SWITZERLAND, JUNE 04 – As Nigeria seeks to diversify her economy from oil and optimally exploit agriculture, Zenith Bank Plc has decided to target its lending to the farmers and raw-material suppliers in the sector.
Speaking to Bloomberg, Chief Executive Officer Zenith Bank, Ebenezer Onyeagwu said, “Companies that will be leaders in the next five years are those who will be sourcing their raw materials locally,”
“If you can get your raw materials here, you’re in business and it’s cheaper — your holding cost is cheaper, your freight cost is reduced,” he said.
Following the crash of oil prices and lockdown measures, Nigeria’s second-biggest bank by market value seeks to meet the increased demand of businesses needing to source raw materials locally to curb the spread of the coronavirus dried up foreign-currency inflows.
“Many of Zenith’s customers want to invest in crop production or the processing industry, so they produce products they can sell to breweries, food and pharmaceutical companies.
“The bank is encouraging customers to access funds from the central bank, which it matches with dedicated officials to ensure the projects they undertake are well executed.
“Nigeria could potentially become a non-oil exporter over the medium- to long-term as companies strive to meet the food requirements of the nation’s 200 million people,” Onyeagwu added
The central bank is also offering loans to farmers through commercial banks at preferential rates to stimulate the development of the industry and has also banned imports on dozens of goods from soap and cement to milk and rice.
Recall that last month, the apex bank stated that it not will provide foreign exchange for goods with local substitutes because it could not spend the country’s limited reserves on trading activities that are counter-productive to the economy.
The combined efforts of commercial banks and central bank towards agricultural development, if sustainable could propel the nation towards self-sufficiency in food production.