BY ONOME AMUGE
The Central Bank of Nigeria (CBN), according to the amended CBN Act of 2007 as derived from the 1958 Act of Parliament, is entrusted with the overall control and administration of the monetary and financial sector policies of the federal government.
Thus, the apex bank is saddled with diversified objectives, with the cardinal being, issuance of legal tender currency; ensuring monetary and price stability; promoting a sound financial system in the country; maintaining external reserves to safeguard the international value of the legal tender currency; administering the banks and other financial institutions (BOFI) to guarantee financial stability; and acting as a banker and provider of economic and financial advice to the Nigerian government.
Over the years, the pressing need for economic resuscitation and diversification, resulted in the CBN having its finger in every pie of the country’s key economic sectors, playing prominent roles in areas like industry and manufacturing, agriculture, power, infrastructure, among others.
Consequently, the apex bank’s intervention in the agriculture sector saw the setting up of various initiatives, the most notable being the Anchor Borrowers Programme (ABP) launched in 2015.
Considered Nigeria’s largest agricultural project, the ABP was geared towards improving agricultural productivity by creating an ecosystem that drives value chain financing, reduce the country’s food import bill through import substitution and enhanced value addition, grow small holder farmers from subsistence to commercial farming, and promote a new generation of farmers through increased financing and innovative structuring to support agriculture.
The CBN also deepened its involvement in the agricultural sector with the introduction of the Accelerated Agriculture Development Scheme (AADS) and the Private Sector-Led Accelerated Agriculture Development Scheme (P-AADS) to facilitate rapid production of key agricultural commodities..
The scheme, funded from the Anchor Borrowers’ Programme (ABP), has seen the CBN play the role of a managing agent; issue and review modalities and operating guidelines from time to time; provide regulatory and supervisory oversight; monitor, evaluate and conduct impact assessment of the programme in conjunction with other stakeholders and provide periodic reports on the programme, further positioning the CBN at the forefront of the country’s agriculture sector.
Highlighting the economic impact of the CBN-facilitated programme, Governor Godwin Emefiele, recently announced that the apex bank has thus far, granted N948 billion to 4,478,381 smallholder farmers across the country, aimed at boosting food production. Emefiele added that the programme has created 12.5 million direct and indirect jobs for Nigerian youths.
He averred further that the programme has resulted in a significant increase in rice production from less than four million metric tonnes recorded in 2015 to over 7.5 million metric tonnes, adding that the country currently has over 50 standard integrated rice mills, compared to only 15 recorded before the launch of the ABP.
The CBN governor maintained that the central bank has set a trend in the diversification of the economy, with aggressive production plans for maize, wheat, soybeans, cassava, sorghum cassava, cocoa, and other crops.
According to him, the Anchor Borrowers’ Programme, which is an essential part of President Muhammadu Buhari’s drive for economic diversification, had improved the fortunes of rural farmers, leveraging on the value chains of the various agricultural products to transform agriculture into a potential for economic growth.
Emefiele added that the CBN was constantly engaging the farmers to enhance their trust in the system, provide a competitive price arrangement and facilitate effective market linkages for their outputs.
Despite the laudable accomplishments of the ABP as announced by the apex bank, stakeholders in the agriculture sector have voiced their discontentment over the CBN’s dominant position in the sector, particularly in the operation of one of the most predominant agricultural projects in the country, arguing that the Federal Ministry of Agriculture and Rural Development (FMARD), which encompasses about 17 departments, six regional offices, 37 state offices, 11 agencies, 15 research institutes, 14 colleges of agriculture and a considerable number of agriculture-based universities, is structurally better positioned to handle the role, while the CBN concentrate on its core monetary and fiscal responsibilities.
Victor Iyama, national president, Federation of Agricultural Commodity Associations of Nigeria (FACAN), faulted the CBN’s role in the contracting of inputs and land clearing for farmers under the ABP, noting that it has negated the apex bank’s core monetary role.
Iyama alleged that the CBN issued very little portion of the sum loan it announced to farmers, with huge amounts ending in the hands of friends and cronies of the CBN officials.
The FACAN president argued that the whole sum of the anchor borrower loan should have been given directly to the farmers to procure their inputs and engage reliable service providers of their choice, adding that his organisation as apex body of all commodity associations would have monitored the programme to achieve effective result at a paltry charge.
According to Iyama, a more effective and structural positioning of primary agricultural producers towards mass production should be better pursued through the ministries of agriculture, and industry, trade & investment, while the CBN should rather concentrate on ensuring naira stability towards achieving macroeconomic growth.
Speaking in the same vein, the Nigeria Agribusiness Group (NABG), enjoined the federal government to reappraise the Anchor Borrowers’ programmes and make it more sustainable by transferring its control from the CBN to the agriculture ministry.
Kabir Ibrahim, chairman, administrative board of the group, who questioned the credibility of the programme, noted that the initiative has been unable to fulfil a lot of gaps while a large percentage of farmers are yet to enjoy its benefits.
Further justifying the bid to relocate the programme from the CBN’s control, Ibrahim said; “What happens to the programme if the next CBN governor does not believe in the programme? We must remember that former CBN governors such as Soludo and Sanusi Lamido Sanusi’s focus were on restructuring the banks and other reforms.
“We must learn to institutionalise interventions and relocating the programme to the (agriculture) ministry will ensure this takes place. The relevant people and ministries that have specific mandates must be allowed to execute the tasks that have been placed on their shoulders.”
Ibrahim also argued that the farmers that the CBN engaged in the ABP are largely unknown, adding that the apex bank’s target of two million farmers was not realistic being that the farmers in Nigeria are over 14.5 million.
Adedayo Bakare, an economist and chief operating officer, Money Africa, a financial literacy company, emphasised that the primary role of the CBN is to guarantee price stability and at times, oversee economic and financial planning.
The CBN, he said, has been trying to play a bigger role in the agricultural sector but technically, it does not have the capacity or knowledge to follow through on everything it has proposed. A regular route for the CBN has been to provide financial interventions to the agricultural sector to ensure it is still not struggling to acquire funds needed to run and sustain the programmes.
According to Bakare, access to finance stimulates agricultural investment, and to a large extent, augments productivity which is where the CBN should collaborate with the ministry of agriculture rather than being in charge of non-related policies.
The economist stressed that the major factors that contribute to agricultural growth, deals with the proficient utilisation of agricultural input, technological application and technical efficiency.
He added that the framework for these to work effectively should be controlled by the agriculture ministry because the ministry constitutes experts who have in-depth knowledge on agricultural practices, unlike CBN officials who have very limited knowledge about agricultural operations.