Tag: Bank of Agriculture

The Bank of Agriculture (BoA) has come under intense public scrutiny lately with allegations of fraud, mismanagement, gross incompetence, high-handedness and other forms of insider-abuse against the Malam Kabir Adamu-led board and management. In this report, Ibrahim Apekhade Yusuf, Abdulgafar Alabelewe, Charles Okonji and Mediant Kanabe examine the contending issues

Finally, the jury is out: the Bank of Agriculture (BoA) is in dire financial straits and at the brink of imminent collapse except of course, a miracle happens!  That much investigation by The Nation has revealed.

A catalogue of woes

To say that things have literally fallen apart for BoA is certainly stating the obvious. From owing arrears of staff salaries, accumulating more debts than normal and general low staff morale exacerbated in part by a management bereft of ideas as to how to turn around the once vibrant Bank, BoA in a manner of speaking has turned full circle.

Vision behind the BoA

The history of Bank of Agriculture, a Nigerian government sponsored bank that provides credit facilities to both small and large scale farmers and small businesses within rural areas established in 2000 and assumed the assets of the National Agriculture and Cooperative Bank, People’s Bank and the Family Economic Advancement Project, can be traced to the establishment of Nigerian Agriculture Bank (NAB) in 1973. NAB was a government initiative to fund agriculture development projects in the country, in particular small-scale farm holders that may not enough collateral to obtain credit facilities from commercial banks. At the time, many farmers were considered high risk borrowers by commercial lenders and NAB was established to provide microcredit to small farmers and on-lending to agricultural firms.

Sadly, that vision with the benefit of hindsight has been aborted and the dream completely deferred, what with the legion of woes bedevilling the once towering behemoth.

Genesis of the BoA’s crisis

But how did this organisation come to this sorry past one might be tempted to ask? Speaking with a cross-section of concerned staff, who asked not to be named for fear of victimisation they confided in The Nation that the trouble with the Bank began since inception of the Mallam Kabir Adamu-led management.

According to the embittered staff, the management as presently constituted has no idea of the workings of a civil service organisation which the Bank of Agriculture is.

While giving plausible explanations to buttress their arguments, the staff said the total disregard for the expertise and experience by the management may have alienated them from the Bank and ultimately their commitment to the job.

Investigation by The Nation also revealed that the Bank which was previously under the management of Federal Ministry of Finance and the Central Bank of Nigeria (CBN) may have been hijacked by the Ministry of Agriculture with no single representative of the CBN or Finance in the management of the Bank.

Informed sources confided in The Nation that the present problem of the institution emanated from the political loans packaged by the head office with burden shifted to the branches under concept tagged: ‘sustainability.’

According to some informed sources, the Kabir Adamu-led management when they took over the saddle had the interest of the Bank at heart. But they missed the mark for lack of understanding the modus operandi of the Bank.

“Their focus was to change the system but you can’t change what you don’t understand. They failed to study the existing system therefore creating a friction between those who believed in the old order and the agent of change thereby creating unwarranted friction and undeserved antagonistic behaviour.”

The antagonism, the source further noted, “Destroyed the required mutual trust and unity of both top and executive management making it as if no one is thinking for the Bank.”

Besides, the issue of poor stewardship on the part of the management was also seen by some staff as one snag that needed to be addressed thus giving the impression that the management is not accountable to anybody and this further eroded confidence.

Issues raised by concerned members of staff

At separate petitions, copies of which were made available to The Nation, concerned staff members of the BoA had expressed disgust with the way and manner the Bank was being run.

Amongst other things, the staff said hitherto branches placed money in the commercial banks and generate interest which they use in paying salaries. However, they alleged that the Head office tactically stopped such procedures thus making it difficult for the branches to survive at the end of the day.

Another issue hotly debated by the staff is the problem of poor reward system. Specifically, they claimed that they did not benefit from the last national minimum wage because the reason then was that their wages was above N18,000. There are however concerns about getting the N30, 000 new national minimum wage approved by the federal government.

