By Wale Bakare
At the inception of the 8th National Assembly in 2015, one of the principal focus of the Nigerian Senate was to divest Nigeria’s economy from oil dependency to a non-oil export as a major revenue alternative in the face of the dwindling global crude prices.
This decision was taken months before Nigeria’s economy was officially declared to be in recession on August 16, 2016.
While experts opined that various economic indicators clearly suggested a change in the direction of government policies with Agriculture identified as one of the neglected sector to lead the boom charge and shore up our foreign exchange earnings; the past administration blatantly ignored the indices put forward by experts thus plunging the economy into further collapse and cheered on by those who profited from the sabotage.
In its bid to correct the wrong of the past, the Senate under the leadership of Senator Bukola Saraki resolved to pass into law a number of economic priority bills that will have both immediate and long term effect to pull Nigeria out its current recession and stagflation. The passage of the Agricultural Credit Guarantee Scheme Bill by the Nigerian Senate which is currently awaiting Presidential assent has been regarded by investors as a major legislative instrument required to make landmark reform in the Agricultural policy.
This important piece of legislation seeks to establish a special Agric fund into which shall be subscribed a certain sum to provide guarantees for loans granted for agricultural purposes by any Bank; encourage development of agribusinesses such as processing, storage and marketing; attract more banks to participate under the scheme by granting credit to finance other forms of agribusinesses and spread the risk of lending in the sector.
Furthermore, the 8th Senate has shown commitment towards boosting Agricultural financing; accessibility to credit facilities at competitive interest rate and ease of doing business by passing the Credit Bureau Services Bill for third reading on the 6th May, 2017. This bill has provisions to reduce the risk of lending or engaging in business with individuals or companies with a financial history of not paying back. It’s a fundamental behaviour-changing bill through which the credit-reporting scheme reduces the risk and potentials for all non-performing loans and encourages a change in corporate behavior that will assist small and medium scale enterprise grow to their full potential.
The Secured Transactions in Movable Assets Bill creates new ‘specie’ of capital that can now be used in our financial system. This bill also permits the use of invoices and receipts for loans and creating working capital. The key instrument of the bill grants more accessibility to loans that will encourage informal sector to come to the formal sector and this can positively drive the agricultural food chain for greater efficiency.
Consequently, these bills and a host of other amendment Acts waiting in-line in the Senate will significantly improve food sufficiency, increase credit facilities to farmers with low interest rates, and an attraction to the youths towards agricultural innovation and creating more job opportunities.
These economy priority bills outlined with a well thought-out legislation would greatly assist the Executive in its economic reform agenda, adopt a realistic policy actions and appropriate fiscal and monetary instruments in line with best international practice in order to attract innovations and use of technology to drive sustainable Agriculture.
Wale Bakare wrote from Abuja