The Managing Director of Bank of Agriculture (BOA), Prof. Danbala Danju, says the bank plans to raise its capital base to N250bn.
Danju, who addressed newsmen in Sokoto on Sunday, said the move was to make the bank operate in tune with the new Central Bank of Nigeria (CBN) guidelines.
He said the new N250bn capital base will serve as BOA’s minimum working capital.
“The bank was established about 43 years ago via a parliamentary act, with a working capital of about N50billion. However, inflation and other formidable challenges have eroded the starting capital,” said Danju.
“Some of the challenges include the non-payment of the issued capital, cost of operations in terms of payment of salaries, overheads and maintaining decaying infrastructure.
Danju said non- payment of issued capital by both CBN and the Federal Ministry of Finance was another problem.
According to him, the Federal Ministry of Finance and the apex bank were supposed to have contributed the initial working capital on a 60:40 ratio, respectively.
He added that the the bank did not meet its initial capital base of N50bn as it managed to raise only about N 31 billion.
“The Federal Ministry of Finance is yet to pay about 2 billion. Meanwhile, the CBN is yet to pay about N17 billion, since then,” said Danju.
Support for farmers
The BOA boss said that it had requested for a N300 billion loan facility from the CBN to support small scale farmers.
He also disclosed that the bank had requested for a N500 billion loan facility from the apex bank to support commercial farmers in the country.
Danju lamented that farmers in the country currently owed the bank about N 20billion.
“We incurred some of the debts due to the merger of the bank with the defunct National Agricultural and Cooperative Bank, Peoples Bank of Nigeria and Family Support Programme,” said Danju.
“The merger generated a more complicated social structure, while policy somersaults also did a lot of damage.
“We are now compiling the list of the defaulters across Nigeria. Efforts are also on to recover the loans.
“We are also thinking of legal actions against defaulters. We also think that creating an agency like the Assets Management Commission for the bank would help.
“Such a commission would buy off the debts and help to reinvigorate the bank,” he added.