David Adonri, vice chairman, Highcap Securities has said that the exist of the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) from the umbrella of Central Bank of Nigeria to merge with Bank of Agriculture (BOA) will allow the apex bank focus on its core mandate.
David made the statement during an interview with the Techeconomy correspondent.
Earlier, Kashim Shettima, the vice president, affirmed President Bola Tinubu’s commitment to repositioning and reforming BOA to drive the administration’s food security agenda.
The National Council on Privatisation (NCP) received key recommendations from its committee on the Bank of Agriculture (BOA), including a proposed merger with the Central Bank of Nigeria’s NIRSAL Microfinance Ltd and a fresh capital injection to revitalize the bank.
Wale Edun, the minister of finance and coordinating minister of the economy, who doubles as NCP vice-chairman, said the decision was informed by the challenges identified and the need for urgent resolution of the issues confronting the bank.
He also 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 Ltd”.
The minister also recommended that the land titles of the National Agricultural Land Development Authority (NALDA) be ceded to “BOA so that it reflects in its Balance Sheet, thus increasing its capital adequacy for the purpose of raising funds from institutional investors”.
“This will increase the capital adequacy for the purpose of raising funds from institutional investors,” he said.
Edun further outlined additional recommendations, including the “provision and upgrade of the bank’s ICT infrastructure to automate processes, reduce costs and enhance the bank’s outreach to the grassroots”. “Enhance governance and risk management by appointing qualified board members and senior management with relevant expertise,” he added.
Reacting, the Highcap Securities Boss said, on assumption of office, Cardoso indicated that the apex bank will focus on its core mandate, which includes but is not limited to monetary policy formulation.
“When the current Governor of CBN took office, he stated that the bank will focus on its core mandate of monetary policy formulation. Accordingly, CBN has been winding down its direct credit intervention programs.”
Therefore, “the exit of NISRAL from the umbrella of CBN to merge with BOA is a fallout from change in focus by CBN and Movement of such subsidiaries to a platform where they will be more effective.
The Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) is a non-Bank Financial Institution wholly-owned by the Central Bank of Nigeria (CBN) created to redefined, Dimension, Measure, Re-Price and Share agribusiness-related credit risks in Nigeria.
NIRSAL’s includes stimulating the flow of affordable finance and investments into the agriculture sector by de-risking the agriculture & agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and industry, and institutionalizing incentives for agricultural lending.
Meanwhile, the National Council on Privatization (NCP), is a think-tank sponsored by the Nigerian government to determine the political, economic and social objectives of the privatization and commercialization of Nigeria’s public enterprises.
It was reinvigorated in 1999, with the promulgation of the Public Enterprises (Privatization and Commercialization) Act No.38 of 1999, which established the National Council on Privatization with the BPE as its Secretariat
Its functions are approval of public enterprises to be privatized or commercialized, approval of guidelines and criteria for valuation of public enterprises for privatization and choice of strategic investors, approval of public enterprises to be privatized or commercialized.
Others are: Approval of the prices of shares or assets of the public enterprises to be offered for sale, Approval of the appointment of privatization advisors and consultants, and the approval of the budget of the Council.
