The Federation Allocation Accounts Committee has reported a total deduction of N622.75 million over a span of 15 months, aimed at repaying loans provided to farmers under the Central Bank of Nigeria’s (CBN) Anchor Borrowers Programme (ABP). Established in November 2015, the ABP was designed to forge economic connections between smallholder farmers and larger commercial entities, known as “anchors,” to promote agricultural productivity. The most recent financial report highlighted that from May 2023 to July 2024, the government deducted an average of N45.52 million monthly from the national revenue, culminating in the aforementioned total. Despite these efforts, the repayment figures remain relatively small when weighed against the enormous N450.90 billion still owed to the CBN as of March 2024, raising concerns about the programme’s sustainability and effectiveness.
The deductions labeled “CBN Anchor Borrowers” were sourced from the nation’s gross revenue without clear indications of which states or groups were specifically impacted. This ambiguity raises questions about the transparency of the repayment process. The abrupt cessation of the Anchor Borrowers Programme by the CBN, following its slow recovery of loan amounts, has further complicated the landscape. The organization now seeks more aggressive methods to reclaim the funds loaned, as the original goal of bolstering agriculture faces potential derailment. Various agricultural cooperatives and associations were intended beneficiaries of the programme, with reports indicating that approximately 4.67 million farmers involved in maize, rice, or wheat cultivation benefitted considerably.
President Bola Tinubu has reportedly stepped in to address the repayment challenges, directing security agencies to assist the CBN in recovering the funds owed by borrowers. This action signals the government’s recognition of the financial strain caused by the delinquency among beneficiaries, necessitating a strategic approach to enforcing compliance and recovery. Concurrently, the CBN has halted new loan applications for the ABP, signaling a reevaluation of their lending practices. The CBN Governor, Yemi Cardoso, acknowledged past missteps associated with quasi-fiscal activities linked to development finance, indicating a desire for reform in the management of such initiatives.
In the preceding months, the Committee noted other significant financial metrics, revealing that the government had executed statutory deductions amounting to N1.014 trillion from January to July, representing a 13.42 percent increase over the N894.77 billion deducted during the same timeframe in 2023. This substantial rise can be attributed primarily to foreign debt servicing payments for state governments, in addition to various statutory allocations that limit our monthly revenue share. As these pressing financial obligations consume a considerable portion of the budget, they inevitably hinder funding for critical public services and developmental projects.
In terms of loan allocation, a CBN document identified key beneficiaries including the Rice Farmers Association of Nigeria, the Cotton Producers and Merchants Association of Nigeria, and other agricultural stakeholders, predominantly in Kebbi State. Despite the scheme’s initial enthusiasm regarding its economic potential, the ongoing struggle to retrieve loans illustrates deep-rooted issues within the implementation of the programme. Stakeholders involved in agricultural sectors, which were summoned to benefit from governmental support, now face the repercussions of these inefficiencies, complicating the financial recovery process.
In conclusion, the challenges surrounding the Anchor Borrowers Programme highlight critical issues of governance, transparency, and financial management within Nigeria’s agricultural financing initiatives. As the government grapples with the repercussions of unpaid loans and the suspension of new loan applications, there is a pressing need for strategic reviews and reforms in fiscal policies to ensure more sustainable financial practices that truly benefit farmers. Without substantive action, both current beneficiaries and broader agricultural development efforts may continue to suffer, highlighting the necessity for a more effective linkage between policy intent and on-the-ground results.
