…ABP marred by low loan recovery – stakeholders

…Anxiety as recovery deadline elapses

The Jim Obazee-led special investigative panel constituted by President Bola Tinubu in July to probe and reset the Central Bank of Nigeria (CBN) has extended its dragnet to companies and establishments owned by top shots at the apex bank including its board members.

While the companies were kept under wraps as investigations deepen, Daily Sun, gathered that some of them were believed to be used as conduits for anchor borrowers’ loans and foreign exchange rackets; as there are no commensurate investments on ground to justify the hefty facilities expended.

Consequently, cronies of CBN top shots are panic-mode as investigators and security operatives pick them up one after the other for questioning.

“Let us get something clear. This is not a witch-hunt. It’s a call to service to restore the dignity of the apex bank and we are leaving no stones unturned to do a thorough job. There are no sacred cows or sacrificial lambs.

There are issues around anchor borrowers’ facilities. Billions of naira has been disbursed but there are no rice paddies to repay. Where did the money go? What happened?

“There are also issues around foreign exchange round-tripping we are investigating. There is acute dollar scarcity. What really went wrong? Who are those responsible?

“So, as we dig in, if it concerns you, you will be invited. The DSS is also working with the panel. The goal is mutual”, a source told Daily Sun.

The anchor borrowers’ loans, in which over N1.1 trillion, were facilitated by the sacked CBN management who the investigators believed made little efforts to recover.

Out of the N1.1 trillion disbursed by the CBN to the beneficiaries of the ABP since its inception, only a little above N546 billion was repaid.

The development irked President Tinubu, who has directed that the outstanding N577 billion be recovered from defaulting farmers and CBN officials and their cronies who allegedly diverted the funds to some other private ventures be recovered.

The presidential deadline for the loan recovery elapses today Monday (September 18) and tension is high as no one knows the next line of action of the presidency.

Some genuine farmers who got a slice of the anchor borrowers’ facility but could not repay listed floods and the shutdowns associated with the COVID-19 pandemic as reasons for defaulting.

This is aside the allegations of funds’ diversion by officials of CBN and other participating stakeholders who politicised an initiative designed to solve Nigerians’ food insufficiency nightmare.

Currently, the Rice Farmers Association of Nigeria (RIFAN), in collaboration with security agencies, is racing against time to recover anchor loans disbursed to its members during the 2018, 2019, 2020 and 2021 cropping season.

RIFAN President, Aminu Muhammad Goronyo, and the National Secretary, Livinus Ngwangwa, via a memo directed the farmers to pay into a designated bank account; though success in this regard has not been robust.

Meanwhile, economic and financial experts have described last week’s sack of the CBN’s management by President Tinubu as a welcome development meant to remodel the apex bank and wean it off undue political encumbrances.

They have also warned the incoming CBN Governor, Dr Yemi Cardoso and his deputies to live above board and avoid infractions committed by the sacked CBN management headed by Mr Godwin Emefiele.

The Chief Executive Officer, Centre for the Promotion of Private Enterprises (CPPE), Dr Muda Yusuf in a conversation with Sunday Sun, said the shake-up at the CBN did not come as a surprise.

“Indeed, President Tinubu hinted during his inaugural speech that the CBN needed a thorough house cleaning. That is what is playing out now.

Under the previous CBN leadership, there were serious issues around the transparency of foreign exchange management as well as the intervention funds of the CBN.

“The failure of the CBN to publish audited accounts for six years was also a major breach of corporate governance values and the CBN Act”, Yusuf stated.

He added Cardoso was eminently qualified for the position of the CBN Governor judging by his rich academic, intellectual and industry credentials.

Also commenting on the development, Nigeria’s first professor of the capital market, Prof Uche Uwaleke, said the constitution of a new management was in order.

“It’s a welcome development and Dr Cardoso is eminently qualified to head the CBN.

“The CBN is too sensitive an Institution to allow a Chief Executive function in an acting capacity for a long period.

A substantive CBN Governor sends the right signals to financial markets”, he told Sunday Sun.

Cardoso’s appointment came after Emefiele was suspended and docked.

President Tinubu appointed Mr Folashodun Shonubi to act as the apex bank chief.

However, President Tinubu, in late July, constituted a special panel headed by Jim Obazee to investigate the apex bank over unethical issues.

The panel has since swung into action and has reportedly interrogated the deputy governors of the apex bank who worked with Emefiele.

With the shake-up, all the deputy governors of the CBN have been replaced with Mrs. Emem Usoro, Muhammad Dattijo, Philip Ikeazor, and Dr. Bala M. Bello.

They are currently awaiting senate’s clearance.

Meanwhile, some stakeholders have decried the low recovery of loans granted some farmers under the Anchor Borrowers Programme (ABP).

The News Agency of Nigeria (NAN) reports that at inception in November 2015, the ABP was designed by the CBN to provide farm inputs in kind and cash to smallholder farmers.

The aim was to boost production of food commodities, stabilise inputs supply to agro-processors and address the country’s negative balance of payments on food.

By 2022, the apex bank revealed that at least 4.8 million farmers had benefitted from the programme.

But the programme has been marred by loan default, even as food prices rose significantly within the years it took effect.

According to the International Monetary Fund (IMF), 76 per cent of the loans collected by beneficiaries were yet to be repaid.

The IMF said that agricultural credit in the country had not succeeded in increasing production due to the difficulty in reaching the targeted farmers.

It said that although the CBN allowed farmers to pay in cash or give the central bank produce of the same value under the ABP, repayments had been very low.

“For the Anchor Borrowing Programme, repayment is also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.

“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted and occasionally the funding is used for other purchases,” it said.

Various farmers associations also said that the loans were not disbursed adequately, hence the difficulty in ensuring repayment.

Yunusa Yabwa, the National Secretary of All Farmers Association of Nigeria (AFAN), said that the ABP was abused, adding that it did not meet expectations to boost food production.

He said that most beneficiaries of the programme were not farmers.

“Many people collected the loan to invest in other projects, not farming, and that is why it is difficult to ensure repayment.

“The ABP is a laudable programme, but there are challenges of recovery.

” Some of our members benefited from it, but most people that benefited are not farmers,” he said.

Dr. Abdulmumin Isa, CBN’s Director, Corporate Communications Department, said that the apex bank had released N1.08 trillion, as at February, out of which N960 billion was due for repayment.

Isa saud that ABP had supported about 4.57 million smallholder farmers who cultivated more than 6.02 million hectares of 21 commodities across the country.

NAN reports that the ABP guidelines stipulate that upon harvest, benefiting farmers are to repay their loans with produce, which must cover the loan principal and interest to an anchor, who pays the cash equivalent to the farmer’s account.

However, default payments have continued to trail the programme as more than 50 per cent loan remained unpaid. (NAN)

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