Nigeria Incentive-based Risk Sharing System For Agriculture Lending (nirsal) Md, Abdulhammed In Alleged Corruption Mess
Fresh crisis is currently rocking the Nigeria Incentive-Based Risk Sharing System for Agriculture Lending (NIRSAL) over allegations of corruption, fraud and lack of transparency by its managing director, Mr. Aliyu Abbati Abdulhammed.
NIRSAL, an initiative of the Central Bank of Nigeria (CBN), the Bankers Committee (BC) and the Federal Ministry of Agriculture & Rural Development (FMA&RD), incorporated as a public limited liability company (PLC) and licensed as a non-bank financial institution (NBFI) is tasked with the primary mandate of facilitating the flow of credit to agribusiness value chain players and collaborating with stakeholders to fix broken agricultural value chains in Nigeria.
As against the mandate of NIRSAL, the managing director, Mr. Abdulhammed is said to have turned the agency into his family business favouring his family members and friends. He is alleged to have appointed his younger brother, Babangida Abdulhammed as his technical assistant, handling all procurement related matters, effectively usurping the functions of the procurement department of NIRSAL. Sources alleged that Babangida singlehandedly decides how contracts are awarded at NIRSAL and who gets them.
As if that was not enough, the son of the managing director, Imran Abdulhammed, is the sole supplier of office equipment including desktop computers, laptops, etc. at exorbitant prices.
Investigations also revealed that the managing director circumvents the usual routes in procurement. A staff of the apex bank, who is one of his relatives, has been fingered in some wild infractions including backdating of documentations for several monies that had been spent to secure board approvals. It was further learnt that Mr. Abdulhammed singlehandedly appoints contractors who work with the company. Nextzone, Blue Accord, Global Knowledge consulting are some of the firms allegedly linked to him by sources.
The lack of transparency in the workings of the NIRSAL leaves much to be desired. Besides the fact that it makes nonsense of the president’s anti-corruption crusade, it further exposes the current government’s inability to adequately monitor public officers. For instance, contrary to government’s directive placing ban on foreign trainings, NIRSAL had sent some staff on trainings abroad, including a particular one in South Africa, described as jamboree by a member of staff who was part of the training.
“It was a shabby exercise and a total waste of public resources,” the staff said. He is also accused of flying in first class on foreign airlines. Amongst other things, the managing director was accused of not keeping adequate records of financial transactions and commitments relating to inflow, expenditure and disbursements. NIRSAL has accumulated bad credit guarantees running into billions of naira, while the farmers are yet to benefit.
Another issue causing ripples in the agency is how the managing director allegedly misappropriated a princely N342 million released to NIRSAL by the Central Bank of Nigeria (CBN) under its Anchor Borrowers’ programme (ABP) for a Southwest maize farmers’ cooperative, Hope Concept Investment Cooperatives and Credit Union.
The fund, which was approved by the Central Bank of Nigeria and released in July last year to NIRSAL, for onward disbursement to about 1,800 small holders’ farmers that make up the union, was for preparation of land and planting of maize during the rainy season.
The CBN had reportedly credited NIRSAL on July 18 and 19, 2018 with a first tranche of N246,523,120:00 but instead of NIRSAL to remit the fund to the bona fide farmers who were registered with and approved by the CBN as beneficiaries, Abdulhammed directed that the fund be transferred to NIRSAL’s operations office in Abeokuta.
It was learnt that Abdulhammed tweaked the mandate of NIRSAL from risk management to operating as a commercial bank. The concerned farmers were asked to apply afresh for the fund as a loan, a development they kicked against.
The concerned maize farmers/beneficiaries were subsequently subjected to a long delay that NIRSAL masterminded through a series of unnecessary meetings, trainings and workshops while the fund was idle in NIRSAL’s account, attracting huge interest. Sources familiar with the development hinted that many weeks, which the farmers would have used to deploy in the farms were lost, a development that disrupted timelines for cultivation and harvest of maize for off-taking by companies that make use of maize in the production of their goods.
The off-takers, the biggest of them being the Flour Mills Plc had to source for maize (raw materials) from other farmers when the beneficiary farmers under the aegis of Hope Concept Investment Cooperatives and Credit Union could not meet up with the timelines for supply of maize.
