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CBN Disagrees With IMF’s Poor Rating of Anchor Borrowers’ Programme, Says Over 50% Loan Repaid

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Godwin Emefiele

The Central Bank of Nigeria (CBN) has reacted to the recent poor rating of the International Monetary Fund (IMF) on the Anchor Borrowers’ Programme, faulting its claim.

The CBN stated that as of February 2023, 52.39 percent of the loan which amounts to N503bn has been repaid by the beneficiaries of the programme. This contradicts the IMF’s statement.

Investors King had earlier reported that the International Monetary Fund said only 24 percent of loans offered to farmers under the Anchor Borrowers’ Programme of the CBN have been repaid.

The IMF mentioned that the repayment process is very low and the programme structure weak as CBN allows the farmers to pay in cash or in kind.

The international body further alleged that the beneficiaries were not carefully selected as some used the funds for other purposes instead of agriculture.

In a statement by the Acting Director, Corporate Communications Department, AbdulMumin Isa, on Monday, the apex bank stated that out of the N1.079 trillion disbursed for the programme, N960 billion was due for repayment.

Isa further said that about 4.45 million smallholder farmers had been beneficiaries of the ABP for planting 21 different crops on 6.02 million hectares.

He said, according to the Food and Agriculture Organisation, the ABP has immensely aided the national output of focal commodities, with maize and rice peaking at 12.2 million metric tonnes in 2021 and 9.0 million metric tonnes in 2022.

“It is pertinent to note that the tenor of loans under the ABP is based on the commodity gestation period. For instance, loans granted to farmers cultivating some perennial crops could have up to seven-year tenor.

“The Central Bank of Nigeria remains committed to its developmental mandate of stimulating access to finance for the real sector, particularly agriculture, as it continues to support the Federal Government’s drive for food security and economic growth. Accordingly, the Central Bank of Nigeria continues to welcome applications from eligible Nigerian farmers and firms under the Anchor Borrowers’ Programme,” the acting Spokesperson stated.

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Loans

Nigeria in Talks with World Bank for $1bn Loans to Aid Displaced Persons and Rural Development

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world bank - Investors King

In a bid to tackle the challenges confronting internally displaced persons (IDPs) and bolster rural development initiatives, the Nigerian government has entered negotiations with the World Bank for loans totaling $1 billion.

This financial infusion aims to address the pressing needs of IDPs and uplift rural communities across the nation.

The proposed loans, detailed in World Bank documents titled ‘Solutions for the Internally Displaced and Host Communities Project’ and ‘Rural Access and Agricultural Marketing Project – Scale Up,’ signify a concerted effort by the government to provide comprehensive support to vulnerable populations and enhance economic opportunities in rural areas.

With an allocation of $500 million earmarked for IDP assistance and an additional $550 million dedicated to rural access and agricultural marketing, these loans underscore the government’s commitment to fostering inclusive growth and resilience within communities grappling with displacement and economic challenges.

The World Bank’s involvement underscores the global community’s recognition of Nigeria’s efforts to address humanitarian crises and promote sustainable development.

The loans are poised to fund initiatives aimed at improving access to basic services, fostering social cohesion, and enhancing livelihood opportunities for IDPs and their host communities, particularly in conflict-affected regions of the country.

Furthermore, the infusion of funds into rural access and agricultural marketing endeavors is poised to unlock new pathways for economic growth, empower local farmers, and bridge the gap between rural communities and broader markets.

As negotiations progress, stakeholders anticipate transformative impacts that will propel Nigeria towards a more prosperous and inclusive future for all its citizens.

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Senate Initiates Probe into N30tn Ways and Means Loans under Buhari Administration

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Muhammadu Buhari

The Nigerian Senate has embarked on a comprehensive investigation into the disbursement and utilization of the N30 trillion Ways and Means loans obtained by the Central Bank of Nigeria (CBN) during the administration of former President Muhammadu Buhari.

The Ways and Means facility allows the CBN to provide financial support to the government to cover budget shortfalls.

The decision to probe the massive loans comes amid concerns about the transparency and accountability surrounding the utilization of these funds, particularly as the country grapples with economic challenges, food crises, rising inflation, and worsening insecurity.

The Senate’s investigation aims to shed light on how the substantial overdrafts from the CBN were acquired and expended under the leadership of former President Buhari.

There is growing apprehension that the indiscriminate spending of the overdrafts, particularly during Godwin Emefiele’s tenure as CBN governor, may have contributed significantly to the current economic predicament facing the nation.

The probe will delve into the details of the N30 trillion overdrafts, with a specific focus on examining the purpose for which the funds were allocated and how they were utilized.

Also, the Senate will scrutinize the N10 trillion disbursed under the Anchor Borrowers Scheme, as well as the utilization of $2.4 billion out of the $7 billion earmarked for forex transactions.

The initiative underscores the Senate’s commitment to ensuring transparency, fiscal responsibility, and prudent financial management in the country’s economic affairs.

It is anticipated that the probe will unearth vital insights into the financial transactions of the past administration, enabling corrective measures to be taken to address any mismanagement or discrepancies discovered.

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Foreign Loans Dominate Nigeria’s 2023 Capital Importation, Hits $2.31bn – NBS Report

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US Dollar - Investorsking.com

In 2023, foreign loans dominated Nigeria’s capital importation, according to the latest report from the National Bureau of Statistics (NBS).

The report reveals that out of the total $3.91 billion foreign investment inflow, foreign loans accounted for $2.31 billion, representing 59.1% of the total capital importation.

The NBS data indicates a substantial increase in foreign capital inflow compared to previous quarters.

The final quarter of 2023 saw a notable surge, with foreign capital importation rising from $654.65 million in the third quarter to $1.09 billion.

This surge reflects increased investor confidence and interest in Nigeria’s economic prospects.

However, the dominance of foreign loans in the capital importation landscape raises concerns about Nigeria’s debt profile and sustainability.

While foreign loans can provide crucial funding for development projects and infrastructure, excessive reliance on borrowing poses risks to the country’s fiscal health and economic stability.

It underscores the urgent need for prudent debt management and strategies to diversify funding sources.

The breakdown of the capital importation further reveals that Nigeria received $433.87 million in the first quarter, $771.53 million in the second quarter, $507.71 million in the third quarter, and $594.75 million in the fourth quarter as foreign loans.

The report underscores the importance of addressing structural challenges and creating an enabling environment to attract diverse forms of foreign investment beyond loans.

It emphasizes the need for policies that promote sustainable economic growth, attract foreign direct investment, and reduce reliance on external borrowing.

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