate to rescue naira

In recent years, the agricultural sector in Nigeria has emerged as a pivotal area for economic growth and development. Soybean has gained significant attention among various crops due to its versatility and high demand in domestic and international markets. With the global demand for soybeans reaching about $100 billion and China alone importing about 60% of this demand, the potential for Nigeria to capitalise on soybean production is immense.

Since soybeans are an arable crop, this means they can be produced 2-3 times a year via irrigation, and this can be massively exported to China to bring in the foreign exchange needed to increase the naira value and reduce the imported inflation in the country. However, the realisation of this potential will require urgent cooperation between the Central Bank of Nigeria (CBN) and the Federal Ministry of Agriculture, focusing on financing the aggregation of soybean production using improved varieties.
The country has the potential to produce millions of metric tonnes of soybeans through improved farming practices and the use of high-yielding varieties. By optimising soybean production, Nigeria could not only satisfy its domestic needs but also tap into international markets, particularly in China, which is currently the largest importer of soybeans globally
The Central Bank of Nigeria plays a crucial role in the country’s economic framework, particularly in fostering growth in strategic sectors like agriculture. One of the CBN’s initiatives, the Anchor Borrowers’ Program, aims to provide financial support to smallholder farmers by facilitating access to credit facilities. However, for this initiative to yield substantial results in soybean production, the CBN must collaborate closely with the Federal Ministry of Agriculture to ensure that funds are allocated efficiently and effectively.

Financing the aggregation of soybean farming is essential for several reasons. Firstly, it allows for economies of scale, which can lead to reduced production costs and increased profitability for farmers. Secondly, it enables the adoption of improved seed varieties and modern agricultural practices, crucial for enhancing yield and quality. Thirdly, with adequate funding and support, farmers can invest in necessary infrastructure, such as irrigation systems and storage facilities, which are vital for the post-harvest management of soybeans.

source: premiumtimes.com

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