Power points for project proposal “The Role of Bank of

Agriculture in Nigeria Growth and Development (Using

IMO State as a Case Study)

By

Akujobi Doris Ijeoma

REG No: 20171074641

Chapter 1 Introduction

- The agriculture sector is crucial to Nigeria's economic development, with

over 60% of the population employed in this sector.
- The sector is facing several difficulties, including lack of finance,
inadequate productivity, outdated infrastructure, and a lack of modern-day
technologies.
- The Bank of Agriculture (BOA) was established in 1972 to help solve
these issues, providing financial services and support to farmers and
agribusinesses.
- However, the BOA's effectiveness is hindered by mismanagement and
corruption.
- Imo State is a key agricultural area in Nigeria, but it faces several
challenges such as inadequate infrastructure, low manpower, and
constrained access to financing.
- The goal of this study is to determine the BOA's contribution to the
expansion and advancement of Nigeria's agricultural industry, using Imo
State as an example.

Background of the Study

- The Bank of Agriculture (BOA) was established in Nigeria to provide

financial and technical support to farmers and agribusiness owners in the
country.
- The BOA has undergone several modifications over the years to enhance
its operations and assistive roles to farmers and the agriculture sector.
- The primary goal of the BOA is to aid farmers financially and technically
by providing a variety of financial services to its customers and putting
numerous agricultural policies and programs into action to encourage the
growth of agriculture in Nigeria.
- Through its loan facilities, the BOA has the unique ability to advance and
grow Nigerian agriculture by providing credit facilities and technical
assistance to farmers.
- The BOA's abilities and initiatives are intended to increase food security,
foster employment growth, lessen poverty, and wean Nigeria off its
reliance on oil.
- The BOA plays a significant role in the Nigerian agricultural sector and
is crucial to Nigeria's agricultural industry.
Statement of Problem

- Nigeria's agricultural sector is crucial to food production and the

economy, but small-scale farmers struggle to obtain financing due to high
costs and limited government assistance.
- Bank of Agriculture (BOA), a Nigerian government-owned financial
institution, was established to provide credit services to farmers, but small-
scale farmers still face challenges in accessing loans due to cumbersome
procedures, strict collateral standards, and high-interest rates.
- Inadequate infrastructure, corruption, and poor debt recovery also
exacerbate the problem, especially in rural areas where most small-scale
farmers live.
- The proposed study aims to evaluate the management and operational
effectiveness of BOA and identify problems and areas for development to
enhance the bank's ability to provide loan facilities to small business
owners in Nigeria over the long term, at an easily accessible and
affordable price.

Objectives of Study

1. To analyze the socio-economic characteristics of the farmer or recipient

of BOA loans and credit facilities.
2. To ascertain the Bank of Agriculture’s credit requirements and
efforts.
3. To identify the problems of the credit scheme from the point of view
of farmers and bank staff
4. To determine the factors that affect loan disbursement to clients.
5. To determine the factors influencing loan defaults and make
recommendations based on research findings.

Justification of Study

1. Policymakers and stakeholders can use the research to create policies

and plans that will make it easier for the BOA to support small-scale
farmers through financing.
2. Small-scale farmers will benefit from research demonstrating the
importance of loan facilities provided by the BOA and other agricultural
support services that can increase yields and profitability.
3. Researchers can use the study's findings to base their research on related
topics.
4. Potential agricultural investors will gain knowledge about BOA's
operations, challenges and prospects through this research.
5. The report will serve as a resource for students, researchers and
academics interested in agriculture and rural development.
6. The Imo State Government can use the research to understand the
BOA's contribution to the state's agricultural sector growth, and to
formulate plans and policies that will improve the effectiveness of the
BOA in Imo State.

Chapter Two-Conceptual Literature Review

- The Bank of Agriculture (BOA) was established in 1972 to provide

financial and technical assistance to farmers, agribusinesses, and
stakeholders in the agricultural sector in Nigeria.
- The BOA's activities are focused on credit provision, technical
assistance, market development, and research and development to increase
agricultural production, improve the standard of living of farmers, and
reduce poverty.
- According to the BOA's official website, the BOA's activities have had a
positive impact on Nigeria's agricultural sector by increasing agricultural
production by 50% and reducing poverty.
- BOA's activities have been particularly beneficial to farmers in Imo
State, with lending to farmers in Imo State increasing by 150% between
2015 and 2023, and agricultural production in the state increasing by 75%.
- However, the proposed research aims to examine the authenticity of the
BOA's claims and determine whether the metrics stated in the BOA-
authorized report were actually achieved.

The Concept of Growth and Development

- Economic growth refers to an increase in the size of an economy, while

development refers to an improvement in the quality of life of people in
that economy.
- Economic growth and development are important for reducing poverty,
improving the standard of living, creating social and political stability, and
protecting the environment.
- The neoclassical growth model and the endogenous growth model are
two important theories of economic growth.
- Challenges to economic growth and development include poverty and
inequality.
- Despite the challenges, economic growth and development are essential
for improving people's lives.

