Central Bank of Nigeria (CBN) on Thursday disclosed that the apex bank raised funds from the N200 billion Commercial Agriculture Credit Scheme to implement the 2016 grain mop-up scheme with the view to avert looming food insecurity.
Dipo Fatokun, CBN’s Director, Banking and Finance, who spoke at the ongoing investigative public hearing into the activities of National Emergency Management Agency (NEMA), explained that the scheme was initiated by Federal Government.
According to him, being the monitor of country’s economic system, the apex bank took steps to prevent an imminent food security danger due to rising inflation, price increase of commodities and falling value of naira as well as the need to encourage local farmers and spare the country of the consequences of the activities of the foreign companies.
While reacting to the assertion that the fund was credited to an Infrastructure Euro bond, Fatokun discloses that the loan was raised by the Debt Management Office (DMO) as a debt for CBN from the N200 billion Commercial Agriculture Credit Scheme.
“These companies were selected because they were big ticket off takers and known by grain farmers. That’s why they were invited to participate in the special programme of grain mop up.
“As to the status of the loan, the loan was given to the four banks in December 2016 and fully paid up between October and November 2017.
“On source of funding, as stated by us at our first appearance at this public hearing, we are bankers to the government, we maintain government accounts and we act on mandates received from government just as commercial banks act on mandates received from their customers.
“The Ministry of Finance and the office of the Accountant General of the Federation (AGF) will be in a better position to throw light on that,” he told the Committee.
Under the arrangement, the bank engaged four companies to mop-up food grains across the country as part of its intervention scheme for the specific year, adding that all the participating companies were fully paid for the loan they sourced from commercial banks to execute the project.
When a asked why the letter for the Minister of Finance had to write to CBN for the payment of the participating companies instead of the AGF, Mahmud Isa-Dutse, Permanent Secretary Federal Ministry of Finance, explained that there must have been discussion that necessitated that move.
In his part, Fatokun however explained further that paragraph five of the said letter clearly stated that the payment should be made after a mandate from the AGF.
He said the letter was a notice to CBN that such payment was in the offing.
To this end, Isa Ali, chairman, House Committee on Emergency and Disaster Preparedness adjourned its public hearing sine die.
KEHINDE AKINTOLA, Abuja
