Agriculture Can Generate Employment And Reduce Poverty- UBA Boss

The United Bank for Africa Plc (UBA) has identified the capacity of agriculture to bolster sustainable growth and development in other sectors of the economy as its reason for focusing on the sector. Speaking at the just concluded 19th Nigeria Economic Summit in Abuja, Group Managing Director, UBA, Phillips Oduoza explained that businesses in agriculture have the potency to generate employment and reduce poverty on a significant scale, which he said, informed the increase in lending level to the sector. Speaking during a panel discussion on financing agribusiness to guarantee successful industry transformation, Oduoza said: “UBA currently has a minimum of seven per cent of its gross loan portfolio in the agribusiness sector. Our total intervention in the sector is over N41 billion, making UBA one of the largest financiers of agricultural projects in the country.” Citing the bank’s experience, he revealed that the risks in financing agribusinesses were low. According to him, UBA’s Non-Performing Loans (NPL) in its agricultural lending portfolio was as low as 0.06 per cent. However, to further boost productivity in the agribusiness value chain, Oduoza advocated for necessary interventions across all value chains in the sector, in order for Nigeria ’s potential in the sector to materialise. “In UBA, our financing of activities in the agribusiness sector cut across the value chain, from production, to storage, processing, distribution and even transportation”. “We strongly believe that for Nigeria to see growth in the agricultural sector, interventions must be total across all the value chain,” Oduoza said. “The value chain financing approach adopted by the UBA Group is to ensure that maximum benefits are derived from all participants in the agribusiness line. The strength of the value chain is as good as its weakest link. So, everyone must be considered from the farmer in the village to the process that will transfer the goods to the consumer in town in whatever form and put money back in the hands of the farmer, he explained. “Once the entire value chain is looked at, agriculture becomes very profitable and a very good business for financial institutions to key into,” he noted. Adesina Akinwumi, the minister of Agriculture, used the opportunity of the panel discussion to appreciate the role being played by UBA in its finance of key projects in the agribusiness sector. He was particularly impressed by the low rate of defaults by farmers who accessed the agribusiness loans through UBA. He advised other financial institutions to emulate the strategies put in place by UBA.