The Role of Agriculture in Growth and Development

- Agriculture plays a significant role in reducing poverty and ensuring food

security.
- In developing countries, agriculture is often the largest sector of the
economy and contributes to employment, output, and exports.

- Policies such as investing in agricultural research and development,

improving agricultural infrastructure, removing trade barriers, providing
farmers with access to credit and other financial services, and access to
markets can promote agricultural growth and development.
- The Nigerian government has implemented several policies to promote
agricultural growth and development.m
- Challenges in access to financial facilities and infrastructure availability
hinder the progress of the agricultural sector in Nigeria.

Review of Agricultural Policies in Nigeria

- Agricultural policies in Nigeria have had a significant impact on the

expansion of the agricultural sector.
- The government has formulated several policies including the
Agricultural Development Programme (ADP), National Fadama
Development Programme, and Commercial Agricultural Credit
Programme (CACS).
- The ADP was established in 1972 to encourage sustainable use of natural
resources and to lessen problems faced by rural farmers.
- The National Fadama Development Scheme was created in 1993 to boost
the productivity of Nigeria's small-scale farmers.
- The Commercial Agricultural Credit Scheme (CACS) was launched in
2009 to provide loans to large-scale commercial farmers.
- Despite these initiatives, the agricultural sector in Nigeria still faces
many challenges.

The Role of Financial Institutions in Agriculture

- Financial institutions play a crucial role in the growth and development
of agriculture by providing access to credit and other financial services to
farmers, improving agricultural productivity, efficiency, and reducing the
risks associated with farming.
- Different types of financial institutions include commercial banks,
development banks, microfinance institutions, and insurance companies.
- Studies have shown that access to credit can increase agricultural
productivity and profitability, and financial institutions can help to reduce
the risks associated with farming.
- In Nigeria, the Bank of Agriculture (BOA) is the leading financial
institution that provides services to farmers, including loans, deposits, and
insurance policies, and has helped to increase agricultural production and
productivity and reduce poverty in rural areas, and improve food security.
- With the support of financial institutions like BOA, Nigeria can continue
to increase agricultural production and productivity, reduce poverty, and
improve food security.

The Case Study of Imo State

- Imo State is a southeastern state in Nigeria with a population of about 4.5

million and a land area of about 7,000 square kilometres.
- Agriculture is the major economic activity in Imo State, and it produces a
variety of crops such as cassava, yams, rice, maize, and palm oil.
- The Bank of Agriculture (BOA) is a federal government-owned
development bank that provides financial services to farmers and other
agricultural businesses in Imo State.
- BOA has played a significant role in the development of agriculture in
Imo State by providing loans to farmers to improve their production and
productivity, providing training and technical assistance, and helping to
connect farmers with markets.
- Studies by Ajakaiye & Isiaka (2017), Nwagwu (2016), and the World
Bank (2015) confirm the role of BOA in the development of agriculture in
Imo State.

Theoretical Literature Framework

- Theoretical framework for this study is based on Agricultural

Development Theory and Credit Theory.
- Agricultural Development Theory highlights the role of agriculture in
economic growth, poverty reduction, and food security, and requires a
favourable policy environment, improved infrastructure, access to
technology, and credit facilities to support farmers' productivity.
- Credit Theory emphasizes the importance of access to credit facilities in
facilitating economic growth and development by increasing investment,
creating employment opportunities, and reducing poverty.
- These theories provide a foundation for understanding the role of the
Bank of Agriculture in promoting agricultural development and economic
growth in Nigeria.
- The study will also adopt the Financial Intermediation Theory, which
emphasizes the role of financial institutions in facilitating economic
growth through financial intermediation, and will evaluate the extent to
which the Bank of Agriculture has effectively played its role as a financial
intermediary by providing credit facilities to the agricultural sector.
- The application of these theories will guide the analysis and
interpretation of the study's findings.

Empirical Review

- The Bank of Agriculture (BOA) in Nigeria has been providing capital to

farmers and agricultural companies, but faces challenges such as
insufficient funding, poor management, operational inefficiencies, and a
small number of small-scale farmers in rural regions.
- The Nigerian government has taken steps to reposition the BOA,
including recapitalization and creating a new strategic plan, but the bank
still struggles to carry out its purpose.
- A review of the BOA's operations is necessary, and new approaches
should be developed to increase the efficiency and effectiveness of the
bank and ensure a coordinated approach to the challenges facing the
Nigerian agricultural sector.
- All stakeholders, including governments, farmers, agribusiness, and
development partners, must work together to meet the challenges of the
BOA and ensure that it continues to contribute to the development of
agriculture in Nigeria. (Ogen, 2018; FMITI, 2020; Adeniyi et al., 2020)

Historical Background and Evolution of the Bank of Agriculture

- The Bank of Agriculture (BOA) has played a critical role in Nigerian

agricultural development since its establishment in 1972 (CBN, 2018).
- In 2000, the Family Economic Development Program, National
Agricultural Credit Board, and People's Bank of Nigeria merged to form
the Bank of Agriculture (BOA) (CBN, 2018).
- Despite facing challenges such as limited funds, weak governance, and
low loan repayment rates, the BOA continues to provide loans and support
to farmers and agribusinesses in Nigeria (Obasanjo et al., 2017).
- Studies have shown that the lending process of the BOA is cumbersome
and inefficient, and farmers face barriers such as high-interest rates and
insufficient collateral (Oguma and Iyoha, 2017; Ogunleye and Ogunleye,
2018).
- A comprehensive empirical review of the activities of the BOA is needed
to understand its role in the growth and development of Nigerian
agriculture and address current challenges (CBN, 2018; Obasanjo et al.,
2017).

