₦2 Trillion Food Fiasco: Nigeria’s Lawmakers Investigate Past Agricultural Financing Schemes

News in Brief:
– The Nigerian House of Representatives is investigating nearly ₦2 trillion spent on government agricultural programs due to concerns of mismanagement and a lack of improvement in food security.
– The probes target CBN’s Anchor Borrowers’ Programme (ABP), NIRSAL loans, and funds allocated to the Bank of Industry, Bank of Agriculture, and National Agricultural Development Programme.

The Nigerian House of Representatives has launched investigations into several government agricultural funding initiatives. They cited concerns over mismanagement and a lack of impact on food security.

The move follows the adoption of a motion on the floor of the House of Representatives by Hon. Chike Okafor (APC-Imo), representing Ehime Mbano, Ihitte Uboma and Obowo federal constituency, on Tuesday.

He claimed that the government had invested ₦8 trillion in agricultural interventions over eight years, yet the country still faced food shortages.

Therefore, the probes will target the following:

• Central Bank of Nigeria’s Anchor Borrowers’ Programme (ABP): This is a ₦1.12 trillion scheme designed to support maize, rice, and wheat farmers through designated anchors (companies involved in processing agricultural products).
• Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL). The investigation will look into the institution’s disbursement of ₦215.1 billion intended to facilitate agricultural and agribusiness ventures.
• Bank of Industry (BOI) Agriculture Value Chain Financing (AVCF) Programme. This probe examines how ₦3 billion was distributed to 22,120 smallholder farmers.
• Bank of Agriculture Loan Facility. The handling of a ₦5 billion loan earmarked for livestock farmers nationwide will be investigated.
• National Agricultural Development Programme (NADP) Recovery Fund. This will focus on the management of a ₦1.6 billion fund allocated to the Ginger Blight Epidemics Central Taskforce (GBECT) for combating the disease.

The House Committees on Nutrition and Food Security, Agricultural Production and Services, Agricultural Colleges and Institutions, and Finance will conduct the probes and report back within four weeks.

Recall that the ABP was created to boost agricultural production, create jobs, and reduce reliance on food imports. It also provided loans (cash and in-kind) to smallholder farmers for key agricultural commodities like rice, maize, and wheat.

However, concerns rose about high default rates and potential misuse of funds by some beneficiaries. Some critics argued for better oversight and questioned the involvement of middlemen in loan distribution.

In December 2023, the CBN stopped processing new loan applications under the ABP and other intervention programs.