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FG to Restructure, Recapitalise BoA With N500bn

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  • FG to Restructure, Recapitalise BoA With N500bn

The Federal Government has set up a 21-man steering committee to restructure and recapitalise the Bank of Agriculture.

The committee would commence the restructuring with N500bn and work within the next three to one month to actualise its goal.

Inaugurating the committee in Abuja on Monday, Vice President Yemi Osinbajo, urged the committee to work within a record time to actualise the goal.

He said the restructuring was aimed at revitalising the operations of the Bank to make it more responsive to its mandate.

Osinbajo, represented by the Minister of Agriculture and Rural Development, Chief Audu Ogbeh, said the restructuring, would strengthen the bank as a platform for providing loans to Small and Medium Enterprise farmers and cooperatives among others.

He said the approach was a pre-privatisation strategy preferred by the Federal Government to pave way for the injection of financial and other requisite resources into the Bank.

He said, “It is noteworthy that in its over 20 years of existence, the BoA has faced myriad of challenges which include, poor funding, poor stakeholder buy in, particularly Federal Government agencies and erosion of stakeholders funds.”

Ogbeh, also the Chairman of the committee, said the committee would commence the restructuring with N500bn and work within the next three to one month to actualise its goal.

The minister said the committee was expected to give the Bank a face-lift, look into the issues of staffing, electronic improvement, work in every community nationwide, provide credits to SMEs and to farmers small or big.

Ogbeh said the Central Bank of Nigeria would hand over the Anchor Borrowers Scheme to the Bank after the restructuring to effectively finance agricultural projects.

He said, “There will be a better run financed BOA so that the interest rate will be easily accommodated by farmers. We will recover some of the credits owed by farmers because some of them have offered to pay.”

The CBN Governor and a member of the committee, Mr Godwin Emefiele, described its Anchor Borrowers Programme which started in 2016 as `a success’.

He expressed optimism that the committee would work to ensure that the BOA achieved its aims and objectives in a very short time.

According to him, the loans that are currently given to farmers through the Anchor Borrowers Scheme is in a single digit

“The Federal Ministry of Agriculture is asking us to reduce the interest rate to about nine per cent to enable farmers buy inputs, go to the farm, make a living and feed the country,’’ Emefiele said.

The Managing Director of BOA, Prof. Danbala Danju, commended the Federal Government for its initiative to restructure the Bank.

He expressed regret over the bad and non- repayment attitude of farmers after collecting funds from the Bank.

Danju said the Bank was targeting single digit interest rate on loans to farmers by the end of the restructuring.

The managing director said the Bank would work with the private sector and the international development agencies to actualise their set target

He said, “The Bank needs to be recapitalised to energise the agriculture sector in line with best practices all over the world.

“We expect a restructuring plan that will look at our operating model, human resources and the entire business plan so that agriculture will be properly financed in Nigeria.

“Agriculture has been under-funded and the key challenge is how to source the fund so that we can assist farmers.

“The key challenge now is how we can reconstitute ourselves to properly identify farmers and ensure that when farmers are given loans and support, they pay back.”

The committee is made up of the Ministers of Finance, Industry, Trade and Investment, Planning and representatives from the BOA, ministry of Justice, Bureau of Public Enterprise, among others.

The nine members known as Project Delivery Team, would also assist the committee to deliver on the restructuring mandate.

CEO/Founder Investors King Ltd, a foreign exchange research analyst, contributing author on New York-based Talk Markets and Investing.com, with over a decade experience in the global financial markets.

Economy

FG to Partly Fund Six Rail Projects Connecting All Regions

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rail project

FG to Partly Fund Six Rail Projects Connecting All Regions

The Federal Government will pay a total sum of N71 billion to partly fund six rail projects connecting all regions of the country.

In the report obtained from the Federal Ministry of Finance, Budget and National Planning, the six rail projects marked for development this year are Lagos-Kano rail line (ongoing), Calabar-Lagos (ongoing), and Ajaokuta-Itakpe-Aladja (Warri).

