The Federal Government yesterday said it will divest 60 per
cent of its stakes in the Bank of Agriculture (BoA) as part of plans to
restructure the lender.
The
Director-General, Bureau of Public Enterprises (BPE), Mr. Alex A. Okoh, who
spoke at the meeting for the recapitalisation of the bank in Abuja, said the
bank has been performing sub-optimally due to the myriad of challenges it faced
since inception in 1972.
He said: “The
process will lead to the privatisation of equity of the bank.We envisage that
the Central Bank equity will be reduced to 20 per cent, Federal Ministry of
Finance (incorporated) will be reduced to 20 per cent.The government agencies
equity in the new bank will be a minority of 40 per cent. We will then invite
private sector investors who will own 20 per cent and the remaining 40 per cent
equity will be owned by farmers and farmers’ cooperatives,” he said in a
statement endorsed by Head, Public Communications, BPE, Amina Tukur
Othman.
Okoh said the new
strategy envisages that bank will be transformed into a truly agriculture
finance bank modeled along the lines of Agriculture Bank of China and Rabobank
of the Netherlands. He said upon 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 of the bank seek to transform it strictly
into an agricultural finance bank with functional branches in all the local
government areas and major towns in the country.
The
Director-General said the model was sure to 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.
Okoh added
that the model would fundamentally ensure that the BoA becomes a farmers’ bank
owned by farmers.
On the
sustainability of the strategy and attracting investment, Okoh said 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. He said
the measure was to make the bank attractive to investors and attract
cheap funding from multilateral development institutions and other institutional
investors with a focus on agricultural financing.
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