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Anchor borrowers programme: Farmers’ $518 billion loan reveals the disadvantages

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The Anchor Borrowers Programme’s (ABP) failure to collect the N518 billion that the Central Bank of Nigeria (CBN) lent to farmers in Africa’s largest economy highlights the intervention program’s shortcomings. 

It was discovered that many ABP loan recipients were not actual farmers, and those who were often viewed the funds as their piece of the national pie.

“The majority of the loan recipients were not farmers. The ABP loans intended for farmers were being given to keke nape drivers. Abiodun Olorundenro, manager of operations for Aquashoot Limited, suggested that you seek confirmation from locals in the areas where the loans were disbursed.

All Farmers Association of Nigeria (AFAN) national secretary Yunusa Yabwa hinted that the loans were not disbursed properly, which is why it is difficult to ensure repayment in March.

Yabwa claimed that the program was misused and added that it fell short of goals to increase food production.

He claimed that most program participants weren’t farmers. “It is challenging to ensure repayment because many people obtained the loan to invest in other projects, not farming.”

“The anchor borrower is a commendable program, but recovery presents difficulties. Although some of our members benefited from it, the majority of those who did not are not farmers.

The loan was initially explained to Musa Mohammed, a rice farmer in Kebbi, as a gift from the government to help farmers increase production.

Initially, I thought it was a gift to help us increase our productivity, but after using it for a season of farming, we were told it was actually a loan, he said. He said, “I wanted to pay back, but I saw some of my fellow farmers weren’t paying, so I decided not to pay as well.

The ABP program, which was introduced in 2015, aimed to give farmers the essential resources and inputs they required to boost regional production. In the past eight years, it has provided loans to over 4.57 million smallholder farmers who have been engaged in farming across the nation. According to the apex bank, most farmers benefited the most out of the 21 different commodities on 6.02 million hectares.

Despite the investments, Nigeria’s yield per hectare has remained low when compared to other developing nations.

Experts claim that the poor results of the intervention program show that continuing to focus on providing financial support for farmers without resolving lingering issues will only increase inflation rather than increase productivity.

Instead of giving cash handouts to farmers, Olorundenro said, “Government agricultural interventions should focus on providing the right infrastructure to reduce production costs, spur investments, and address the ease of doing business.”

According to Ibrahim Kabiru, national president of AFAN, the government should not directly be involved in the allocation of loans to farmers. Instead, it should do so through appropriate associations that have established rules. He claimed that doing so would guarantee ongoing oversight and assessment as well as guarantee that the funds reach the legitimate farmers.

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