Following what it described as sub-optimal performance, the Bureau of Public Enterprises (BPE), said it has become imperative to restructure the Bank of Agriculture (BOA), to substantially improve its operating framework and governance structure.This is with a view to enhancing its efficiency, ahead of its eventual privatisation, the Director General, Bureau of Public Enterprises (BPE), Alex A. Okoh, has said.
Speaking at the kick-off meeting for the recapitalisation of the Bank on Tuesday, in Abuja, Okoh said in a statement that the Bank had performed sub-optimally due to the myriad of challenges it faced since inception in 1972.He was quoted, "The process will lead to the privatisation 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 said the new strategy envisages that BoA will be transformed into a truly agriculture finance bank similar to the Agriculture Bank of China, and Rabobank of the Netherlands.He added that upon its establishment in 1972, to serve as an agricultural and cooperative bank that will provide services of a development finance institution, with responsibilities that included providing low cost credit to smallholder and commercial farmers.
He, however, decried that the Bank had been unable to realise its set objectives due to its current structure, noting that the proposed restructuring and recapitalisation of the Bank seek to transform it completely to an agricultural finance bank with functional branches in all the local government areas and major towns in Nigeria.
Okoh further said the new structure will 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, just as the farmers too will become part owners.
On the sustainability of the strategy and attracting investment, Okoh explained that measures would be put in place to take non-performing credit facilities off BoA's balance sheet and books and possibly sold off to a factor agent. This, he said, will make the Bank attractive to investor, and also attract cheap funding from multilateral development institutions and other institutional investors with a focus on agricultural financing.
He was said to have commended the Minister of Agriculture & Rural Development, 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.Also congratulating the Lead Consortium - the Adviser, he added that upon conclusion of the transaction, BoA would be placed on a platform to optimise its potential to make positive impact on the nation's natural endowments for arable farming.