The International Finance Corporation (IFC) has expressed concern over the low allocation of commercial bank lending to Nigeria's agricultural sector. According to IFC, less than 5% of commercial banks' lending in Nigeria goes to agriculture, indicating a serious development gap. This was stated by Mr. Oliver Buyoya, Divisional Director, Nigeria and Central Africa, IFC, during a press briefing in Lagos to mobilize Nigerian financial institutions for the African Financial Summit 2026.
The African Financial Summit 2026, scheduled to hold in November in Luanda, Angola, has the theme "Making Capital Count: Unlocking Growth Through African Finance." The summit aims to bring stakeholders in the financial service sub-sectors together to co-create solutions for financing challenges in various sectors, including agriculture and infrastructure. Buyoya emphasized the need to understand the barriers hindering the flow of credit to agriculture and develop solutions to address them.
IFC is developing a value chain analysis to address the barriers hindering the flow of credit to agriculture. Buyoya noted that commercial banks are financial intermediaries and are unlikely to deploy money in sectors considered risky. He stressed the need to look at the agriculture sector from a value chain standpoint, considering how to move goods produced to markets. This approach aims to provide a better understanding of the sector and unlock financing opportunities.
The low allocation of commercial bank lending to agriculture has significant implications for Nigeria's food security and job creation. Buyoya emphasized that if Nigeria wants to ensure food security for its population and create jobs, it cannot continue to have such a low allocation of lending to agriculture. The IFC is working to mobilize funding from different sectors and partner with commercial banks to increase access to finance for the agricultural sector.
Director of AFIS, Mr. Hicham El Morabet, noted that Africa faces a paradox in that the return on regional equity for financial institutions is about 90%, while the cost of finance is high, making it difficult for operators in the real sector to finance their businesses. He outlined the six strategic priorities of the summit, including finance that reaches the real sector, scale with purpose, and technology on African terms.
El Morabet stated that AFIS 2026 will focus on implementation, having spent the first five years discussing how to make the African financial industry stronger. The summit aims to move from dialogue to implementation, providing a platform for stakeholders to co-create solutions and channel investments into the real sector. This approach is expected to help address the financing challenges facing Africa's economic growth.
The African Financial Summit 2026 provides an opportunity for Nigerian financial institutions to engage with stakeholders and explore solutions to the country's development gaps. With a focus on making capital count and unlocking growth through African finance, the summit is expected to drive meaningful discussions and actions to address the continent's financing challenges.
Key points
- IFC urges commercial banks to increase lending to agriculture to address food security and job creation challenges.
- African Financial Summit 2026 aims to co-create solutions for financing challenges in various sectors.
- Nigeria's commercial banks allocate less than 5% of lending to agriculture, a serious development gap.