Agricultural Loans and Credit Facilities Provided by the Bank of

Agriculture

- The Bank of Agriculture (BOA) provides loans and credit facilities to

agro-allied businesses, farmers, and other participants in the agricultural
value chain in Nigeria.
- BOA offers different types of loans, including production loans,
processing loans, and marketing loans, which are designed to meet the
financing needs of agricultural stakeholders.
- BOA also provides credit facilities such as overdrafts, working capital
facilities, and leasing facilities at competitive interest rates and flexible
repayment terms.
- Access to financing is crucial for the expansion and development of
agriculture in Nigeria, and studies have shown that access to credit has a
significant impact on farm income and agricultural productivity.
- Therefore, the Bank of Agriculture plays a critical role in Nigeria's ability
to provide loans to agriculture, and the growth and development of
agriculture in the country depend on the availability of loans and lines of
credit (Olajide & Adepoju, 2018; Ademiluyi & Salimonou, 2016; BOA,
2021).

Challenges of Assessing Credit Facilities from the Bank of Agriculture

- The Bank of Agriculture (BOA) faces challenges in providing loans to

farmers and agribusinesses due to insufficient funding from the
government, lack of collateral for tenant farmers, and difficulties in loan
recovery.
- The BOA has been criticized for lengthy loan application processes,
high-interest rates, and favouring large farmers over small farmers.
- These challenges must be addressed to improve the BOA's ability to
provide credit facilities to farmers and agribusinesses and promote
agricultural growth in Nigeria.

Review of Previous Studies on the Bank of Agriculture and its Impact

on Agriculture in Nigeria

- Several studies have been conducted to evaluate the impact of the Bank
of Agriculture (BOA) on agriculture in Nigeria.
- Adekanye et al. (2015) found that BOA's loan disbursement was
inadequate and unevenly distributed across the country.
- Akinola and Adebayo (2018) identified high-interest rates and collateral
requirements as major challenges to farmers' access to credit from BOA.
- Adebayo and Adeyemo (2017) found that BOA loans have a positive
impact on agricultural productivity and income generation but
recommended improvements in the loan disbursement process,
simplification of loan application procedures, and reduction in collateral
requirements.
- Olagunju et al. (2020) found that BOA's credit facilities have a positive
impact on the productivity and income of small-scale farmers but
identified challenges such as inadequate funding, poor loan recovery, and
lack of adequate information for potential borrowers.
- These studies provide valuable insights for policymakers and
stakeholders on how to improve the effectiveness of BOA's loan schemes
and promote agricultural development in Nigeria.

Analytical Literature Review

-The Bank of Agriculture (BOA) in Nigeria is a development finance

institution that provides financial and other support to the agricultural
sector.
-The BOA has played a significant role in the growth and development of
the agricultural sector in Nigeria by increasing agricultural production,
improving food security, and creating jobs.
-The BOA faces several challenges, including lack of funding, inadequate
infrastructure, lack of skilled staff, poor governance, and political
interference.
-These challenges have hampered the BOA's ability to achieve its
mandate, and it needs to address them to be more effective in supporting
the agricultural sector.
-If the BOA can address these challenges, it will be better positioned to
play a leading role in the development of the agricultural sector in Nigeria.

Chapter Three- Research Methodology

- This chapter discusses the research methodology that would be used to

achieve the objectives of the study.
- It presents the study area, sample size and selection, data collection, data
analysis, and limitations of the study.

Study Area:

- The study will be conducted in Imo State, Nigeria.

- Imo State is one of the most agricultural states in Nigeria, with a diverse
range of crops and livestock.
- The state has a population of about 5.5 million people and is home to
many small-scale farmers(BOA,2021).

Sample Size and Selection:

- The study will use a purposive sampling technique to select respondents.

- A total of 210 respondents- 200 Farmers and 10 bank staff, will be
selected for the study.
- The sample size will be determined based on the formula for estimating
sample size for a finite population.

Data Collection:

- The primary data for this study will be collected using structured
questionnaires.
- The questionnaire will be divided into sections, including demographic
information, the role of the Bank of Agriculture in agricultural
development, and challenges faced by farmers in accessing credit facilities
from the Bank of Agriculture.
Data Analysis:

- The data collected will be analyzed using descriptive and inferential

statistical techniques.
- Descriptive statistics such as frequencies and percentages will be used to
summarize the demographic characteristics of the respondents.
- The inferential statistics will be used to test the hypotheses formulated
for the study.
- The statistical package for social sciences (SPSS) software will be used
for the data analysis.