BoA in N40bn debt deficit – Minister
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has revealed that the Bank of Agriculture (BoA) is too weak structurally to be of any benefit to Nigerian farmers now.
He said the bank is in deficit to the tune of nearly N40 billion in debts.
The debt according to him dates back to twenty years ago and that the federal government is about to start measures to reposition the bank.
“The bank is structurally weak, it is not digitalized, and the management has to be strengthened and right now a programme is in place by the bureau of private enterprise to restructure and re-energies the bank.
“On the bank of agriculture, first the bank of agriculture is in deficit to the tone of nearly N40 billion in debts. Debts dating back 20 years ago. So they are very weak now. We are about to start measure to recover them,” he said.
He however revealed that the process will take about nine months, and this according to him will make bank the biggest in the country servicing the rural areas.
He said the federal government capital in the new bank will be about 20%, while private sector investment and the nearly 25 million farmers in this country will make up the rest.
He explained further that the bank will be operated in the line of the Rambo Bank of Holland and the Credit Agriculture of France.
“These two banks emerged towards the end of the 19th century because commercial banks were doing to farmers what commercial banks are doing to us now. They don’t loan to farmers, when they do, the interest rate are too high. So we are looking for a bank of agriculture strong enough in capital to lean cheaply for farmers.
“We need to give funds cheaply to people to farm, especially because we are asking the younger people in this country to get in to agric. The current interest rate regime can not sustain agriculture and that is where we are heading.
“The processes are slow but the CBN is working on it because the president is pushing and the Vice president is working on it and we expect investors like PENCOM, the new Nigeria development bank, foreign development banks and the World Banks as well will invest in this project but we can tell you that agriculture is on its way to the height where it was in the pass,” he said.
On the Growth Enhancement Scheme (GES), Ogbeh said the federal government not going with the GES because large part of the money owned the agro-dealers is from the state.
Many of the state according to the minister, relayed on what they owned on the ground that it was a transaction by the previous government and that their revenue are so low and they can’t afford the luxury of subsidy on fertilizer and inputs to farmers.
Saying the arrears that are being paid now was out of sympathy and responsibility towards the agro dealers, adding that: “We had to look for money from our own sources at the federal level to bear the liabilities of seeds.”
“At any rate the cost of the GES is such and the finances of this country are so lean now that GES is a luxury we may not continue with. We are working toward reducing interest rate to about 5% in agriculture. If we succeed in developing an agric fund to the level that we want to do in partnership with the central bank. Once we do, farmers will have to find their inputs on their own. We cannot afford the GES at this cost, and certainly not under this scandal,” he lamented.
The Minister of Agriculture and Rural Development, Chief Audu Ogbeh, has revealed that the Bank of Agriculture (BoA) is too weak structurally to be of any benefit to Nigerian farmers now.
He said the bank is in deficit to the tune of nearly N40 billion in debts.
The debt according to him dates back to twenty years ago and that the federal government is about to start measures to reposition the bank.
“The bank is structurally weak, it is not digitalized, and the management has to be strengthened and right now a programme is in place by the bureau of private enterprise to restructure and re-energies the bank.
“On the bank of agriculture, first the bank of agriculture is in deficit to the tone of nearly N40 billion in debts. Debts dating back 20 years ago. So they are very weak now. We are about to start measure to recover them,” he said.
He however revealed that the process will take about nine months, and this according to him will make bank the biggest in the country servicing the rural areas.
He said the federal government capital in the new bank will be about 20%, while private sector investment and the nearly 25 million farmers in this country will make up the rest.
He explained further that the bank will be operated in the line of the Rambo Bank of Holland and the Credit Agriculture of France.
“These two banks emerged towards the end of the 19th century because commercial banks were doing to farmers what commercial banks are doing to us now. They don’t loan to farmers, when they do, the interest rate are too high. So we are looking for a bank of agriculture strong enough in capital to lean cheaply for farmers.
“We need to give funds cheaply to people to farm, especially because we are asking the younger people in this country to get in to agric. The current interest rate regime can not sustain agriculture and that is where we are heading.
“The processes are slow but the CBN is working on it because the president is pushing and the Vice president is working on it and we expect investors like PENCOM, the new Nigeria development bank, foreign development banks and the World Banks as well will invest in this project but we can tell you that agriculture is on its way to the height where it was in the pass,” he said.
On the Growth Enhancement Scheme (GES), Ogbeh said the federal government not going with the GES because large part of the money owned the agro-dealers is from the state.
Many of the state according to the minister, relayed on what they owned on the ground that it was a transaction by the previous government and that their revenue are so low and they can’t afford the luxury of subsidy on fertilizer and inputs to farmers.
Saying the arrears that are being paid now was out of sympathy and responsibility towards the agro dealers, adding that: “We had to look for money from our own sources at the federal level to bear the liabilities of seeds.”
“At any rate the cost of the GES is such and the finances of this country are so lean now that GES is a luxury we may not continue with. We are working toward reducing interest rate to about 5% in agriculture. If we succeed in developing an agric fund to the level that we want to do in partnership with the central bank. Once we do, farmers will have to find their inputs on their own. We cannot afford the GES at this cost, and certainly not under this scandal,” he lamented.
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