The Federal Government is ready to divest 60% of its stakes in the Bank of Agriculture to reposition it for greater impact.
Director-General of the Bureau of Public Enterprises, BPE, Mr. Alex Okoh disclosed this at the kick-off meeting for the recapitalisation of the bank in Abuja.
A statement signed by the Head, Public Communications, BPE, Amina Tukur Othman, on Thursday, noted that the bank had performed sub-optimally due to the myriad of challenges it faced since inception in 1972.
According to him, “the process will lead to the privatisation of equity of the bank. We envisage that the Central Bank of Nigeria’s, CBN, equity will be reduced to 20 percent, Federal Ministry of Finance (incorporated) will be reduced to 20 percent.
“Government agencies equity in the new bank will be a minority of 40 percent.
“We will then invite private sector investors who will own 20 percent and the remaining 40 percent equity will be owned by farmers and farmers’ cooperatives”.
Okoh stated that the new strategy envisages that BoA will be transformed into a truly agriculture finance bank modeled along the lines of Agriculture Bank of China and Rabobank of The Netherlands, adding that with its establishment in 1972 to serve as an agricultural and cooperative bank to provide services of a development finance institution, it was vested with the responsibility of providing low cost credit to small holder and commercial farmers.
He, however, lamented that the bank had been unable to realise its responsibilities due to its current structure, stressing that the proposed restructuring and recapitalisation seeks to transform it strictly into an agricultural finance bank with functional branches in all the local government areas and major towns in Nigeria.
The director-general said this 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.
On the sustainability of the strategy, he explained that measures would be put in place to take non-performing credit facilities off the balance sheet and books of the bank and possibly sold off to a factor agent, adding that the measure is to make it attractive to investors and also attract cheap funding from multilateral development institutions and other institutional investors with a focus on agricultural financing.
Okoh commended the Minister of Agriculture and Rural Development, Chief 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.