Rising Food Prices: Kola Masha, MD Babban Gona, Interviewed on CNBC Africa Power Lunch West Africa
In an interview on CNBC Africa’s Power Lunch West Africa series, Kola Masha, MD Babban Gona, explained the reasons behind the year-on-year rise in headline food inflation from 20.25% to 20.32%. He observed that there is need to increase average smallholder productivity in order to satisfy domestic demand. However, access to working capital is relatively low, exacerbated by the recent FX challenges and low liquidity in the private sector. Even though agriculture contributes 30% of GDP, it only commands 3% of commercial lending. According to Kola, with 85 million hectares of arable land, the sector requires $85 billion in financing. Off-balance sheet lending by the government represents a good first step but there is need to overcome perceived risk to agricultural lending and find innovative ways to catalyze additional capital in order to boost smallholder productivity. Increasing domestic supply will help keep food prices down for better food security.
You can watch the full interview here.