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Abstract

Following the economic downturn of 2008/2009, the Commercial Agriculture Credit Scheme (CACS) was introduced to promote commercial agriculture and to complement other existing special initiatives of the Central Bank of Nigeria. After 3 years of its operation, the sum of N175.525 billion has been disbursed to 222 projects/ promoters. The distribution of the fund disbursed showed that 68% went to the processing segment of the value chain while 29% went to the production segment. While the CACS was found to be contingent to an increase in bank lending to the agricultural sector in Nigeria, there seem to be no significant effect of the fund on agricultural sector growth rate. It was therefore recommended that the 7 year tenor of the Scheme be extended and the need to set milestones (Specific targets and timelines) for deliverables like the right quantum of funds to be deployed, expected increase in flow of credit to agriculture, number of jobs to be created, expected growth rate in agricultural sector GDP etc. The need to build the capacity of bank staff and value chain actors and invocation of sanctions on erring banks to discourage infractions cannot be overemphasized.

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