The Central Bank of Nigeria (CBN) has halted all further disbursements of loans to the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL), amidst widespread allegations of corruption.
The agency’s flagship Anchor Borrowers’ Programme and its chief executive Aliyu Abdulhameed have been rocked by charges of endemic graft in recent months, with multiple officials plugged in about the crisis.
The CBN’s suspension of further loans to NIRSAL under Mr Abdulhameed was contained in a March 10 correspondence that referenced a February 24 meeting in which the decision was taken for an immediate pause on all loans. The memo said the decision would only be rescinded after all outstanding loans out of NIRSAL have been resolved.
NIRSAL was also asked to submit monthly reports on its activities to CBN, a decision that indicated a retraction of CBN’s confidence long enjoyed by the credit risk managers.
Officials said the action was a major blow to Mr Abdulhameed, although it would also leave some farmers stranded since NIRSAL would no longer have any loan to disburse or plunder.
“We know it is bad for the Anchor Borrowers’ Programme, but at least we know that there will be no money to steal further,” an official said under anonymity because of his current appointment under the Buhari administration. “The CBN’s action is a welcomed development because NIRSAL has been exposed to a lot of bad debts due to its focus on corruption rather than productivity and development of the agric value chain.”
Anne Ihugba, a spokeswoman for NIRSAL, did not comment on the suspension order from CBN when reached by The Gazette for comments but maintained all claims of corruption undertone were false.
Former President Goodluck Jonathan launched NIRSAL in 2013 with a $500 million guarantee to disburse across multiple layers of farming activities. The department, which was launched in collaboration with the federal ministry of agriculture, has been under CBN supervision.
NIRSAL said its mandate is to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agriculture and agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalising incentives for agricultural lending through strategic areas, including risk-sharing, insurance, technical assistance, incentives and rating.
But the agency’s has been known largely as the main coordinator of the Anchor Borrowers’ Programme, a flagship agric policy institution by the Buhari presidency in November 2015.
NIRSAL grants low-interest agric loans to so-called smallholder farmers who have been identified as key to the trading of agricultural commodities across the country.
