FG Mulls BOA, NIRSAL Merger, Fresh Capital Injection

April 25, 2024
NIRSAL

By Adedapo Adesanya

The federal government through the National Council on Privatisation (NCP) is mulling merging the Bank of Agriculture (BOA) with the Central Bank of Nigeria’s NIRSAL Microfinance Limited for efficiency.

This followed key recommendations from its committee and a fresh capital injection to revitalize the bank, according to a statement signed by Mr Stanley Nkwocha, the Senior Special Assistant (SSA) to the President on Media and Communications in the Office of the Vice President on Wednesday.

Addressing the second NCP meeting of 2024 at the Presidential Villa yesterday, the Vice President, Mr Kashim Shettima, reiterated President Bola Tinubu’s commitment to repositioning and reforming BOA to drive the administration’s food security agenda.

“Let’s get very sound professionals with integrity to manage the bank. If we use it well, it’s going to be a tool for the transformation of our economy because agriculture is the key,” the Vice President said.

Presenting the committee’s report, the Minister of Finance and Coordinating Minister of the Economy, Mr Wale Edun, who doubles as NCP Vice-Chairman, said the council’s decision was informed by the challenges identified and the need for urgent resolution of the issues confronting the bank.

Mr Edun outlined the major recommendations, including “the immediate reconstitution of the Board of Directors of the Bank to enhance corporate governance” and “a merger of BOA with the CBN’s NIRSAL Microfinance Limited.”

He also highlighted the proposal to “cede National Agricultural Land Development Authority (NALDA) land titles to BOA so that it reflects in its Balance Sheet, thus increasing its capital adequacy for the purpose of raising funds from institutional investors.”

The finance minister acknowledged the need for financial reinforcement, and identified “adequate capital injection into the bank by the shareholders” as a crucial step forward.

The committee’s report comes after the NCP empanelled an 8-member inter-ministerial body in December 2023 to review the state of affairs at BOA, given agriculture’s critical role in the economy and the Tinubu administration’s commitment to food security under the Renewed Hope Agenda.

In 2016, the NCP had approved the collaboration between the Bureau of Public Enterprises (BPE), the then Federal Ministry of Agriculture and Rural Development, and the Federal Ministry of Finance to restructure and recapitalize BOA.

A consultant, Lead Capital Consortium, was engaged in 2019 to review the bank’s operations and advise on strategies for rebirth and growth. The consultant’s core recommendation was for the government to recapitalize the bank, implement reforms, provide technical assistance, and transform BOA into a sustainable agricultural development bank.

Mr Edun further outlined additional recommendations, including “Provision and upgrade of the Bank’s ICT infrastructure to automate processes, reduce costs and enhance the Bank’s outreach to the grassroots” and “Enhance governance and risk management by appointing qualified Board members and senior management with relevant expertise.”

In a move to bring transparency and efficiency to the nation’s energy sector, the NCP also noted the proposal seeking approval for the establishment of an independent system operator from the Transmission Company of Nigeria (TCN).

The VP then set up a committee to liaise with the Special Adviser to the President on Energy, Mrs Olu Verheijen and the Federal Ministry of Power to provide a roadmap and reach out to stakeholders.

Adedapo Adesanya

Adedapo Adesanya is a journalist, polymath, and connoisseur of everything art. When he is not writing, he has his nose buried in one of the many books or articles he has bookmarked or simply listening to good music with a bottle of beer or wine. He supports the greatest club in the world, Manchester United F.C.

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