Nigeria’s latest Auditor General’s report has revealed that the Central Bank of Nigeria (CBN) failed to recover N629.04 billion disbursed under its flagship Anchor Borrowers’ Programme (ABP), raising new questions about transparency, internal controls, and the overall impact of the intervention scheme.
According to the report, published in September and recently submitted to the National Assembly, the findings were drawn from the apex bank’s 2022 financial statements.
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The report noted significant discrepancies and gaps in the management of the ABP programme, which was introduced to support smallholder farmers and enhance food production across Nigeria.
The ABP initiative
In 2015, the federal government launched the Anchor Borrowers’ Programme. The ABP was designed to link smallholder farmers with processing companies (“anchors”) to enhance production of key commodities.
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The government also designed the ABP to create a new generation of farmers as well as boost employment.
At inception in late 2015, the Central Bank of Nigeria said: “The programme thrust of the ABP is the provision of farm inputs in kind and cash (for farm labour) to smallholder farmers to boost production of these commodities, stabilise inputs supply to agro-processors and address the country’s negative balance of payments on food.”
In 2022, during the unveiling of paddy rice pyramids produced by rice farmers under the ABP initiative, the Nigerian authorities noted that at least 4.8 million people had benefited from the Anchor Borrowers Programme at the time.
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A PREMIUM TIMES investigation revealed that the programme has been marred by loan default, even as food prices rose significantly during the years it took effect.
Research shows that years after disbursing trillions to farmers, recovery challenges have increasingly cast doubt on its effectiveness and the accountability of participating institutions.
“Massive outstanding loans, poor disclosure”
According to the audit, the CBN reported N629.04 billion as outstanding loans under the ABP as of 31 December 2022—down from N949.18 billion in 2021. The 33 per cent reduction (N320.14 billion) was not accompanied by adequate disclosure on the number of beneficiaries or the programme’s impact during the review period.
Auditors noted that the inability to recover such a large volume of funds from anchor companies and other beneficiaries poses a major threat to the government’s food security efforts.
The report added that there was no evidence to show that the CBN was making necessary efforts to recover the outstanding amounts, describing the situation as a result of “weaknesses in the internal control system” at the apex bank.
The audit warned that the unresolved balances could lead to diversion of public funds, and challenges in sustaining national food security, given the central role of the programme in supporting agricultural production.
CBN defends programme performance
In its response to the Auditor General’s report, the CBN maintained that the ABP had performed “above average,” insisting that many of the outstanding loans were tied to restructuring approvals necessitated by natural disasters and the COVID-19 pandemic.
The bank explained that in 2020, flooding and the economic disruptions triggered by the pandemic forced its management to approve the restructuring of all overdue loans, extending repayment periods.
In 2023, the bank said it approved a second restructuring—converting outstanding commodity-association loans into undated zero-coupon convertible debentures to give farmers more time and flexibility to repay.
The CBN added that detailed records of beneficiaries, disbursements, repayments, cultivated hectares, and farmer counts as of December 2023 were “available on request.”
Despite these explanations, auditors deemed the response unsatisfactory, insisting that the findings remain valid until the CBN fully implements recommended corrective actions.
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Recommendations
The audit report urged the Public Accounts Committees of the National Assembly to compel the CBN Governor to account for the N629.04 billion outstanding under the programme.
It also recommended that the bank should recover and remit the full amount to the federal treasury, and provide evidence of remittance to the National Assembly.
It noted that relevant officials should be made to face sanctions under Paragraph 3129 of the Financial Regulations (2009) if compliance is not achieved.
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