FAAC deducts N622.75m for anchor borrowers in 15 months

The Federation Allocation Accounts Committee has deducted N622.75m in 15 months to repay loans disbursed to farmers under the Anchor Borrowers Programme, Sunday PUNCH reports.

The Anchor Borrowers Programme of the CBN was established in November 2015 to create economic linkages between Small Holder Farmers and Anchors.

According to the Federal Account Allocation Committee revenue disbursement report obtained by Sunday PUNCH, the government deducted N45.52m every month from May 2023 to July 2024, totalling N622.75m in 15 months.

However, the repaid amount remains insignificant to the outstanding payment of N450.90bn owed to the CBN as of March 2024.

The amount, titled “CBN Anchor Borrowers”, was listed as a deduction from the nation’s gross revenue each month.

However, it did not specify the state or association to which the deduction was applied.

The Anchor Borrowers Program has been discontinued by the apex bank, which is currently trying to recover funds.

Repayment by beneficiaries had been a difficult task, forcing the bank to take extra measures.

President Bola Tinubu reportedly directed security agencies to assist the CBN in recovering Anchor Borrowers Programme funds from borrowers.

Also, the CBN suspended new loan applications under its intervention programme.

This was as the CBN Governor, Yemi Cardoso, noted that some of the previous failures of the CBN were tied to quasi-fiscal activities under the foray of “development finance activities”.

A CBN official told The PUNCH in April that the bank was recovering the loans disbursed to increase agricultural inputs.

The official said, “There is a committee on the Anchor Borrowers programme and it has been tasked to recover the funds. There were laid down procedures between the banks and the apex bank, and those laws will be looked into to get back the funds.”

Overall, the programme benefitted about 4.67 million farmers involved in either maize, rice or wheat farming.

A CBN document had indicated that Kebbi State, Rice Farmers Association of Nigeria, Cotton Producers and Merchant Association of Nigeria, Maize Growers and Processors Association of Nigeria, and Afex Commodities, among others, were top beneficiaries of the loan.

Meanwhile, the government has removed N1.014tn as a statutory deduction between January and July.

The amount is an increase of 13.42 per cent or N120.12bn from N894.77bn deducted in the corresponding period of 2023.

The high amount is primarily due to foreign debt servicing payments made on behalf of state governments, along with various statutory deductions and limits on the amount to be shared each month, impacting funding for other essential services and development initiatives.