ASSESSING THE EFFECTIVENESS OF METHODS USED IN FINANCING THE NIGERIAN MILLENIUM GOALS AND THE ROLE OF OIL EXPLORATION

摘要

The agricultural financing policies directed at reducing poverty and eradicating hunger in the past have not made their desired impact for a number of reasons. The commercial banks designated to carry out the credit programs were reluctant to lend to agriculture because of the inherent risks involved and low returns. For this reason, federal government established the Agricultural Credit Guarantee Scheme Fund (ACGSF) managed by the Central Bank of Nigeria (CBN) to guarantee banks' loans to farmers and minimize the banks' lending risk. Other credit schemes to boost agriculture and reduce poverty were also established but these schemes failed because much of the funds did not go to the farmers to whom it was designed. The banks required major collateral before they could lend to farmers who did not have such collateral. The specialized banks that were set up to manage these schemes also failed because of poor management and corruption. Despite the efforts by the government to reduce poverty and hunger through agriculture development, the population of Nigerians continues to live in poverty and hunger, especially in rural areas because the credit guarantee schemes did not work to meet desired goals. Microfinancing seems to be a viable alternative. Microfinance banks, unlike conventional commercial banks, do not require collateral from the poor before they could lend to them, and for this reason, Microfinance banks are much more accessible to the rural farmers who could engage in agriculture in the rural areas and employ the rural poor in that process. Besides, micro financing is a practice rooted in rural culture of Nigeria. As a result, small-scale farming if properly financed through Microfinance banks can increase the productivity of existing rural farmers, attract unemployed youths, reduce rural—urban migration, increase food supply, and reduce food importation and poverty. Perfecting the financing methods for the MDG goals would not be enough in eradicating poverty and hunger in the oil producing region of in the Niger Delta area due to the massive environmental problems in the area. The negative activities of the oil and gas exploration in the area have degraded the farmlands, crops, rivers, creeks, water, air quality, among others. Accordingly, no amount of agricultural financing schemes is likely to clean the pollutants in the air, water, and farmlands to make the agriculture viable again. Consequently, industrialization and infrastructure development of the Niger Delta area seem to be the most viable alternatives that will provide jobs and economic capability to sustain the people and the economy of the Niger Delta.