BPE says Restructuring BOA Sacrosanct
The Bureau of Public Enterprises (BPE) says the restructuring Bank of Agriculture (BOA) has become imperative to substantially improve its operating framework and governance structure with a view to enhancing its efficiency.
Speaking at the kick-off meeting for the recapitalization of the Bank on Tuesday, April 16, 2019, in Abuja, Okoh said the Bank had performed sub-optimally due to the myriad of challenges it faced since inception in 1972.
According to him, “the process will lead to the privatization of equity of the bank. We envisage that the Central Bank equity will be reduced to 20 per cent, Federal Ministry of Finance (incorporated) will be reduced to 20 per cent. The government agencies equity in the new bank will be a minority of 40 per cent. We will then invite private sector investors who will own 20 per cent and the remaining 40 per cent equity will be owned by farmers and farmers’ cooperatives”.
Okoh stated that the new strategy envisages that BoA will be transformed into a truly agriculture finance bank modeled along the lines of Agriculture Bank of China and Rabobank of the Netherlands, adding that upon its establishment in 1972 to serve as an agricultural and cooperative bank to provide services of a development finance institution, it was vested with the responsibility of providing low cost credit to small holder and commercial farmers.
He, however, lamented that the Bank had been unable to realize its responsibilities due to its current structure, stressing that the proposed restructuring and recapitalization of the Bank seek to transform it strictly into an agricultural finance bank with functional branches in all the local government areas and major towns in Nigeria.
The Director General said that the model was sure to encourage farmers to form clusters of cooperatives and thrift societies throughout the six geo-political zones for the purpose of participating in the ownership of the Bank.
Okoh added that the model would fundamentally ensure that the BOA becomes a farmers’ bank owned by farmers.
On the sustainability of the strategy and attracting investment, the DG, BPE explained that measures would be put in place to take non-performing credit facilities off the balance sheet and books of the Bank and possibly sold off to a factor agent. He said further that the measure is to make the Bank attractive to investors and attract cheap funding from multilateral development institutions and other institutional investors with a focus on agricultural financing.
Okoh commended the Minister of Agriculture & Rural Development, Chief Audu Ogbeh who doubles as the Chairman of the Steering Committee for the Project for his passion and commitment to the development of agriculture in Nigeria.
He congratulated Lead Consortium-the Adviser for transaction and said that upon conclusion, BoA would be placed on a platform to optimise its potential to make positive impacts on the nation’s natural endowments for arable farming.