The Central Bank of Nigeria, on Wednesday, handed over N100bn worth of fertilisers to the Federal Ministry of Agriculture and Food Security to boost food production across the country.
CBN Governor, Olayemi Cardoso, handed over the 2.15 million bags of fertilisers to the Minister of Agriculture and Food Security, Abubakar Kyari, at the headquarters of the FMAFS in Abuja.
In his address at the handing over ceremony, Cardoso said one of the primary mandates of CBN was to maintain price stability, stressing that the cost of food was a crucial component of inflation.
This, according to the CBN boss, is because a substantial portion of household expenditure in Nigeria is allocated towards food and non-alcoholic beverages.
“This reinforces the critical need to address food inflation as a pivotal aspect of managing overall headline inflation rates,” Cardoso stated.
He explained that while the CBN had been implementing several measures to curb inflation in the short term, the inflationary pressures had remained predominantly driven by escalating food prices.
He, however, pointed out that while transient inflationary pressures might persist, the government anticipates substantial alleviation by the third quarter of 2024.
“This is precisely why we convene today to strengthen our collaboration with the Ministry of Agriculture with a shared objective of mitigating the surge in food prices.
“In alignment with our strategic shift towards focusing on our fundamental mandate, the CBN has veered away from direct quasi-fiscal interventions, and transitioned towards leveraging conventional monetary policy tools for executing monetary policies.
“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 stated.
He further noted that “consequently, we aim to enhance our partnership with the Ministry of Agriculture, thereby bolstering your endeavours to enhance food productivity and security, and ultimately, curbing food inflation and fortifying our pursuit of 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.”
Before Cardoso took over as CBN governor in 2023, the apex bank intervenes in the fertiliser market in Nigeria primarily by facilitating access to credit through programmes like the Agricultural Credit Guarantee Scheme and the Commercial Agricultural Credit Scheme.
Through these programmes, the CBN encourages banks to lend to farmers at concessionary rates. This helps farmers to purchase fertilisers and other inputs.
The apex bank also supports farmers through indirect subsidy by making credit more affordable, as its interventions can lead to effectively lower fertiliser prices for farmers.
On his part, Kyari described the cost of fertiliser as the major input in any agricultural production, and lauded the apex bank for providing the commodity.
Details to come…