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.