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Nigeria: 3 Days to Deadline, Govt Yet to Recover Anchor Borrower Loans From Farmers

Three days to the deadline given by President Bola Tinubu, federal government agencies in collaboration with law enforcement operatives are struggling to recover billions of naira given to rice farmers as loans since 2018.

Recall that President Bola Tinubu had given up to Monday, September 18, for the recovery of the funds.

The ambitious Anchor Borrowers’ Programme (ABP) was floated by the Central Bank of Nigeria (CBN) to make cash available for increased agricultural production in Nigeria.

While successes have been recorded in some places across the country, the programme ran into a glitch due to the inability of some of the beneficiaries to repay the loan on maturity.

There are also allegations that some officials who were saddled with the responsibility for dispensing the monies and farm inputs diverted them.

It was learnt that over N1.1 trillion was disbursed by the CBN to the beneficiaries of the ABP since its inception, but only a little above N546 billion was repaid.

With the directive by President Tinubu, it is expected that over N577 billion would be recovered from defaulting farmers and officials who diverted the money.

At the inception of the programme, hundreds of rice farmers were captured through their registered associations and were given loan in form of inputs, which includes seeds, agro chemicals, fertilisers, among others.

They were expected to repay the loan at the end of the farming season either in cash or by paddy rice.

However, recovering the loans from the farmers have been the major issue to the apex bank, as all efforts to retrieve the money through their association had yielded little result.

Latest move to recover loans

In an effort to recover the loans, the federal government directed the Rice Farmers Association of Nigeria (RIFAN) to do everything possible to get the money given out during the 2018, 2019, 2020 and 2021 cropping season.

The association was instructed to work with the Department of State Services (DSS), NSCDC, the police and other relevant security agencies to recover the loan.

Based on the directive, RIFAN in a circular dated August 30, 2023, seen by Daily Trust, directed all the state chapters of the association to work with the security operatives to recover the loan. The circular signed by the President of the association, Aminu Muhammad Goronyo, and the National Secretary, Livinus Ngwangwa, directed the farmers to pay into a designated bank account with the copies of the tellers sent back to the national office of the association. But since the directive, Daily Trust reports that not much has been recovered from the defaulting farmers from the states.

Why it is difficult to recover the loans

The RIFAN Deputy Secretary General in Kano State, Malam Ado Hassan, has given out a number of reasons why recovering the anchor borrower loan is proving difficult.

He said the state collected about N12 billion from 2017 to 2020, adding that the recovery level is less than 30 per cent.

According to him, during the 2018 wet season, 44, 807 farmers were captured as beneficiaries, and in that same year, the state witnessed a terrible flooding that washed away a vast rice plantation and that in 2019, COVID-19 pandemic worsen the situation for not only rice farmers but for all business across the globe.

He lamented that despite insurance cover from the National Agricultural Insurance Company (NAIC), affected farmers couldn’t access compensation from NAIC despite incurring huge losses due to the flooding, even though the incident was reported, inspected and evaluated by both CBN and NAIC officials.

“Farmers had paid over N100 million premium and NAIC paid not up to 40%, which is very bad. And nothing was done, to make it worse, CBN agreed to re-issue inputs to 29,080 farmers for them to go back to farm and be able to repay their loans after the flooding, but up till this moment, CBN didn’t give them anything,” he said.

Daily Trust had made efforts to hear from NAIC, but the spokesperson of the agency said they were not aware of any complaint.

The Kano State RIFAN deputy secretary general further stated that they have devised several recovery attempts through the use of traditional leaders, customary courts and other methodologies but to no avail as farmers could not repay the loans.

‘Loan given to wrong farmers’

However, a rice farmer in Kano, Alhaji Ahmadu Usman stated that the anchor borrower loan could not be recovered because it was not given to real farmers.

According to him, the whole programme was abused by turning it into a political affair with the money shared to political allies.

“It is not possible to recover the loans because real farmers have not benefited from it. Go to where rice is being produced; you will still see farmers there doing what they know best. These are the real farmers that have been using their sweat to grow rice. Let anyone that has taken the loan pay, that’s all,” he said. It could be recalled that in 2020, the Kano State anti-graft agency received a petition from farmers that there was fraud in the leadership of the state RIFAN to the tune of N10 billion.

The commission in the process of investigation had arrested and detained leaders of the association for the alleged infraction.

However, RIFAN leadership maintained that the funds were not diverted but given to farmers who lost their fortunes to flooding that year.

Outcry in Niger

Many farmers in Niger State said they have been battling in courts over loans given to them under the federal government’s ABP. The farmers, who spoke with Daily Trust, said RIFAN took them to courts for inability to offset the debts.

