Olufemi Adeyemi 

In a pivotal move to enhance Nigeria's agricultural financing framework, the Federal Government has unveiled plans to privatize the Bank of Agriculture (BOA).

This initiative is designed to draw private sector investment, broaden credit accessibility, and improve operational efficiency, marking a substantial transformation in the governance and ownership of the institution.

The Bank of Agriculture was created to offer financial assistance to farmers and agribusinesses but has faced persistent issues such as inefficiencies, inadequate funding, and bureaucratic hurdles. The proposed privatization seeks to tackle these obstacles and reposition the bank as a more agile and inclusive entity.

Currently, the Ministry of Finance Incorporated (MOFI) possesses 60 percent of BOA’s shares, while the Central Bank of Nigeria (CBN) holds the remaining 40 percent. The privatization strategy will significantly modify this structure, with both MOFI and CBN reducing their stakes to 20 percent each. An additional 20 percent will be designated for private investors, while a substantial 40 percent will be offered to farmers, cooperatives, and the general public through the capital market.

The Federal Government's decision to incorporate farmers and cooperatives into the ownership framework is particularly significant, highlighting its dedication to democratizing credit access and empowering those directly engaged in agriculture.

By promoting the formation of cooperative groups among farmers, the government intends to facilitate the distribution of loans and grants, mitigate credit risks, and enhance accountability.

This restructuring is anticipated to create new avenues for private sector involvement in the agricultural industry. Private investors, recognized for their ability to introduce innovation, expertise, and financial resources, are expected to play a pivotal role in transforming the Bank of Agriculture (BOA) into a more resilient financial entity that can effectively support Nigeria’s agricultural development and food security goals.

A senior government official commented on this development, labeling it as “a transformative shift for agriculture in Nigeria.” The official emphasized that the introduction of private investment and increased participation from various stakeholders would not only improve the bank’s functionality but also help to bridge the ongoing funding deficits that have impeded the sector's advancement.

The imperative for farmers and other stakeholders to establish cooperative groups is now evident. These cooperatives are anticipated to play a crucial role in securing and distributing credit under the new framework. Given the significant allocation of loans and financial support intended for these organizations, experts strongly encourage farmers to proactively form cooperatives to fully capitalize on the opportunities presented.

With Nigeria's agricultural sector poised for comprehensive privatization, analysts anticipate the restructured Bank of Agriculture will catalyze transformative growth and sustainable development for the nation's farmers and agribusinesses.