KEY POINTS
- The International Finance Corporation has revealed that less than five per cent of commercial bank lending in Nigeria goes to the agricultural sector, creating a major development gap.
- Briefing journalists in Lagos ahead of the upcoming African Financial Summit in Luanda, Angola, IFC officials emphasized the need to channel capital into the real economy.
- The 2026 summit theme, “Making Capital Count: Unlocking Growth Through African Finance,” will focus on converting regional savings into actionable investments and addressing high financing costs.
MAIN STORY
Nigeria faces a severe structural development gap as commercial bank lending to the agricultural sector remains below five per cent, according to the International Finance Corporation (IFC).
The disclosure was made during a press briefing in Lagos convened to mobilize Nigerian financial institutions for the upcoming Africa Financial Summit (AFIS 2026), scheduled to take place in November in Luanda, Angola, under the theme “Making Capital Count: Unlocking Growth Through African Finance.”
Oliver Buyoya, the IFC’s Divisional Director for Nigeria and Central Africa, stated that despite hosting one of the most sophisticated banking sectors on the continent, a critical pillar of the real economy continues to suffer from credit starvation.
Buyoya explained that commercial banks view agriculture as high risk due to traditional structural barriers, noting that the corporation is developing comprehensive value chain analyses to help mitigate risks and facilitate credit flow from financial intermediaries to farming ecosystems.
Addressing the broader economic paradox, AFIS Director Hicham El Morabet pointed out that while African financial institutions enjoy strong performance with regional return on equity doubling global averages, the high cost of capital severely restricts the real sector’s ability to finance infrastructure and corporate development.
El Morabet noted that institutional investors across the continent manage over $2 trillion in assets. Consequently, AFIS 2026 will pivot from dialogue to implementation, prioritizing strategic goals such as driving finance into the real economy, converting native African savings into domestic investments, and modernizing regulatory frameworks.
THE ISSUES
- Persistent risk aversion among commercial lenders leaves critical sectors like agriculture heavily underfunded, threatening long-term food security and rural employment generation.
- The wide disconnect between high institutional asset values and expensive credit costs hampers industrial expansion and infrastructure development across regional markets.
WHAT’S BEING SAID
“We have in Nigeria probably one of the most sophisticated banking sectors in Africa. And yet, one of the most important sectors of the economy receives less than five per cent of lending from commercial banks. That is a fact.”
- Oliver Buyoya, Divisional Director, Nigeria and Central Africa, IFC
“For the African banking sector, for example, the average return on regional equity is around 90 per cent, and it is the double of the global average. Also, in terms of number of assets under management for African institutional investors, there are more than $2 trillion assets under management.”
- Hicham El Morabet, Director, AFIS
WHAT’S NEXT
Nigerian financial stakeholders and banking executives will finalize preparations to attend the November summit in Angola, where working groups will co-create financing solutions for agriculture and infrastructure.
BOTTOM LINE
Ahead of the Africa Financial Summit in Angola, the IFC has spotlighted Nigeria’s agricultural lending deficit, urging financial leaders to bridge the gap between institutional wealth and productive economic sectors.
