The International Monetary Fund (IMF) has revealed that only 24% of loans disbursed under the Anchor Borrowers’ Programme (ABP) of the Central Bank of Nigeria (CBN) have been repaid.
The information was made known by the IMF in its selected issues paper on Nigeria, which was prepared by a staff team of the fund as background documentation for the periodic consultation with the country.
The IMF stated that agricultural credit in Nigeria has not significantly boosted production, and this could be associated with difficulties in targeting the correct recipients. Repayment under the ABP has been very low, with part of the problem being the weak incentive structure for repayment and the fact that the recipient loans are not always well-targeted.
The IMF noted that although the CBN allows farmers to pay in kind or cash under the ABP, repayments have been very low.
The document read, “For the Anchor Borrowing Programme, repayment is also low at 24 percent, especially since repayment can be made in kind, thereby limiting the tenor of the loans to one year.”
“Part of the problem is that the incentive structure for repayment is weak, the recipient loans are not always well targeted, and occasionally the funding is used for other purchases (e.g., new agricultural input trading companies to elicit trading rents).”
In December 2022, the All Farmers Association of Nigeria (AFAN) said most beneficiaries of the billions of naira released by the CBN under its Anchor Borrowers’ Programme were not Nigerian farmers.
Although the CBN kicked against this claim, AFAN argued that the apex bank was finding it tough to recover the loans because the funds were disbursed to individuals who were not into farming and were not captured in the database of the association.
The National Secretary of AFAN, Yunusa Yabwa, said, “Our members have benefited from the program, but most people who benefited from the ABP are not Nigerian farmers. I must confess that to you.
“That is why you see today that the CBN, NIRSAL, and commercial banks, who were the channels for the distribution of this fund, are complaining that these beneficiaries are not repaying the loans.”