One of the farmers, Tauheed Dwale, said, “We are paying gradually in court. In my village, they gave individual farmers inputs like fertilisers, knapsacks, chemicals and water pumping machines at the cost of N200, 000 each. Though not all farmers get knapsacks and water pumping machines as they earlier told us, we are paying for it.”

Dwale said the perennial flooding since 2018 had made it difficult for farmers to offset the debts leading to battles in courts.

Another farmer, Ibrahim Mohammed from Edozhigi, one of the major rice farming communities in Niger State, said most of them had paid off their loans.

“Most of us have paid back the loans despite the challenges of flooding. The payments were done in cash in courts because RIFAN took us to courts and we have evidence of payment. We were given receipts after payment,” he said. Some farmers who still battle in courts with loan facilities told Daily Trust that their inability to pay back the loans was giving them sleepless nights because of threats by the loan facilities to jail them.

Also speaking, Umar Mohammed told Daily Trust they were yet to pay the loans because of excess interest charges by RIFAN officials.

“We have not paid because after we had taken the loans, RIFAN told us that we were going to give back nine bags of paddy rice of 100kg. They gave us chemicals and seedlings while some people got knapsacks. When we calculated the cost of what we were given, it wasn’t up to half of the cost of nine bags of rice we were asked to pay back. Some people had been going to court over that loan,” he said.

We were short-changed, Taraba farmers

Rice farmers in Taraba State have said the process of the loan recovery was a rip off because they were short-changed. One of the beneficiaries, Yakubu Adamu alleged that some officials of RIFAN bought the farm inputs from farmers at a distribution point at a giveaway price. He said only a few of the beneficiaries did not sell the inputs given to them.

According to him, the total cost of the farm inputs given to them was N120, 000 but officials bought the inputs at N30, 000.

He further said that their account number and BVN number were collected by the association and taken to the banks under the arrangements that money will be sent to them as part of the loan.

According to him, the banks involved in the disbursement of the loan sent a credit alert of N160, 000 but the banks immediately after sending the alert withheld the money and the supposed beneficiaries could not withdraw it.

He said apart from the three bags of paddy rice provided by the beneficiaries as part of conditions to receive the loan, only few farmers provided additional three bags of the rice for repayment of the loan.

Another beneficiary, Suleiman Dauda, blamed officials of RIFAN for short-changing them.

He said farmers received only farm inputs including water pumping machines and rice seeds without cash, and that the inputs were also bought at a giveaway price by some officials of the association.

An official of the association, who will not like his name mentioned, said the only amount released to farmers in Taraba State as loan under rice farming was N3billion and much was paid through paddy rice by the beneficiaries.

Chairman of RIFAN, Taraba State branch, Tanko Bobbo Andami could not be reached for comment over the issue as all his lines were switched off when our reporter called him.

At the national level, several efforts to reach out to chairman, Muhammad Goronyo were not successful as he did not pick his calls or respond to a text message.

Heads may roll at the centre

Daily Trust learnt from insider sources that the Special Investigator appointed by President Tinubu and his support team are set to commence quizzing of officials involved in the alleged sharp practices at the CBN and related entities, including the ABP.

Following the sacking and subsequent arrest of CBN governor, Godwin Emiefele, Tinubu appointed Jim Obazee as a Special Investigator to probe the activities of the apex bank and its subsidiaries.

Prior to his appointment, Obazee was the Chief Executive Officer of the Financial Reporting Council of Nigeria (FRCN) until 2017. His job was with immediate effect even as he was asked to report directly to the president.

The Inspector General of Police had on September 6 deployed a four-man team of senior officers to support the Special Investigator.

It was gathered that preliminary findings based on developed intelligence by the investigating team led by DCP Eloho are already causing sleepless nights to the top management at the CBN and NIRSAL.

“The investigators are also set to unravel how the Anchor Borrowers Funds were being kept as fixed deposits by parties close to the embattled CBN governor. This scheme was to allow parties involved to scoop the interest on these deposits.

“This development led to a significant delay in the delivery of fertilisers and other inputs to farmers, and by the time the inputs were eventually supplied to the farmers, the planting season would have been over even as they (farmers) were expected to pay for the unsupplied inputs,” a source told Daily Trust.

Another source confided in Daily Trust that among those involved in the fixed deposits racket is an aide to the ex-CBN governor (names withheld) who is said to have operated a total of 61 bank accounts that included 44 fixed deposit accounts and 2 treasury bills accounts.

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