BOA to raise capital base to N250bn

The Managing Director, Bank of Agriculture (BOA),Prof. Danbala Danju,  says the bank plans to raise its capital base to N250billion.

Danju, who addressed newsmen in Sokoto on Sunday, said the move was to make the bank operate in tune with the new Central Bank of Nigeria (CBN) guidelines.

He said :” N250 billion new capital base is to enable us start up as a minimum working capital.

” The bank was established about 43 years via an Act, with a working capital of about N50billion.

” The total capital has been eroded since then by inflation and other formidable challenges.”

Some of them included the non-payment of the issued capital, cost of operations in terms of payment of salaries,  overheads and maintaining decaying infrastructure.

Danju said another problem was the non- payment of issued capital by both the Central Bank of Nigeria and the Federal Ministry of Finance.

According to him, the Federal Ministry of Finance and the apex bank were supposed to have paid the capital on a 60:40 ratio, respectively.

He added:” These capital base was not met and the shares not fully subscribed as only about N 31 billion was paid.

”The Federal Ministry of Finance is yet to pay about 2 billion, while the CBN is yet to pay about N17 billion, since then.”

The BOA boss further said that it had requested for a N300 billion loan facility from the CBN to support small holder farmers.

Also the bank had requested for a N500 billion loan facility from the apex bank to support commercial farmers in the country.

Danju lamented that farmers in the country currently owed the bank about N 20billion.

” Some of the debts were owed due to the merger of the bank with the defunct National Agricultural and Cooperative Bank, Peoples Bank of Nigeria and Family Support Programme.

” The merger generated a more complicated social structure, while policy somersaults also did a lot of damage.

”We are now compiling the list of the defaulters across Nigeria, while efforts are on to recover the loans.

We are also thinking of legal actions against defaulters, while creating an agency like the Assets Management Commission for the bank would help.

”Such a commission if created for the bank would buy off the debts and help to reinvigorate the bank.”