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Business Hilights has stumbled on details why the federal government had been silent in using the Bank of Agriculture (BoA) to drive its fledging agro revolution.
The present administration had since inception, been driving massive public and private sector investments in commercial farming which had recorded observable feats including the launch of Lake Rice; a product of Lagos and Kebbi State governments’ partnership.
Another feat includes the ongoing local rice production in not less than 14 states of the federation powered not by BoA, but the Central Bank of Nigeria (CBN).
Only two weeks ago, the Minister of Agriculture and Rural Development, Chief Audu Ogheh, inaugurated the first shipment of Nigerian yam to Europe.
However, why the government decided to do away with BoA and went ahead with the apex bank cannot be too far from a N40 billion deficit that accumulated through a catalogue of non-performing loans (NPLs) dating back to 20 years.
The debt dates back to two decades ago and the inability to bounce back structurally weakened the now moribund financial instruction of the federal government.
Trouble had started for BoA which came on board in 1972 to provide credit and technical support to farming projects, when it lent about N41 billion to 600 businesses across Nigeria in over 10 years and failed to recover a substantial amount.
In 2016, the federal government moved to revive the bank and inaugurated a 21-man Steering Committee to restructure and recapitalise BoA to enable it to attract up to N1 trillion ($3.2 billion) to effectively provide loans for farmers at affordable interest rates.
Ogbeh was open on the, saying BoA was too weak structurally to be of any benefit to Nigerian farmers at present.
Business Hilights gathered that BoA by the Act establishing it is saddled with the mandate of providing low cost credit to small holder commercial farmers, including small and medium rural enterprises.
By design in 1972, BoA was structured to provide micro financing to small and medium scale non-agricultural enterprises with the aim of ensuring effective delivery of agricultural and rural financing services on a sustainable basis to support the national economic development agenda, including food security, poverty reduction, employment generation and reduction in rural to urban migration. Its activity was also expected to naturally help Nigeria become less dependent on imported food items, and increase in foreign exchange earnings.