According to the "Nigeria select issues" report released by the International Monetary Fund (IMF, or the Fund), only 24.0% of loans disbursed by the Central Bank of Nigeria (CBN, or the Apex Bank) under the Anchor Borrowers’ Programme (ABP, or the programme) has been fully repaid. The Fund noted that the poor repayment structure (in cash or kind) was the main reason for the low repayment levels. Conversely, the Apex Bank refuted IMF’s report by disclosing that 52.4% of the loans has been repaid by farmers under the programme as of February 2023.
 
The ABP was launched by presidency in November 2015 to boost agricultural production and reverse Nigeria’s negative balance of payment. The programme was designed to create economic links between small-holder farmers and anchor companies involved in the production and processing of key agricultural commodities. Although the Federal Government has disbursed N1.1tn under the programme so far, the impact of the agricultural credit on production growth has been minimal. Notably, the agricultural sector (the sector) slowed to 1.9% y/y in 2022 from a 2.1% y/y growth recorded in 2021. The impact of the flooding crisis on post-harvest crops in Q3-2022 amid insecurity issues in food-producing states hampered the sector’s growth.
 
Going forward, we expect moderate growth in the agricultural sector as legacy issues around insecurity, flooding, farming methods and route-to-market will remain substantial stumbling blocks to rapid growth of the sector. We reiterate that for the agricultural sector to expand, farmers must embrace modern methods of farming. Similarly, the government must address issues around insecurity, flooding and invest aggressively across the entire agro-business value chain while also implementing supporting policies that will help address long-standing structural challenges, as well as significantly raise its budgetary allocation to the sector. In the 2023 budget, the FG approved the allocation of 1.1% to the sector, which is 60bps lower than the allocation in the 2022 budget and far below the 10.0% agreed upon with other African governments in the Maputo Declaration in 2003 and the Malabo Declaration in 2014.