BY EMEKA EJERE
The Central Bank of Nigeria (CBN) is intensifying efforts at ensuring that the nation reaps the full benefit of the federal government’s Anchor Borrower’s Programme (ABP). Last week, the CBN ordered the suspension of all facilities under the scheme domiciled at the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL).
The move, which the apex bank said was in line with its stock-taking process to monitor the intervention programmes, is widely is expected to save over two million jobs and about N200 billion projects nationwide.
The programme, which began in 2015 and aimed at financing production of rice, maize, cassava among other crops for increased local consumption and commercial purposes, is an initiative of the federal government through the CBN to revolutionize agriculture and boost non-oil revenue.
Over two million jobs have been created under the ABP since inception, 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.
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 programme 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.
‘A routine process’
The Acting Director, Corporate Communications at CBN, Osita Nwanisobi, told a national newspaper 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.
Nwanisobi said, “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.”
Head of Corporate Communications, NIRSAL, Anne Ihugba, in the establishment’s response entitled, ‘NIRSAL Plc and the CBN’s Anchor Borrowers’ Programme: The incontrovertible facts beyond baseless fictions’ seen by BusinessHallmark, debunking the allegation of corruption against NIRSAL’s leadership.
The statement read in part, “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 statement, however, revealed that the CBN ordered ‘a stop’ to the ABP facilities to scrutinize a huge backlog of un-repaid 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 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 programme 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, said on point of anonymity.
Speaking in Kebbi State last month on the fifth anniversary of the scheme, the CBN governor, Mr. Godwin Emefiele stated that the Anchor Borrowers Programme is part of President Muhammadu Buhari’s initiative to spearhead the diversification of the Nigerian economy by improving the output of rural farmers.
Highlighting the successes of the initiative since inception, Mr. Emefiele stated that 2,923,937 farmers have benefitted from the programme; 3,647,643 hectares have been cultivated by farmers under the programme; 21 commodity sectors benefited from the programme. He also recalled that in the 2020 wet season, banks under the CBN-RIFAN partnership financed 221,450 farmers for the cultivation of 221,450 hectares in 32 States.
Hindered by protocols
However, a survey by The Guardian has revealed that late release of agricultural inputs and long protocol required to access loans under the ABP are major factors for poor performance of the scheme in the Southeastern region of the country.
According to the survey conducted in the five Southeast states of Enugu, Imo, Abia, Anambra and Ebonyi, the farmers blame some of the setbacks on the CBN even as the apex bank blames farmers and their local facilitators for the woes.
Farmers accuse operators of the scheme of continual miscalculation regarding the appropriate farming season for different crops grown in the region as against those grown in the north.
It was observed in Enugu State that some farmers have carried on with the programme despite challenges while others pulled out completely, citing inability to “continue to invest without profits.”
Mr. Ikechukwu Nneji, the Cluster Chairman for Akpugo Multi-Purpose Cooperative, said that the cassava farm his group cultivated last year did not yield any dividend, following frustrations suffered in the hands of the implementers of the programme. He stated that aside attacks by pests, they had to grapple with late arrival of inputs and fire outbreak that destroyed their farms.
The group, according to him, received over N20 million, with each of the 91 members of the cooperative collecting N220,000. He explained, however, that apart from the N20,000 cash released for weeding of the farm, the rest of the money was converted into inputs supplied directly by the managers of the scheme.