Others are the Port Harcourt-Maiduguri railway, the new Kano-Katsina-Jibiya-Maradi line in Niger Republic and the Abuja-Itakpe and Aladja-Warri Port and refinery/Warri new harbour.

The Buhari administration will also spend N15.1 billion on the development of safety and security of critical projects, airport certification, runway construction, terminal building, among others in the aviation sector in 2021.

Last week, Rotimi Amaechi, Minister of Transportation, said the Lagos-Kano line would be connected from the Ibadan end of the Lagos-Ibadan railway and would cost $5.3 billion.

We are waiting for the Chinese government and bank to approve the $5.3bn to construct the Ibadan-Kano. What was approved a year ago was the contract,” the minister said.

He added, “The moment I announced that the Federal Government had awarded a contract of $5.3bn to CCECC (China Civil Engineering and Construction Corporation) to construct Ibadan-Kano, people assumed the money had come in; no.

“We have not got the money, which is a year after we applied for the loan. We have almost finished the one of Lagos-Ibadan. If we don’t get the loan now, we can’t commence.”

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Economy

FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

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FG Launches E-ticketing Platform to Deepen Train Usage and Convenience

In a bid to improve the usage and enhance the convenience of train transport in Nigeria, the Federal Government on Thursday announced the launching of the Electronic Ticketing platform for the Kaduna-Abuja rail services.

The N900 million E-ticketing platform was introduced by the Minister of Transportation, Chibuike R. Amaechi, and the Nigerian Railway Corporation.

Amaechi said the new platform would improve efficiency, promote accountability, reduce leakage and enhance economic growth, as well as save time.

The E-ticketing platform was a Public-Private Partnership project done in conjunction with Secure ID Solutions, who provide and would manage the system for 10 years in an effort to recoup its investment before the Nigerian Railway Corporation take charge.

Kofo Akinkugbe, the Chief Executive Officer, Secure ID Solutions, said as the new E-platform issued 25,000 tickets after a successful pilot test on Thursday.

Potential Travelers can book via three ways:

1. Mobile app
2. Website
3. POS or Cash at the station

A validator would be used to scan the ticket barcode to ascertain its authenticity before boarding.

Amaechi further announced that self-service ticket vending machines at various train stations would be introduced soon.

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Economy

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

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Zainab Ahmed Finance Minister

Nigeria’s Excess Crude Account (ECA) Balance Now $72.4 Million

The Minister of Finance, Budget and National Planning, Zainab Ahmed, on Thursday said Nigeria’s Excess Crude Account (ECA) stood at $72,411,197.80 as of January 20th, 2021.

The minister disclosed this at the first National Economic Council (NEC) meeting of the year presided over by Yemi Osinbajo, Vice President and had in attendance State Governors, Federal Capital Territory Minister, Central Bank Governor and other senior government officials.

Ahmed said “Excess Crude Account (ECA), balance as at 20th January, 2021, $72,411,197.80; Stabilization Account, balance as at 19th January, 2021, N28,800,711,295.37; Natural Resources Development Fund Account, balance as at 19th January 2021, N95, 830,729,470.82.”

The minister also said President Muhammadu Buhari has approved N6.45 billion for the setting up of gas plants in 39 locations nationwide in an effort to increase COVID-19 treatment.

What is Excess Crude Account (ECA)

Excess Crude Account (ECA) is an account used to save the disparity in the market price of crude oil and budgeted price of crude oil as stipulated in the Federal Government Appropriation Bill.

Key Takeaways of Excess Crude Account (ECA)

  • Excess Crude Account (ECA) was established in 2004 by the Federal Government to stabilize Nigeria’s economy and smooth out the effect of crude oil fluctuation on Africa’s largest economy.
  • The ECA rose to its highest of $20 billion in November 2008 during the global oil boom when prices were above $100 per barrel.
  • Controversy, allegations of corruption, and uncertain performance have trailed the ECA since creation.
  • The balance plunged from $20 billion in 2008 to $72.4 million in January 2021.

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