BEVERLY HILLS, April 11, (THEWILL) – To save over two million jobs and avert threats to about N200 billion projects nationwide, the Central Bank of Nigeria (CBN) has ordered the suspension of all facilities under the Anchor Borrowers’ Programme (ABP) domiciled at the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL). The apex bank said the move was in line with its stock-taking process to monitor the intervention programmes because of their crucial role in developing the economy.
The NIRSAL and the ABP are initiatives of the Nigerian government through the CBN to revolutionize agriculture and boost non-oil revenue which has remained an elusive low-hanging fruit over the decades. They are positioned as hallmarks of the Bank’s Development Finance programme to create jobs and diversify the economy.
Over two million jobs have been created under the ABP since inception in 2015, while institutions were appointed to participate in the disbursement of the CBN N220 billion Micro, Small and Medium Enterprises (MSME) intervention fund launched in 2013. It is on this basis that NIRSAL was appointed one of the Participating Financial Institutions (PFI) of the scheme.
SCHEME IMPLEMENTATION
The NIRSAL-ABP integration has created avenue to tackle the funding challenge of the small-holder farmers as the CBN has made massive pool of concessionary funds available to beneficiaries. Among the beneficiaries are 400,000 farmers of Rice, Wheat, Maize, Cotton, Cassava, Poultry, Soybeans and Groundnut. The apex bank has also, through the scheme, created 1.2 million indirect jobs. Collectively, these farmers are estimated to have, on the back of the ABP, cultivated over 400,000 hectares of land which is a boost to employment.
The establishment’s strategic risk management framework is designed to achieve high loan performance rates and curb defaults. According to records, NIRSAL has facilitated highly affordable, single-digit interest rate finance of about N5.7 billion to over 33,000 farmers for the wet and dry seasons since 2017.
It also undertakes the matching of farmers’ details with Bank Verification Numbers (BVN) for those who have account numbers and the creation of new ones for those who do not. Through this, about 500,000 farmers have had their details captured nationwide in the NIRSAL farmer database, which serves as the pool from where beneficiaries of the program are taken.
The CBN said the strategic importance of the initiatives makes strict monitoring imperative; hence it carries out stock-taking at the appropriate times to assess performance and provide directions where necessary. This was the case when it ordered the temporary suspension of the ABP loans during a stock-taking exercise at NIRSAL, a decision that has created widespread reactions in the media space.
WHAT WE DID
The CBN Ag. Director, Corporate Communications, Osita Nwanisobi, told THEWILL that, contrary to media reports linking the suspension of the ABP to alleged corruption at NIRSAL, the apex bank only told the agric risk agency “to stop” further lending in order to carry out a stock-taking in line with the tradition of the Bank.
“We are doing stock-taking; we told them to stop so we can carry out the exercise and do it effectively. I don’t know what people mean by ‘suspension’; but what I am telling you is that we did not stop the Anchor Borrowers’ Programme. The scheme is still running at NIRSAL. There was no corruption case involved. It is a routine process and that is what it is. But if ‘suspension’ is the only way people can understand it, then bear in mind that the Programme has not been brought to a halt,” Nwanisobi said in a telephone chat.
When contacted, Head of Corporate Communications, NIRSAL, Anne Ihugba, forwarded the establishment’s response entitled, ‘NIRSAL Plc and the CBN’s Anchor Borrowers’ Programme: The incontrovertible facts beyond baseless fictions’.
Debunking the allegation of corruption against its leadership, NIRSAL said “The (media) report is not only lacking in credibility but is also totally ridiculous when clear facts and contexts are considered.”
“This statement is in response to enquiries from concerned stakeholders, partners and other associates following the publication of a sponsored and defamatory report by an online medium that is fast gaining notoriety for the dissemination of elaborate fictions in the name of journalism.
“The report was based on a document that was unofficially obtained to hoodwink the public with a distorted interpretation of privileged official communication between NIRSAL Plc and its owner, the Central Bank of Nigeria, which oversees our operations.
“In their desperation to throw mud, a routine communication between CBN and NIRSAL Plc to activate a workable loan repayment/recovery agreement with Anchor Borrowers’ Programme (ABP) farmers was transformed into a ‘corruption scandal’ allegedly perpetrated by NIRSAL Plc’s leadership.”
The NIRSAL’s publication however revealed that the CBN ordered ‘a stop’ to the ABP facilities to scrutinize a huge backlog of unrepaid loans by beneficiaries of the scheme:
“At harvest, farmers are expected to pay back their loans in cash or kind or both.
