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• Bank MD admits failure of ABP loans, as recapitalisation fails
• BPE affirms BoA unviable, difficult to recapitalise

Strong indications have emerged that the Bank of Agriculture (BoA) has technically become unsustainable and riddled with bad debt to the tune of N77.1 billion. This is amid failed restructuring and recapitalisation plans that had been proposed since 2019.

More than two years after the bank was billed for recapitalisation through public offer of shares predominantly targeted at farmers, processors and the public, the plan has failed to materialise.

This is buttressed as the House of Representatives is currently probing how N91 billion meant for the Anchor Borrowers’ Programme (ABP) was disbursed by the BoA and why the bank has been unable to recoup the loans.

This is despite threats of arrests by the Central Bank of Nigeria (CBN) to farmers who default in paying back the ABP loans. According to the CBN Comptroller, Bauchi Branch, Saladu Idris, bulk of the loan defaulters were particularly among rice farmers.

Recall that in November 2015, President Muhammadu Buhari launched the ABP to boost agricultural production and reverse Nigeria’s negative balance of payments on food. Farmers captured under this programme include those cultivating cereals (rice, maize and wheat).

The programme was intended to create a linkage between Anchor companies involved in food processing and smallholder farmers of the required key agricultural commodities, through commodity associations.

Till date, the ABP has disbursed N864 billion to 4.1 million farmers growing 5.02 million hectares of land, inclusive of the N91 billion disbursed by the BoA.


Managing Director of BoA, Kabir Mohammed Adamu, who appeared before the House of Representatives Committee on Agricultural Produce and Services during a public investigative hearing on the matter last week, said N14,678,423,065.03 was repaid, leaving a balance of N77,179,823,985.20 (principal) un-recouped as of October 31, 2021.

His explanation, however, did not go down well with the lawmakers, as they sought relevant documents on disbursements, which the BoA boss failed to produce.

Hon. Awaji-Inombek Abiante had asked for the hearing to be stepped down to enable the Managing Director to furnish the committee with the relevant documents as requested.

Analysts said the failure is an indication that the bank has completely gone under, with very slim chances of revival.

They said due diligence, taking precautionary steps to prevent failure, damage or danger, must have been ignored, or corruption within the system must have dealt a devastating blow to the bank.

Due diligence in banking and finance, they added, is the careful procedure to know more about clients, either corporate or individual.


Part of due diligence in the context of the BoA should have been following up of loan utilisation as intended and presented to the bank, a process, analysts said were not taken with the ABP loans.

A Project Manager, Facility Department of an old generation bank, who demanded anonymity, explained to The Guardian that BoA should have followed five major due diligence procedures before disbursing facilities. The procedures are, character of the loan applicant; capacity to repay the loan; the capital the applicant already has; collateral security and condition of the loan. If the loan is given for agricultural purposes, it must be used for the same. The farmers must comply with the condition of approving the loan, he said.


A palm oil investor and former President of the National Palm Produce Association of Nigeria (NPPAN), Henry Olatujoye, said the bank’s unviable state has to do with the way BoA is structured.

He said ordinarily, BoA should be a leading institution advancing loans to farmers and food processors, but collateral security attached to the facility could not be met by real, but small-scale farmers.

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He suggested that “BoA has to be restructured” so that it would give farmers access to facilities needed for food production, productivity of farmers and food security.”

In the same vein, Executive Director of the Cocoa Research Institute of Nigeria (CRIN), Dr Patrick Adebola, said perhaps the bank was failing because real farmers were not getting the loans.


“I think the bank should target farmers who are directly involved in production instead of financing agricultural marketing. The interest rate should also be reduced to single digit.

“The real farmers are not getting the facility probably because of collateral. I also think the farmers might invest in the recapitalisation of the bank if they are sure of the returns on their investments. The bank should also try to win the farmers’ confidence,” Adebola said.


Manager, Technical and Regulatory, Agricultural Solutions, Adewole Fatokun, explained that BoA is not well funded since the inauguration of President Muhammadu Buhari.

He said: “NIRSAL, an arm of CBN, is doing most of agricultural financing now through various ABP schemes. BoA is actually sidelined now.”

Also, a former South-West Regional Director, Federal Ministry of Agriculture, Mr Julius Odeyemi, said the impetus expected from the ministry to boost the bank is no more there, unlike when Dr Akinwumi Adesina was the minister.

“Remember that Nigerian banks want quick returns, which agriculture don’t readily provide. So, when this push isn’t there from the government, they avoid it. This is the truth of the matter, and until we have another person who can drive it, the situation will remain so. A personal opinion though, because I was once involved,” he said.


Chairman, Answer Industries Ltd, feed millers and egg processors, Segun Shewoniku, said in the mid-1970s, it was known as Nigerian Agricultural and Cooperative Bank (NACB). It was properly funded and its lending was majorly to farmers’ cooperative groups and with collaboration with the River Basin Authorities.

Unfortunately, he added, the bank’s focus was distracted and negative influences of supervising government ministry, which clashed with business-like objectives. “The result,” he explained, “is granting of loans to paper farmers and highest bidder collaborators in crime.”

Shewoniku said recapitalisation efforts might not be visible as the bank might not have what it takes to provide a transparent and audited list of loan beneficiaries and accounts.

“With such negativities, devoid of consequences, such an organisation is likely to be less viable,” he said.

“The way forward,” he added, “is for a total takeover from ministerial bureaucracy, identifying leakages and deviations, getting the right hands on deck and inviting into the boards relevant professional and interest groups with opportunity for agro-related companies to come on board as shareholders.”

SIMILARLY, the agency handling BoA’s recapitalisation project, the Bureau of Public Enterprise (BPE), in an exclusive disclosure to The Guardian, also affirmed the sorry state of the bank.

Responding to enquiries, Head, Public Communications, BPE, Amina Tukur Othman, explained that the proposed recapitalisation and restructuring of BoA had not materialised till date as a result of the extent of mismanagement and dysfunctionality of the bank.

“The transaction is experiencing a slight delay because of the detailed processes and procedures involved in negotiating terms and conditions of restructuring and recapitalisation by the shareholders of the bank.

“Recall that bank has been bedeviled with various issues ranging from years of mismanagement, huge non-performing loans, absence of corporate governance and functional organisational structure,” the BPE spokesperson said.

The bureau added that the issues had posed a challenge to its efforts to get the existing shareholders to inject fresh capital to resuscitate the bank.

It will be recalled that former Minister of Agriculture and Rural Development, Audu Ogbeh, in an interview with The Guardian on May 27, 2019, had said BOA was not viable, and that the BPE had completed revitalisation plans.

He had said: “The lead consultant has now taken up the responsibility of marketing the idea to the public and when that happens, we begin to sell shares. The idea is that farmers will own 40 per cent of the shares of the bank.

“The CBN will hold 10 per cent; the Ministry of Finance, 10 per cent; the private sector operators, 30 per cent. That is the structure we want to use.”

The idea was that farmers should see it as their bank, put their money in it as 40 per cent equity of a recapitalisation target of between N200 and N250 billion for the bank so that farmers could borrow at five per cent interest rate.

“We think, in another two months or so, the sale of shares should be done,” the ex-minister had said in 2019.

However, the BPE spokesperson said intense stakeholders’ consultations were ongoing with a view to concluding the transactions without further delay and the shareholders recently agreed on the terms of the recapitalisation.

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