Nigerian Federal Government is willing to give out the 60 per cent interests it has in the Bank of Agriculture. It said it will divest 60 per cent of its stakes in the Bank of Agriculture (BoA) as part of plans to restructure the bank.
Nigerian Agency in charge of sales of government companies, Bureau of Public Enterprises (BPE), said the bank had been under-performing since 1972 when it first came into existence.
What the Agency Plans To Do
According to the DG of the Bureau of Public Enterprise, once the equity of the bank is restructured:
- The Central Bank of Nigeria’s equity in the bank would be reduced to 20 per cent
- Federal Ministry of Finance (incorporated)’s equity would be reduced to 20 per cent, so that both government agencies’ equity in the new bank will be a minority of 40 per cent.
- Private sector investors would then be invited to subscribe to 20 per cent of the equity;
- The remaining 40 per cent equity will be owned by farmers and farmers’ cooperatives, the statement endorsed by the by Head, Public Communications, BPE, Amina Tukur Othman.
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Aim of the New Strategy
- The BPE stated that the new strategy is to transform the bank into a truly agriculture finance bank modeled along the lines of Agriculture Bank of China and Rabobank of the Netherlands.
- The model would ensure that farmers form clusters of cooperatives and thrift societies throughout the six geo-political zones for the purpose of participating in the ownership of the Bank.
- The model would fundamentally ensure that the BoA becomes a farmers’ bank owned by farmers.
- The BPE also said measures to make the bank attractive to investors and attract cheap funding from multilateral development institutions and other institutional investors with a focus on agricultural financing.
Charles Rapulu Udoh
Charles Rapulu Udoh a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organisations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution and data analytics both in Nigeria and across the world.