FG Cracks Down on Bank of Agriculture Debtors, Moves to Recover $20 Billion

• The Nigerian government is gearing up to recover over $20 billion owed to the Bank of Agriculture (BOA).
• The Bank of Agriculture’s managing director and chief executive, Ayo Sotinrin, disclosed this at a press briefing
• He stated that the $20 billion loan recovery plan is part of a larger strategy to raise N1 trillion in recapitalisation for the bank

Legit.ng’s Pascal Oparada has reported on tech, energy, stocks, investment and the economy for over a decade.

The Nigerian government, through the Bank of Agriculture (BOA), is getting ready to recover over $20 billion in debt owed to the bank, as it reaffirmed its commitment to the bank’s N1 trillion recapitalisation target.

The development was unveiled by the bank’s new managing director/chief executive, Ayo Sotinrin, at a news briefing at the National Youth Dialogue on Inclusive Food Systems by Action Aid Nigeria in collaboration with the Nigerian Senate and GIZ in Abuja.

FG launches Operation Recover All for debts

Sotinrin disclosed that the bank is launching Operation Recover All to ask debtors to repay their loans, stating that the financial institution is sending out letters to everyone owing the bank and appealing to them to repay.

He said that debtors would be eligible for new facilities if they repay the old debts, stating that the ongoing efforts to recover the debts are part of a larger plan to recapitalise the bank and give it a new lease of life.

The new BOA boss reaffirmed President Bola Tinubu’s plan to inject fresh funds into the bank, proposing N1.5 trillion, about $1 billion in recapitalisation funds.

BOA's role in agricultural development

The Bank of Agriculture (BOA) is Nigeria’s main financial institution focused on helping farmers and rural communities grow. It was set up in 1973 and is based in Kaduna.

The bank has more than 110 branches all over Nigeria, offering loans and financial support to farmers and small agricultural businesses.

Some of its loan programs include microcredit and the Grow and Earn More (GEM) scheme, designed to help farmers increase their income.

However, BOA faces problems like not having enough funds, many loans not being repaid, and old equipment. To fix these issues, new leaders are working to modernise the bank by using digital tools and data to improve services.

They are also focusing on improving key agricultural products like cocoa and ginger. For Nigeria to boost farming and ensure enough food for everyone, strong banks like BOA are very important.

With proper changes and funding, BOA can play a big role in Nigeria’s farming future.

BOA to raise international capital

He also mulled the idea of raising international capital, saying that the bank intends to do a few more things to cover a lot of value chains in the sector.

According to him, the bank’s focus is on rural agriculture finance to support 40 to 70 million farmers nationwide, promoting agriculture as a business rather than as a way of life.

By increasing the yield from one ton per hectare to nine tons, the bank hopes to solve the food crisis and reduce inflation in Nigeria.

Bank to sanction defaulters

BusinessDay reports that the bank also plans to digitise its operations, allowing faster access to capital for farmers and other stakeholders.

Sotinrin stressed that enforcement action will follow after appealing to debtors, with sanctions for those who fail to meet their payment deadlines.

The $20 billion debt is essential to the bank’s recapitalisation and revitalisation plans, the CEO said.

“With the support of the Federal Government, the bank is optimistic about achieving its goals and becoming a key player in Nigeria’s agricultural development”, he said.

FG orders security agencies to recover loans

The development follows a similar action by the Nigerian government, mandating security agencies to recover the loans under the Anchor Borrower Scheme.

The scheme, which was promoted by the Central Bank of Nigeria (CBN) to give access to cash for enhanced agricultural production in Nigeria, went into a ditch as beneficiaries refused to repay the loan on the maturity date.

Reports say that out of the N1.1 trillion disbursed by the CBN to beneficiaries, only about N546 billion has been repaid, leaving a whopping balance of N577 billion

The beneficiaries hold up a vast amount, including commercial and microfinance banks, state governments, farmers’ associations, individuals, and other corporate organisations.

AMCON to publish list of Nigerian debtors

Legit.ng previously reported that Nigeria's Asset Management Corporation said it has taken the drastic step of naming and shaming individuals, corporate organisations, institutions and directors on its non-performing loans list.

Senate committee chairman on banking, insurance and other financial institutions, Senator Uba Sani, had told AMCON to publish the names of all debtors, including Nigerians in high places, frustrating the effort of the assets recovery organisation.

AMCON gave the defaulters 30 days to come up with a repayment plan or risk the embarrassment of seeing their names published in the media.

Source: Legit.ng