In a race against time, the Federal Government of Nigeria is facing a mounting challenge as it endeavors to recover outstanding loans from farmers participating in the ambitious Anchor Borrowers’ Programme (ABP). The ABP, initiated by the Central Bank of Nigeria (CBN), was designed to infuse much-needed funds into Nigeria’s agricultural sector, boosting production across the nation.
While there have been notable successes in certain regions, the program has encountered obstacles due to some beneficiaries’ inability to repay their loans upon maturity. Additionally, allegations have arisen of officials entrusted with disbursing funds and agricultural inputs diverting them for personal gain.
To date, the CBN has disbursed over N1.1 trillion to ABP beneficiaries, but only slightly more than N546 billion has been repaid. President Tinubu has issued a directive aimed at recovering over N577 billion from defaulting farmers and officials responsible for misappropriating the funds.
At the program’s outset, hundreds of rice farmers were registered through their respective associations and provided loans in the form of agricultural inputs, including seeds, agrochemicals, and fertilizers. These loans were expected to be repaid either in cash or through paddy rice at the end of the farming season.
However, retrieving these loans from the farmers has proven to be a significant challenge for the apex bank, as previous efforts to recover the funds through their associations yielded limited results.
In the latest move to recoup the loans, the federal government directed the Rice Farmers Association of Nigeria (RIFAN) to collaborate with security agencies, including the Department of State Services (DSS), NSCDC, and the police, to recover the loans distributed during the 2018, 2019, 2020, and 2021 cropping seasons.
According to a circular dated August 30, 2023, issued by RIFAN, all state chapters of the association were instructed to cooperate with security forces in the recovery effort. Farmers were directed to make payments into a designated bank account, with copies of the deposit slips sent to the national office of the association. However, despite this directive, reports indicate that substantial recoveries have not yet been achieved.
One of the challenges impeding loan recovery, as explained by Malam Ado Hassan, the RIFAN Deputy Secretary-General in Kano State, is the impact of natural disasters and the COVID-19 pandemic. He noted that despite insurance coverage from the National Agricultural Insurance Company (NAIC), affected farmers could not access adequate compensation for their losses due to flooding. Farmers had paid significant premiums, but NAIC paid less than 40% of the losses, according to Hassan.
Hassan further revealed that CBN promised to re-issue inputs to affected farmers to help them recover after the flooding but had yet to fulfill that commitment.
Additionally, he mentioned that various recovery attempts, including involving traditional leaders and customary courts, had been unsuccessful in compelling farmers to repay their loans.
On a concerning note, a rice farmer in Kano, Alhaji Ahmadu Usman, argued that the anchor borrower loans remained unrecovered because they were not distributed to genuine farmers. According to Usman, the program had been misused for political purposes, with the money channeled to political allies rather than genuine farmers who were actively engaged in rice cultivation.
It’s worth noting that in 2020, Kano State’s anti-graft agency received a petition alleging fraud within the state’s RIFAN leadership, amounting to N10 billion. The subsequent investigation led to the arrest and detention of association leaders, although RIFAN maintained that the funds were disbursed to farmers who had suffered losses due to flooding.
With just three days left to the deadline, the government faces an uphill battle to recover the outstanding loans from farmers, and the program’s future remains uncertain amidst these challenges.