Even FG no longer at ease with BoA

Meanwhile, the Minister of Agriculture Dr Audu Ogbeh only recently hinted of plans to recapitalise and restructure the Bank, a development, he declared, would boost the economy through the empowerment of farmers and creation of millions of additional jobs.

The Minister had announced that the Federal Government’s decision to divest 40% of its shares in the Bank for farmers to buy and that new private sector investors would now be encouraged to take equity participation in the Bank.

According to the Minister, this recapitalisation and restructuring would fetch the Bank N250billion additional fund.

Responding to the Minister’s call, the Buhari Media Organisation (BMO) in a statement signed by its Chairman Niyi Akinsiju and Secretary Cassidy Madueke, noted that farmers’ ownership of 40% of the Bank will ensure, among other things, that the Bank would be user-friendly and that another class of wealthy farmers will soon emerge.

BMO also noted that restructuring of the Bank is another step in the diversification policy of President Muhammadu Buhari “which has helped tremendously to jumpstart the country’s economy.  The decision to recapitalise the Bank of Agriculture will usher in a new type of Farmer’s Bank like the Farmers Bank of China and Rabbo Bank in the Netherlands.”

The pro-Buhari group noted that if the BoA had been functional in the delivery of its core mandate, there would’ve been no need for the Central Bank of Nigeria to intervene through the Anchor Borrowers Programme: “but through the efforts and policies of President Buhari’s administration, Bank of Agriculture can now be truly regarded as farmers’ bank.

“The outcome of the recapitalisation of the Bank of Agriculture will be an increase in productive output as the bank will have the capacity to give out loans at single digit interest rate to farmers who need to expand production.”

The pro-Buhari group maintained there is a new paradigm shift in the organisation of productive forces in the country and called on all Nigerians irrespective of political affiliation to support and partake in the value chain of President Buhari’s diversification policies.

Intervention by the workers’ union

It is however instructive to note that the workers’ travails have not gone unnoticed. Checks by The Nation revealed that a number of labour unions have tried to mediate in the crisis brewing at the BoA. One of such unions is the Association of Senior Staff of Banks, Insurance and Financial Institutions (ASSBIFI).

Confirming this development in an interview with The Nation at the weekend was the National President of ASSBIFI, Comrade Oyinkan Olasanoye.

According to the labour leader, efforts are on to resolve the crisis at the BoA. Much as she sided with the staff of BoA, she however declared matter-of-factly that as a labour union the last thing on their mind is to bring down any organisation as that would be counterproductive.

Answering questions bordering on sundry issues ranging from high-handedness of the management, general low staff morale amongst others, Comrade Olasanoye said there was no cause for alarm.

The ASSBIFI boss, who revealed to our correspondent that she met with the BoA chapel of ASSBIFI to get to the root of the problem, said all hope is not lost.

“At the outset of the crisis at the BoA, I personally visited the place last December to see things for myself, where I had met with the management. What I discovered is that the present crop of management is running the place not like a typical civil service organisation,” she said.

Pressed further, she said, “You know in the public service, staff expect that they would be promoted every three years no matter what. But in the case of the Bank of Agriculture, the last time they had this was in 2014. Some of the staff complained that they have not been promoted since 2014. What we did was to ask the management to look at it. But then we were told that some of those qualified for promotion needed to sit for promotion in line with the civil service rule.”

Determined to get the issues resolved, Comrade Olasanoye recalled she got the assurances of the management that those affected would be considered for promotion and should in fact be prepared to sit for an exam.

To show its seriousness, the ASSBIFI top echelon revealed that the management drew a list of those in line for promotion from 2014 till date and requested those affected to write the promotion exam slated for this month. But as to be expected, this didn’t go down well with those affected as they reckoned that they ought to have done the promotion exam much earlier.

Having found itself in a middle of such a situation, the best option the union wanted to explore was a more persuasive stance rather than roughshod with the management, she said.

All said, she would rather the staff do everything within the ambits of the law by supporting the management.

Bank’s response

While addressing some of the concerns raised by the staff, Oluremi Olaoye, Head, Corporate Communication of the Bank said the situation painted by the former was not as bad.

