The Central Bank of Nigeria (CBN) is overreaching its mandate by administering loans directly to farmers through the Anchor Borrowers Programme (ABP), a senator has said.
The situation is made worse by the failure of the CBN to play its constitutional role of recapitalising the bank of agriculture which is now virtually in distress, Abdullahi Adamu said on Saturday.
Mr Adamu, who is the Chairman of the Senate Committee on Agriculture, restated the need for the CBN to hand over the administration of the ABP and other agricultural programmes.
In an interview with the News Agency of Nigeria (NAN), in Abuja, he urged the CBN to hand over agricultural programmes to the Ministry of Agriculture and Rural Development (FMARD).
The senator said it was high time CBN allowed FMARD to carry out its mandate through the various agencies under it, adding that the mandate of the apex bank was to act as a referee or monitor financial transactions and not taking over the function of any ministry.
The former Nasarawa governor, himself a commercial farmer, said the agency of government that has the mandate for the promotion of agricultural production generally is domiciled in the Ministry of Agriculture while the Bank of Agriculture (BoA) should handle loans to farmers.
“It (BoA) is supposed to be the agency through which financing of agricultural loans and other facilities to empower farmers of various categories to benefit and get necessary funding be domiciled.
“The Bank of Agriculture is better placed like the Bank of Industry (BOI) as development banks to take responsibility in administering money from government that is aimed at promoting agricultural production in the country.
“The Central Bank has no mandate for agriculture. Where they have these funds, the best thing to do is to give it to the ministry of agriculture to manage, because some of these out-grower programmes we are talking about, their cost to the government is more than the budget of the federal ministry of agriculture itself.”
The senator emphasised that a programme like the ABP, currently domiciled in the CBN, was a mismatch, adding that it fell within the purview of the BOA.
PREMIUM TIMES reported how the CBN, through the ABP and working with farmers’ associations and state governments, gives loans to farmers with the aim of improving local production of major food items like rice and cassava. The programme has been credited for the increase in local rice production in many states.
Mr Adamu, however, argued that considering the huge expenditure of the ABP, as well as its focus, it should have been transferred to the BoA.
Distressed BoA
The senator said while there was no doubt that the BOA was in distress, rather than CBN usurping its mandate, efforts should be made at recapitalising it to be better positioned to carry out its mandate.
“The Anchor Borrowers Programme for example, if you check how much money has gone in there as from 2016, 2017 to date, you will find out that the money is over and above, about four times the budget provision for ministry of agric in its entirety.
“I believe that it is not within the mandate of the Central Bank of Nigeria as the apex and monitoring bank to get involved with loan facilities because they are the referee in financial sector.
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