FAAC deductions hit N622.75m, as CBN struggles to recover Anchor Borrowers programme loans
The Federation Allocation Accounts Committee (FAAC) has deducted N622.75 million over a 15-month period to repay loans disbursed to farmers under the Central Bank of Nigeria’s (CBN) Anchor Borrowers Programme.
The Anchor Borrowers Programme, launched by the CBN in November 2015 to support smallholder farmers and bolster agricultural productivity, was designed to create direct linkages between farmers and agribusiness anchors.
However, recent data from FAAC’s revenue disbursement report reveals that there have been consistent monthly deductions of N45.52 million from May 2023 to July 2024, this effort, has however remains insignificant, in comparison to the N450.90 billion still outstanding to the CBN as of March 2024.
With the Anchor Borrowers Programme now discontinued by the CBN, the apex bank is ramping up efforts to recover the outstanding loans.
According to sources, the CBN has been facing challenges with repayment by beneficiaries, prompting President Bola Tinubu to direct security agencies to assist in recovering Anchor Borrowers Programme funds from borrowers.
Furthermore, the CBN has suspended all new loan applications under its intervention programmes. The newly appointed CBN Governor, Yemi Cardoso, stated that some of the previous failures of the CBN were tied to quasi-fiscal activities under the foray of “development finance activities.”
An official from the CBN revealed that a dedicated committee has been established to facilitate the recovery of funds.
“There is a committee on the Anchor Borrowers programme and it has been tasked to recover the funds. There were laid down procedures between the banks and the apex bank, and those laws will be looked into to get back the funds.”
Approximately 4.67 million farmers, involved primarily in the cultivation of maize, rice, and wheat, benefitted from the programme, with Kebbi State Rice Farmers Association of Nigeria, Cotton Producers and Merchant Association of Nigeria, Maize Growers and Processors Association of Nigeria, and Afex Commodities being key beneficiaries of the loan.
Meanwhile, the federal government’s statutory deductions continue to rise sharply. Between January and July 2024, N1.014 trillion was removed, reflecting a 13.42 per cent increase from the N894.77 billion deducted during the same period in 2023. This surge in deductions, largely driven by foreign debt servicing payments made on behalf of state governments, is impacting the government’s ability to fund development initiatives and essential services.