On claims that the staff had not been paid for over 12 months now, he said it was not true. “This is not true. However, the Bank’s Strategic Business Units, such as branch offices and zonal offices are expected to generate businesses and manage their operations to be profitable such that they are able to pay their salaries, in situations where it is obvious they do not have the capability to pay, the Head Office intervenes by providing them funds.”

On the issue of lack of promotion in the last 20 years, he recalled that the last general promotion exercise took place in 2015. “Apart from this, as recent as this month (April) staff who have acquired additional qualification were appropriately elevated.”

While addressing the issue of political loans packaged by the Head Office, the media-minder of the Bank said, “The Bank has a loan process which ensures that all credits are properly appraised. This involves several layers from the desk officer through various levels before it gets to the executive management or the Board of Directors for amounts beyond the threshold of the Executive Management.”

Who blinks first?

With plans by the federal government to divest its 40 per cent shares from the Bank it is expected that the new crop of investors would certainly not allow business as usual. But in the interim will the management dance to the tune of the distraught staff most of who feel cheated by the system already? Time will tell.

Oluremi Olaoye, Head, Corporate Communication at the Bank of Agriculture (BOA) in this interview with Ibrahim Apekhade Yusuf and Abdulgafar Alabelewe addresses issues raised by concerned members of staff. Excerpts:

There are claims that staff have not been paid for over 12 months now. How true is this and why? 

This is not true. However, the Bank’s Strategic Business Units, such as branch offices and zonal offices are expected to generate businesses and manage their operations to be profitable such that they are able to pay their salaries, in situations where it is obvious they do not have the capability to pay, the Head Office intervenes by providing them funds.

No promotion in the last 20 years. How true is this and why?

This is not true. The last general promotion exercise took place in 2015. Apart from this, as recent as this month (April) staff who have acquired additional qualification were appropriately elevated.

The petitioners also raised allegation of gross incompetence by the current board. What’s your take on this?

The Board of the Bank has not been reconstituted since it was dissolved in 2015. Is it also through that, there is system breakdown on the bank? There is no “system breakdown” in the Bank. BOA has been pivotal to the success of the Central Bank of Nigeria’s (CBN) well acclaimed Anchor Borrowers Programme (ABP). The Bank has disbursed over N82 billion to about 425,000 farmers nationwide. The CBN will surely not run such an important programme through an institution whose system has broken down. Apart from the ABP, the BOA is running other programmes through products targeted at youths and women with the objective of reducing unemployment and ensuring financial inclusion.

There are claims that the present problem of the institution emanated from the political loans packaged by the Head Office but the burden shifted to the branches under a concept tagged: Sustainability. What is the justification for this?

The Bank has a loan process which ensures that all credits are properly appraised. This involves several layers from the desk officer through various levels before it gets to the executive management or the Board of Directors for amounts beyond the threshold of the Executive Management. Apart from this, the Bank has a Risk Management Department headed by a very senior person (General Manager) who operates a robust risk management framework to appraise all credit requests. This includes a critical appraisal for politically exposed persons (PEP). It should however be noted that credits papers emanate from the branch offices, are reviewed by the zonal offices before the Management Credit committee’s review and recommend for approval or otherwise. Thus, the onus lies on branches which generate the credits to recover them.

What is the bank management doing about the alleged general low staff morale?

Thank you for classifying it as “alleged.” However, the staff morale by our assessment is not low. Maybe this was the case a few years ago. Let me state for clarity that working with the staff unions, the bank recently reinstated staff loans, regularised the appointment of erstwhile contract staff, appropriately placed staff with additional qualifications and instituted a new regime of manpower development through trainings.

It has also been alleged that, members of the management team recruit their families to the Bank over the existing staff. Without due process. What is the management’s reaction to this?

Every recruitments done in the Bank under the current management has gone through the due process, and the process has been open and fair. As earlier said, every effort has been made by the management to ensure that every staff gets what he merits, promotions, upgrading, etc. It would however be unfair to deny qualified family members of staff from applying for employment with the Bank.