The Federal Government yesterday said that it would boost the operations of the Bank of Agriculture (BOA), with N250 billion to enable it to grant credit access to farmers.
Disclosing this in Lagos, yesterday, at a Stakeholders Media Interactive Forum, organised by the Bureau of Public Enterprises (BPE), its Director-General, Dr. Alex Okoh, said the recapitalization of BOA became imperative, as current capitalization is negative.
Okoh explained that equity holding in the recapitalized bank will be in the ratio of 40 per cent to the Central Bank of Nigeria (CBN), and Ministry of Finance Incorporated (MOFI); 20 per cent to the private sector, and the remaining 40 per cent to active farmers.
He added that the recapitalization, which is in line with current restructuring/commercialization efforts, will also “lead to the emergence of an Agriculture Micro Finance Bank that will provide capital for small scale farmers thereby boosting productivity in the sector,” just as “the process of appointing a Transaction Adviser to superintend the process is nearing completion.”
This comes as the Bureau admitted that it would not be able to meet its share of about N300billion contribution to the N8.612 trillion 2018 National Budget before year end as expected.
The sum was expected to have been generated from the sale of some power plants in Nigeria, including Afam, Geregu, Calabar, and Omotosho, which process should have been completed this year.
Okoh revealed that the Yola plant, which was returned back to the government in 2015 by its previous core investor, Integrated Energy and distribution Management Services, was expected to have reached financial close by November, but for the delay in the appointment of transaction advisers for the process.
However, the sale of the asset and others billed for such purpose have now been moved to January 2019.
Regarding the success and perceived failure of the privatization of the power sector, the Minister of Information, also Chairman, Stakeholders’ Engagement Committee, National Council on Privation (NCP), Lai Mohammed, insisted that the process was a success given the milestones so far achieved by this administration.
Mohammed, during a Q&A, defended that the reason the Federal Government has not revoked some of the sales as being clamoured is because of its respect for the sanctity of contracts, contrary to accusations.
He said: “We (Government) did not want to send the wrong signals, so we didn’t want to revoke any agreement entered into in the power sector,” even as he agreed that the generation and distribution companies have not performed optimally.
As far as the Minister is concerned, significant milestones had been recorded in the sector since 2015, including plans to pump into the national grid, additional 2,000 megawatts (MW) by December, to bring capacity to about 9,000MW from less than 3,000MW upon takeover. This is in addition to expanding the transmission capacity to 5,000MW.
Aside from the provision of a N701-billion Power Assurance Guarantee, to assure gas suppliers and GenCos that government will pay for whatever power supplied to the DisCos, Mohammed reassured that once ongoing reforms gain higher ground, more impact would be felt.
He pleaded with all stakeholders, including the media to pass on the true information regarding the privatization exercise to stem the push-backs and criticisms the process had generated.
He reiterated that the parts of the objectives of the commercialization and privatization exercise include abrogating public sector monopoly to give room for private sector participating in key sectors of the economy as well as creating policies to encourage and guide such participation and a host of others.