LAGOS, Nigeria (VOICE OF NAIJA)-Officials of the Central Bank of Nigeria (CBN), yesterday faced scrutiny from the Senate Ad-hoc Committee regarding a N30 trillion overdraft extended to the Federal Government.Â
In addition to probing the overdraft, the committee also delved into the disbursement of the N1.1 trillion Anchor Borrowers’ fund allocated to rice farmers by the apex bank.
Prompted by a motion and subsequent debate concerning the CBN’s activities under former Governor Godwin Emefiele, the Senate convened a 19-member panel tasked with investigating the substantial overdraft to the Federal Government, often referred to as the “Ways and Means.” The panel was granted a six-week window to compile and submit its findings.
Under the chairmanship of Senator Isah Jibrin from Kogi East, the committee convened with officials from the apex bank, led by CBN’s Deputy Governor of Corporate Services, Bala Bello. Following the session at the National Assembly in Abuja, Senator Jibrin informed reporters that the loans extended must be fully recovered.
During the meeting, Bello presented details on both the N30 trillion Ways and Means overdraft and the Anchor Borrowers’ fund on behalf of the CBN. Senator Jibrin emphasised that the committee gleaned valuable insights from the CBN’s presentation, informing their subsequent discussions.
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Expressing concerns over certain approvals, Senator Jibrin highlighted instances where the CBN governor unilaterally authorised transactions, a deviation from standard protocol. The committee demanded immediate clarification on these approvals, emphasising the importance of adherence to established procedures.
Despite challenges, the N1.1 trillion Anchor Borrowers’ fund exhibited an impressive repayment rate of up to 70 percent. However, the remaining 30 percent, totaling N358 billion, posed higher risks due to loans disbursed to low-income farmers. Senator Jibrin identified potential risks stemming from these loans, including the farmers’ limited capacity to effectively manage farms, leading to possible defaults.
In response, the committee recommended that commercial banks, which facilitated the loans, assume credit risks and pursue borrowers for repayment. This approach aims to mitigate potential losses and ensure accountability within the lending ecosystem.
As the investigation unfolds, stakeholders await further insights and resolutions from the Senate Ad-hoc Committee, underscoring the importance of transparency and accountability in financial transactions of national significance.