‘Faulty intervention’s structure responsible for ABP’s failure’
The alleged failure of the Anchor Borrowers Programme (ABP) from boosting food and crop production in the country has been attributed to faulty intervention structure in the agric sector and other small businesses.
The Chief Executive Officer, Green Saharan Farms, Jos, Plateau State, Suleiman Dikwa, who reacted to the recent position of the International Monetary Fund (IMF) on ABP, which carpeted the implementation of the agricultural credit, said if the problem is not addressed, future interventions might not achieve the desired objectives.
In its report titled: “Selected Issues paper on Nigeria,” IMF disclosed that about N1.4tr or 76 per cent of the N1.9tr loans collected by farmers under the ABP initiative remain unpaid as at January 2023.
The document read, “For the Anchor Borrowers Programme, repayment is also low at 24 per cent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.”
IMF identified poorly targeted loan recipients, use of funding purposes unrelated to agriculture, weak incentive regarding repayment structure, among other factors for its perceived failure.
However, the Central Bank of Nigeria (CBN) in a statement signed by its acting Director of Corporate Communications Department, AbdulMumin Isa had since countered the assertion, noting that the total loan repayments under the scheme stood at 52 per cent in February.
The apex bank disclosed that it had released N1.079tr as of February 28, of which N960b was due for repayment. According to Dikwa, “I have argued in many fora that the structure of intervention in our agriculture and other small business will not achieve the desired objectives and I agree with the IMF who identified poorly targeted loan recipients.
“We are quick to offer direct interventions to the farmers or small businesses by the assumption that everyone is an entrepreneur and can therefore manage all factors of production, whereas they are just producers/farmers.
“The second point is the form of the intervention and the process itself, which has no fitting with the social and economic context of the farmers and the risk of default.”
Dikwa noted that enterprises should have been chosen as direct beneficiaries to form structures to be managed for the producers to benefit. To achieve the best in future interventions, he said government should, “develop over the counter solutions within communities for ease of access by farmers and recovery by the intervention. This strategy makes use of funding for purposes unrelated to agriculture to be derisking by the community social structure rather than unenforceable contracts.
“Today, the financial institutions have to deal with millions of farmers and political debtors who secured the funds on the merit of their affiliation to the government.
“The level of national corruption has made most beneficiaries look at the loans as a share of the national cake because they are regaled with news daily of individuals’ stealing billions of Naira. The challenge in targeting the direct intervention rather than market driven intervention.”
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