The alleged failure of the Anchor Borrower Program (ABP) from improving food and crop production in the country is due to the faulty intervention structure in the agricultural 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 the ABP, which is responsible for the implementation of agricultural credit, said that the problem was not addressed. , future interventions may not achieve the desired goals.
In a report titled: “Selected Issues Paper in Nigeria,” the IMF disclosed that about N1.4tr or 76 percent of the N1.9tr loan collected by farmers under the ABP initiative remains unpaid as of January 2023.
The document reads, “For the Anchor Borrower Program, the repayment is also low at 24 percent, mainly because the payment can be made in a way, thus limiting the tenor of the loan to one year.”
The IMF identified untargeted loan recipients, use of financing objectives unrelated to agriculture, weak incentives in terms of repayment structures, among other factors for the perceived failure.
However, the Central Bank of Nigeria (CBN) in a statement signed by the acting director of the Department of Corporate Communications, AbdulMumin Isa has since refuted the claim, stating that the total repayment of loans under the scheme was at 52 percent in February.
The apex bank announced that it had released N1,079tr on February 28, of which N960b is due to be repaid. According to Dikwa, “I have argued in many forums that the structure of intervention in agriculture and other small businesses will not achieve the desired goal and I agree with the IMF that determines the recipient of untargeted loans.
“We are quick to provide direct intervention to farmers or small businesses with the assumption that everyone is an entrepreneur and therefore able to manage all factors of production, while only producers/farmers.
“The second point is the form of the intervention and the process itself, which does not fit the social and economic context of the farmers and the risk of failure.”
Dikwa noted that the company should be chosen as the direct beneficiary to form a structure that will be managed so that the producers benefit. To get the best intervention in the future, he said that the government should “develop counter solutions in the community to be easily accessible to farmers and recover with the intervention. This strategy uses funding for purposes that are not related to agriculture to be underestimated by the social structure of the community instead of an unenforceable contract.
“Today, financial institutions have to deal with millions of farmers and political debtors who secure funds because of their relationship with the government.
“The level of national corruption makes most of the beneficiaries consider loans as part of the national cake because every day there is news about the theft of billions of Naira. The challenge is to target direct intervention instead of market intervention.