National Council on Privatisation Receives Recommendations for Restructuring Bank of Agriculture
The National Council on Privatisation (NCP) has received crucial recommendations from its committee tasked with the restructuring of the Bank of Agriculture (BOA). These recommendations aim to address various challenges facing the bank and revitalize its operations to better serve the agricultural sector.
Among the key recommendations put forward by the committee are:
- Merger with the Central Bank of Nigeria’s NIRSAL Microfinance Ltd.
- Recapitalization to inject fresh capital into the bank and reconstitute the Board of Directors to enhance corporate governance.
- Ceding National Agricultural Land Development Authority (NALDA) land titles to BOA to reflect in its Balance Sheet, thereby increasing its capital adequacy for fundraising.
- Provision and upgrade of the Bank’s ICT infrastructure to automate processes, reduce costs, and expand outreach to grassroots.
- Enhance governance and risk management by appointing qualified Board members and senior management with relevant expertise.
The recommendation for recapitalization is particularly emphasized as a crucial step towards revitalizing BOA. Currently, the Ministry of Finance Incorporated (MOFI) controls 60% of shares, while the Central Bank of Nigeria (CBN) controls 40%. Previous proposals suggested reducing government shareholding to 40%, introducing private capital amounting to 20% shares, and listing the remaining 40% on the stock exchange for public purchase. Some stakeholders have suggested allocating shares to farmers’ cooperative unions. Ultimately, the goal is to list BOA on the stock exchange for public investment.
In 2019, the recapitalization target for BOA was approximately N200 billion. However, with the current restructuring efforts, stakeholders anticipate a higher recapitalization target, potentially reaching N500 billion.
The restructuring of BOA is seen as a crucial step in strengthening the agricultural sector and promoting economic growth. The NCP will carefully consider these recommendations to chart a path forward for BOA’s transformation, ensuring it becomes a more effective and sustainable institution in supporting agricultural development across Nigeria.