“Where farmers cannot pay back over the tenor of their loan facility, the CBN in most cases provides these farmers additional time to enable them to pay back.
“Where farmers refuse to pay back, the CBN rightly suspends further loan disbursements to these farmers, gives them forbearance to pay back in return for re-consideration to re-join the programme through the PFI that organized them in the first place.
“It is this ordinary, internal, day-to-day program management and administrative communication between two related institutions that these unscrupulous online media platforms have illegally acquired and made an issue of ‘corruption scandal against NIRSAL Plc and its Management’.”
However, a source close to NIRSAL said the action by the CBN was necessary to save the scheme, jobs and huge resources committed to it. “The measure is necessary to ensure the scheme does not go the way of government businesses in this country. That would spell a doom to the well-conceived programme that has created over two million direct and indirect jobs with not less than N200 billion in facility exposure”, the source, a financial service consultant, told THEWILL on point of anonymity.
ATTACKS, ATTACKS
Both NIRSAL and ABP have been targets of attacks in recent past by various stakeholders who accuse them of corruption and failure to make funding accessible to the farmers.
The groups include the coalition of farmers under the auspices of All Farmers Association of Nigeria (AFAN) which had petitioned the Federal Government to investigate the activities of NIRSAL over corruption allegations.
The Nigerian Agricultural Commodity Associations also called on President Muhammadu Buhari to beam its anti-corruption searchlight on the ABP over what it called ‘insider dealings and total failure of the scheme’.
The immediate past chairman of the Economic and Financial Crimes Commission (EFCC), Mr Ibrahim Magu, in September 2019, accused operators of the ABP as engaging in corruption.
“Corruption has crept into the implementation of the programme. We want to ensure that we don’t create more crisis from a crisis situation. In the Anchor Borrower’s Programme, there are people who are bagging sand instead of fertiliser”, Magu said at the 15th Anti-Corruption Situation Room organised by the Human and Environmental Development Agenda (HEDA) in Kaduna.
On the flipside, beneficiaries of the ABP have also fallen victims to natural causes such as flood and the COVID-19 pandemic. Farmer groups including the Maize, Poultry, Catfish associations in July 2020 lamented over the inability of their members to repay their 2019/2020 N5.4 billion loans due to the ravaging effects of COVID-19.
The president of Maize Association of Nigeria (MAAN), Dr Bello Abubakar-Annur, in an interview with a national daily, said that his members participated in the 2019 ABP credit facilities for the first time, “but unfortunately, COVID-19 had truncated the repayment of the loans”.
SCHEME ON COURSE
Notwithstanding the criticisms and protests, stakeholders commend the CBN intervention initiatives that gave birth to NIRSAL and ABP, especially the support to MSMEs which are recognized as engine of the economy.
“Over the last few years, the ABP has turned out to be one of the most successful programs of the CBN and the Federal Government of Nigeria (FGN) with outcomes that include reduction in food importation, full capacity utilization of agricultural firms, preservation of scarce foreign exchange and creation of jobs. It is important to note that the ABP has also helped Nigeria exit recession two times in record time
“NIRSAL Plc will continue to focus on making progress on its mission and mandate as we strive to achieve more critical outcomes and milestones for the agricultural and financial sectors in the larger interest of Nigeria and Nigerians,” NIRSAL management reassured in the public notice made available to THEWIIL.
The NIRSAL is a US$500 million Non-Bank Financial Institution wholly-owned by the Central Bank of Nigeria (CBN). It was created to Redefine, Dimension, Measure, Re-Price and Share agribusiness-related credit risks in Nigeria. The body was established in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD) and Nigerian Bankers’ Committee in 2013 with the mandate to stimulate the flow of affordable finance and investments into the agricultural sector.
The ABP which was launched in November 2015 by President Buhari, was designed to provide farm inputs in cash and kind to Small Holder Farmers (SHFs). The programme was intended to create a linkage between Anchor Companies involved in food processing and SHFs of the required key agricultural commodities through the commodity associations. Integrating NIRSAL with ABP was a strategic move to accelerate the development of agriculture in the bid to overtake oil as Nigeria’s main revenue earner.
Nigeria’s agricultural sector contributed 27 percent of the country’s GDP in Q4 2020 while it accounted for 34.66 percent of total employment during the period.
About the Author
Sam Diala is a Bloomberg Certified Financial Journalist with over a decade of experience in reporting Business and Economy. He is Business Editor at THEWILL Newspaper, and believes that work, not wishes, creates wealth.
