… probe BoA over N6bn net loss in 2 years
Members of House of Representatives Wednesday resolved to summon management teams of Central Bank of Nigeria (CBN) and Ministry of Finance over non-compliance with presidential directive on recapitalisation of Bank of Agriculture (BoA).
The resolution was passed sequel to the adoption of the motion sponsored by Femi Fakeye, who stressed the need for urgency to fully subscribe to the share capital of BoA for optimal contribution to Nigeria’s ailing economy.
Federal Government’s share in BoA are vested in 60 percent in the MOFI and 40 percent in CBN.
According to him, “President of the Federal Republic of Nigeria, effective December 5, 2001, approved that he Bank of Agriculture be capitalised to the tune of 50 billion to be subscribed in four equal instalments of 12.5 billion annually within four years of that date by both shareholders.
“Meaning that the Federal Government expected the shareholders to have fully paid up their respective subscriptions by December 2005. In line with the 60:40 ownership structure, the equity contributions of the shareholders by December 2005 should have been as follows: 60% – MOFI worth N30 billion and 40% – CBN worth N20 billion.”
The lawmaker however lamented that out of the N27,707,546,176 paid-up portions of the shareholdings leaving balance of N2,292,453,824 (7.64%) outstanding while CBN’s paid-up portion of the shareholdings stands at N4,026,922,000 leaving the balance of N15,973,078,000 (79.9%) outstanding.
“A cursory review of the financial statements of BoA shows a distressed company with a net loss of N2.2 billion in 2014 and a net loss of N4.8 billion in 2015 (both accounts audited) and unless urgently recapitalised, BoA faces some dwindling fortunes in the immediate future.
“The House is also concerned that even as Federal Government has made it a declared objective to revamp the agricultural sector of the economy to contribute to the national income/gross domestic product, boost employment generation and sectoral contribution to export proceeds to replace the dwindling income from oil and gas, the economy as a whole is currently in dire straits and on proverbial life-support,” he observed.
While noting that CBN has over the years operated in such a profitable manner, the lawmaker noted that the apex bank has led the pack among government agencies and parastatals operating under the Fiscal Responsibility regime in remitting part of its operating surplus revenues to the Consolidated Revenue Fund of the Federation.
He however queried the lackadaisical attitude of CBN management who have been providing billions of naira in form of Intervention funds through commercial and specialized banks for several development finance activities including agriculture, but failed to met it’s statutory obligation in the capitalisation of BoA.
To this end, the House mandated the Committee on Agricultural Production and Services to investigate and determine the causes for the unwillingness of both shareholders to pay their subscriptions in full and report back to the House within four weeks for further legislative action.
