Commercializing the Bank of Agriculture for national growth, by Kabiru Adisa
The Bank of Agriculture (BOA) was established to provide financial support for the agricultural sector, but it has struggled to fulfill its mandate due to limited funding and operational inefficiencies. Agriculture remains a crucial pillar of Nigeria’s economy, providing employment for millions and contributing significantly to GDP. However, access to affordable credit remains a major challenge for farmers and agro-allied businesses. To address this, BOA should be commercialized and mandated to establish branches in all 774 Local Government Areas (LGAs) in Nigeria. Also, its capital base should be expanded by requiring the Federal, State, and Local Governments to cede 1% of their annual FAAC (Federation Account Allocation Committee) allocations to BOA. This will significantly enhance its ability to lend to farmers and agribusinesses, driving economic growth and food security.
Currently, BOA operates more as a government agency than a fully functional bank, limiting its ability to provide accessible financial services to the agricultural sector. A commercialized BOA, operating with private sector efficiency but retaining its developmental mandate, would improve its service delivery, enhance financial sustainability, and increase credit access for farmers. With branches in every LGA, rural farmers would no longer need to travel long distances to access loans, reducing their reliance on informal money lenders. Expanding the bank’s presence nationwide would also promote financial inclusion, ensuring that even small holder farmers and agro-processors can benefit from structured agricultural financing.
The proposed 1% FAAC allocation to BOA is a strategic policy that will provide a steady stream of funding for agricultural development. This contribution from the Federal, State, and Local Governments would be ring-fenced for lending to agriculture and agro-allied businesses. A well-capitalized BOA would be able to offer low-interest loans, flexible repayment terms, and long-term financing options for mechanization, irrigation, storage, and value addition. This approach would not only increase food production but also boost agro-industrialization, creating jobs and enhancing the competitiveness of Nigeria’s agricultural exports.
Beyond capital expansion, BOA must modernize its operations to improve efficiency. Digital banking solutions, including mobile banking platforms and agency banking partnerships, should be integrated to serve farmers in remote areas. The bank should also collaborate with agricultural extension services, research institutions, and private agribusinesses to provide farmers with financial literacy training, technical support, and market access. By leveraging technology and strategic partnerships, BOA can minimize loan defaults, enhance transparency, and ensure that agricultural financing reaches the right beneficiaries.
The commercialization and expansion of BOA will have far-reaching benefits for Nigeria’s economy. Increased agricultural productivity will lead to greater food supply, lower prices, and enhanced food security. The injection of capital into rural economies will stimulate economic activities, create employment opportunities, and encourage youth participation in agriculture. Reduced dependence on food imports will conserve foreign exchange, while improved financing for agribusinesses will strengthen the country’s agro-processing capacity. These measures will ultimately position Nigeria as a global player in agriculture and agribusiness.
Reforming BOA through commercialization and increased capital funding is a necessary step toward unlocking Nigeria’s agricultural potential. A nationwide presence, combined with a sustainable funding model, will transform the bank into a reliable partner for farmers and agribusinesses. The time to act is now. The government must take bold steps to reposition BOA as a driver of economic growth, food security, and national prosperity.
