The Special Investigation Team set up by President Bola Tinubu to probe the activities of the Central Bank of Nigeria (CBN) may have stumbled upon grave irregularities that may necessitate the invitation of about five bank CEOs by the investigation team.
It was learnt that some bank CEOs would be invited in an effort to ascertain any discrepancies around the management of intervention funds by deposit money banks.
Also our findings revealed that Obazee submitted an interim report to the President’s office.
Multiple officials said the preliminary report was submitted for necessary action by the President.
“The CBN Special Investigator submitted a preliminary report to the President’s Office over a week ago. The investigation still continues but the preliminary report is meant to give the President an idea of what has been discovered so far,” a top official privy to the development squealed.
Continuing, he said top bank officials will be invited as the investigations proceed over undisbursed N1.27tn intervention funds trapped in the accounts of five banks.
This was based on an analysis of the half-year financial statements of Access Bank, Fidelity Bank, Guarantee Trust Bank, United Bank for Africa, and Zenith Bank.
The intervention funds cover lending facilities provided by the CBN through local banks, and the facilities include Accelerated Agriculture Development Scheme, Anchor Borrowers’ Programme, Commercial Agriculture Credit Scheme, Healthcare Sector Intervention Facility, and Paddy Aggregation Scheme.
They also include Micro, Small, and Medium Enterprises Development Fund, Real Sector Support Facility, 100 for 100 Policy on Production and Productivity, Export Facilitation Initiative, and the Creative Industry Financing Initiative.
Investigations however showed that there was at least N530.07bn worth of intervention funds in Access Bank.
This included about N3.56bn under the Commercial Agriculture Credit Scheme, N1.57bn to facilitate the rapid rollout of agent networks across Nigeria supporting the expansion of a shared Agent Network, N58.84bn under the salary bailout fund, N99.04bn outstanding balance on the excess crude account loans, N9.34bn for the Real Sector Support Facility, N1.14bn for the Accelerated Agricultural Development Scheme.
It also included N955.61m for the Creative Industry Financing Initiative, N8.62bn for the Non-Oil Export Stimulation Facility, and N17.64bn for the Health Sector Intervention Facility, among others.
At least N310.52bn of the intervention funds sit in Fidelity Bank.
It included N80.65bn state bailout fund, N190.06bn Real Sector Support Facility – Differentiated Cash Reserves Requirement, N7.28bn Commercial Agriculture Credit Scheme, N2.5bn Paddy Aggregation Scheme, and N6.36bn 100 for 100 PPP.
About N288.42bn of the intervention funds are in Zenith Bank.
It included N23.54bn Commercial Agriculture Credit Scheme Loan, N1.86bn Power & Aviation Intervention Fund, N125.14bn salary bailout fund, N71.53bn Excess Crude Loan Facility, N28.73bn Real Sector Support Facility and N9.13bn Non-Oil Export Stimulation Facility.
There was about N115.09bn in GT Bank and N25.16bn in UBA as of June 30, 2023.
The new Governor of the Central Bank of Nigeria, Olayemi Cardoso, during his screening at the Senate, stated that there is a need to pull the apex bank from direct development finance interventions to refocus the priorities of the bank.
According to the new governor of the apex bank, the bank needs to move into a limited advisory role that supports economic growth rather than actively play a prominent role in the financing of these projects.
He emphasised the need to restore the apex bank’s independence and credibility by refocusing on its core mandate and ensuring a culture of compliance.
“Much has been made of past CBN forays into development financing such that the lines between monetary policy and fiscal intervention have become blurred.
“In refocusing the CBN to its core mandate, there is a need to pull the CBN back from direct development finance interventions into more limited advisory roles that support economic growth,” he said.
In 2015, the former governor of the CBN, Godwin Emefiele, stated that the bank had over the years been involved in the financing of growth-enhancing programmes and projects of the Federal Government.
He stated that these involvements are incidental to the bank’s core mandates and part of its development and corporate social responsibilities, to accelerate growth and development of the country’s economy.
As of October 2022, about N9tn had been released as intervention funds by the apex bank.
The bank had said that about N3.7tn had been repaid by beneficiaries while over N5tn was not yet due for recovery.
The agricultural sector has been the major beneficiary of the intervention funds, especially through the Anchor Borrower Fund and the Commercial Agriculture Credit Scheme.
About nine banks have at least N208.33bn undisbursed funds from the CBN for the Anchor Borrower Fund and the Commercial Agriculture Credit Scheme at little interest rates.
According to the first half financial statements released to the Nigerian Exchange Limited, three of the banks; Guaranty Trust Holding Company, Wema Bank and Sterling Financial Holdings had N114.10bn of the Anchor Borrowers Fund still in their coffers.
While seven banks including GTCO, Wema Bank, Sterling Financial Holdings, United Bank for Africa, Access Holdings, Zenith Bank Plc, Fidelity Bank, Stanbic IBTC Holdings and FCMB Group combined had N94.23bn of the Commercial Agriculture Credit Scheme funds in their books not disbursed as of the end of June.
The Anchor Borrowers’ Programme was established by the CBN in line with its developmental function. It was launched by former president Muhammadu Buhari on November 17, 2015, to create a link between anchor companies involved in the processing and smallholder farmers of key agricultural commodities.
The CACS is a scheme powered by the CBN in collaboration with the Federal Government represented by the Federal Ministry of Agriculture and Rural Development with the aim of providing concessionary funding for agriculture so as to promote commercial agricultural enterprises in Nigeria.
So far, there have been controversies about the beneficiaries and repayments of the ABP fund.
Stakeholders in the economy also have to deal with a high cost of financing, which has been affecting production and expansion plans in some sectors of the economy.
According to the financial reports of GTCO, the lender still had N75.35bn of the Anchor Borrowers Fund as of June 2023 (December 2022: N78.42bn), which shows that only N3.06bn had been disbursed in six months. The bank revealed that the tenor of the facility depends on the gestation period of the targeted commodity but will not exceed two years. The facility is disbursed at an all-inclusive interest rate of nine per cent.
For the CACS intervention fund, GTCO still had N3.29bn (December 2022: N5.05bn. The facility is for a period of seven years at two per cent annual cost to the company. The maximum interest rate to the borrowers under the scheme is nine per cent annually inclusive of all charges.
Sterling Financial Holdings had N37.90bn of the ABP funds in its coffers which reflected a N12bn increase in six months showing that it disbursed less of the loans to the targeted users. For the CACS, Sterling Holdco had N33.40bn, indicating another increase over N31.59bn recorded as of December 2023.
Zenith Bank still had N 23.53bn of the CACS intervention fund in its coffers. Compared to N32.89bn it had as of December, the bank has disbursed N9.35bn between January and June 2023.
In its report, Stanbic IBTC said that it obtained an interest-free loan from the CBN for the purpose of on-lending to customers under the CACS. The tenor is also based on an agreement with individual beneficiary customers. It had N 6.78bn as of June 2023(December 2022: N8.99bn) showing N2.21bn was disbursed in the first half of the year.
Access Bank said, “The amount of N3.55bn represents the outstanding balance on the on-lending facility granted to the Bank by Central Bank of Nigeria in collaboration with the Federal Government of Nigeria in respect of Commercial Agriculture Credit Scheme established by both CBN and the FGN for promoting commercial agricultural enterprises in Nigeria.
“The facility is for a maximum year of seven years at a zero per cent interest rate to the Bank. The Bank did not provide security for this facility. From this creditor, the bank has nil undrawn balance as at 30 June 2023.”
source : The PUNCH
