Nigerian Farmers Say The Loan Program Went the Wrong Way

The All Farmers Association of Nigeria (AFAN) supported President Bola Tinubu’s directive to the Central Bank of Nigeria (CBN) regarding the recovery of outstanding Anchor Borrower loans extended to farmers. Addressing the issue of these unrecovered loans, AFAN’s National President, Arc Ibrahim Kabir, revealed that the N2.6 billion (US$3.43 million) loan program faced challenges primarily because it was accessed by individuals who were not engaged in farming activities. This misalignment between loan recipients and the intended beneficiaries led to difficulties in loan recovery.

Kabir pointed out that the program had failed to engage AFAN adequately, and there was a lack of coordination between the scheme and the Federal Ministry of Agriculture and Food Security when it was initially launched in Kebbi State for Rice and Wheat cultivation, with an initial budget of N2.6 billion.

He further attributed the persistently high food inflation in the country to the mismanagement of the CBN’s Anchor Borrower Program (ABP), which was initiated in 2015 as part of the Agriculture Promotion Policy (APP) covering the period from 2015 to 2019.

“The program began on a positive note but lost its focus by concentrating on only a few commodities without conducting proper due diligence,” Kabir stated. He suggested that the program should have been institutionalized within the Federal Ministry of Agriculture and Rural Development, with AFAN playing a key role in identifying genuine farmers to ensure sustainability and transparency.

Kabir emphasized that the loan amount allocated to the scheme was excessive for agricultural production and, instead of enhancing food security, it contributed to soaring food prices. AFAN proposes agricultural lending within the country to be managed by the Bank of Agriculture (BoA), with equity sold to farmers through AFAN. This approach would establish a comprehensive database of farmers and their respective crops and commodities, streamlining the verification process before loan disbursement. Such measures would increase the likelihood of loan repayment and foster greater coverage among genuine farmers.

Source: Vanguard