Bank of Agriculture - BoA

The Federal Government says it will finalise the recapitalisation of the Bank of Agriculture (BoA) in 90 days, in collaboration with the Bureau of Public Enterprise.

Chief Audu Ogbeh, the Minister of Agriculture and Rural Development, said this at the kick-off meeting for the recapitalisation of the bank on Tuesday in Abuja.

The minister said that it was an opportunity for farmers to become owners of the Bank.

Ogbeh expressed worry over the inability of some high profile borrowers to repay loans borrowed from the Bank, noting that the ministry would support the Bank to minimise failures.

The minister noted that the recapitalisation would be done with an estimated N250 billion.

“We are bringing into life that which we hope and believe will make the BoA a strong element, to make our agriculture sector stronger.

“We have a new vision for agriculture, we want to create a farmers’ bank and this is the chance for farmers to become owners of the bank.

“This will give the bank a chance of becoming a large bank in future just like the one in China and the Rabobank of the Netherlands.

“Today, the Rabobank accounts for 75 per cent of all the credit given to banks in the European Union and they lend at three and half per cent but the bigger one is in China with nearly eight million clients.

“I don’t see why we can’t do the same here,’’ Ogbeh said.

Speaking on modalities for the recapitalisation, Mr Alex Okoh, Director General, Bureau of Public Enterprises (BPE), said the bank had performed sub-optimally due to the myriad of challenges it faced since inception in 1972.

According to him, it has become imperative to restructure the bank to substantially improve its operating framework and governance structure with a view to enhancing its efficiency.

Okoh said that farmers would be encouraged to form cooperative societies to facilitate and guarantee loans repayment and achieve noticeable impact.

According to him, the process will lead to the privitisation 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.

“That makes it a private sector bank.

“This 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,’’ the director-general explained.

A contract was signed between the BPE and the Lead Capital Consortium for the commencement of the recapitalisation.

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