Federation Allocation Accounts Committee Deducts N622.75m from Farmers’ Loans
In a move to recover outstanding loans, the Federation Allocation Accounts Committee has deducted a total of N622.75 million from farmers’ loans disbursed under the Anchor Borrowers Programme over a period of 15 months. According to Sunday PUNCH, the deduction was made every month from May 2023 to July 2024, with N45.52 million being deducted each month.
The Anchor Borrowers Programme, established in November 2015, aimed to create economic linkages between small holder farmers and anchors. However, repayment by beneficiaries has been a difficult task, forcing the Central Bank of Nigeria (CBN) to take extra measures. President Bola Tinubu has reportedly directed security agencies to assist the CBN in recovering Anchor Borrowers Programme funds from borrowers.
The CBN has also suspended new loan applications under its intervention programme. CBN Governor, Yemi Cardoso, noted that some of the previous failures of the CBN were tied to quasi-fiscal activities under the foray of "development finance activities". A CBN official stated that the bank is recovering the loans disbursed to increase agricultural inputs.
The programme benefited about 4.67 million farmers involved in maize, rice, or wheat farming. Top beneficiaries of the loan included Kebbi State, Rice Farmers Association of Nigeria, Cotton Producers and Merchant Association of Nigeria, Maize Growers and Processors Association of Nigeria, and Afex Commodities.
Meanwhile, the government has removed N1.014 trillion as a statutory deduction between January and July, an increase of 13.42 per cent or N120.12 billion from N894.77 billion deducted in the corresponding period of 2023. The high amount is primarily due to foreign debt servicing payments made on behalf of state governments, along with various statutory deductions and limits on the amount to be shared each month, impacting funding for other essential services and development initiatives.
The CBN is currently trying to recover funds from borrowers, with a committee tasked to recover the funds. The bank is looking into laid-down procedures between banks and the apex bank to get back the funds.