News in Brief:
– The Nigerian government proposed merging the Bank of Agriculture (BOA) with NIRSAL Microfinance and injecting new capital to strengthen the bank’s role in achieving food security goals.
-The plan aligns with the Renewed Hope Agenda and aims to improve BOA’s efficiency through better governance and increased financial resources
The National Council on Privatisation (NCP) of Nigeria has proposed a significant restructuring of the Bank of Agriculture (BOA) to enhance its role in achieving national food security goals.
The plan, presented by Vice President Kashim Shettima, involves merging BOA with the Central Bank of Nigeria’s NIRSAL Microfinance Ltd and injecting fresh capital into the bank.
This initiative aligns with the Tinubu administration’s Renewed Hope Agenda and follows a review of BOA’s operations by a committee chaired by Finance Minister Wale Edun. The committee identified the need for urgent reforms and proposed a multi-pronged approach.
Boosting agricultural financing
An argument for the merger is that it will create a more robust financial institution specifically geared towards the agricultural sector. Additionally, the NCP proposes reconstituting the bank’s board with highly qualified and ethical professionals to strengthen corporate governance.
Furthermore, the plan calls for a capital injection to solidify BOA’s financial standing and bolster its capacity to support agricultural development initiatives. The country’s privatisation council also suggests transferring land titles held by the National Agricultural Land Development Authority (NALDA) to the Bank. This move aims to improve the bank’s creditworthiness and attract further investments.
Meanwhile, this proposal comes after previous efforts to revitalise BOA, including a restructuring and recapitalisation initiative undertaken in 2016 by the Bureau of Public Enterprises, the Federal Ministry of Agriculture and Rural Development, and the Federal Ministry of Finance.
Overall, the NCP reiterates its commitment to moving forward with these reforms and has established committees to engage stakeholders and develop a detailed implementation plan. These committees are expected to report back within three weeks.