Investigations further revealed that while the concerned southwest farmers waited in vain for their respective accounts to be credited with the funds, officials of NIRSAL asked the farmers to part with some of the funds before disbursing.
Due to the alleged corrupt practices of the NIRSAL officials, the farmers lost over N600 million, excluding funds spent on clearing the lands, interest on loans and other costs. Upon approval of Hope Concept’s request, the group also fulfilled the payment of a requisite N16 million equity counterpart funding, which is five per cent of the financing.
We gathered that the farmers were supposed to supply about 6,000 MT of maize to Flour Mills Plc. One of the concerned southwest maize farmers alleged ethnic bias and deliberate promotion of a northern economic expansionist agenda against Abdulhammed who hails from Adamawa State and whose appointment was said to have been influenced by the first lady, Mrs. Aisha Buhari.
Consequently, it became difficult for senior officials in the apex bank to rein in on Abdulhammed over his questionable act and other impunities including misappropriation of funds and abuse of processes in the contract awards.
Meanwhile, the farmers are demanding compensation for time lost, funds spent on clearing the lands, other financial costs including the counterpart funding and interest on loans. NIRSAL under the current leadership has huge reputational problems as it has also been accused of withholding a N1 billion intervention fund in Owerri, Imo State and another in Delta State. At a public event recently in Abuja, farmers from Kojoli Farms in Jada, Adamawa, called for the overhauling of NIRSAL, citing large-scale corruption in the running of the affairs of the organization. The lack of transparency in the workings of the NIRSAL leaves much to be desired. Besides the fact that it makes nonsense of the president’s anti-corruption crusade, it further exposes the current government’s inability to adequately monitor public officers.
NIRSAL REACTS, DECLINES COMMENTS ON ALLEGATIONS
In our fact-finding mission, The Witness contacted the managing director of NIRSAL, Mr. Aliyu Abdulhammed for his and the agency’s angle to the allegations.
In a statement sent to The Witness by the agency’s Head of Corporate Communications, Anne Ihugba, the managing director reeled out the mandate of NIRSAL but declined comment on the allegations raised by our reporter.
Read the full statement below:
Over the past few weeks, there has been an intensification of longstanding attacks against NIRSAL and its current management by entrenched interests and other hostile elements who do not mean well for the country.
The obvious objective of the campaign is to halt the momentum of progress that NIRSAL, working with public and private sector partners, is making in transforming the Nigerian agricultural economy in order to boost productivity, food security and the welfare of the teeming millions of smallholder farmers around the country. We are certain that they will fail.
The attacks are also characterized by desperate efforts to distort and misrepresent NIRSAL’s mandate, role and achievements. For the avoidance of doubt, NIRSAL is a policy tool of the Central Bank of Nigeria deliberately designed as a self-sustaining company with the sole aim of achieving the public good by catalyzing and guaranteeing private finance and investment to the agricultural sector.
NIRSAL’s operations are characterized by the highest standards of good governance and professionalism and these are delivering solid dividends to the agricultural sector and the national economy as can be seen below:
NIRSAL is an investee company of the CBN, a going concern incorporated under the Companies & Allied Matters Act (CAMA) and governed by all standard governance and reporting rules of public liability companies applicable nationally and globally.
Following from the above, NIRSAL files its annual financials every year at the CAC as required by the Companies and Allied Matters Act. Therefore, NIRSAL operates by the highest standards of corporate governance rules coupled with capital preservation and capital growth objectives in order to maintain a robust balance sheet against which it issues its guarantees, provides technical assistance and builds capacities and incentivizes borrowers and lenders in the agriculture finance space.
NIRSAL’s accounts are prepared in accordance with the International Financial Reporting Standards and audited by Board-approved independent auditors.
NIRSAL’s Board comprises a broad spectrum of respected high profile professionals representing the CBN, Bankers Committee (CEOs of DMBs in Nigeria), the Organized Private Sector (OPS), the Federal Ministry of Agriculture and Rural Department (FMARD).
NIRSAL’s operations are solely funded from earnings derived from its meticulously invested seed capital. And, as a result of astute management of its finite resources by its Management, NIRSAL has not only retained its original investment capital but has also more than doubled its balance sheet while
paying its staff salaries and covering its operating expenditures without recourse to any external source of funding. This is a testament to the prudence exercised by the current leadership of NIRSAL.
It’s also to the credit of NIRSAL’s Management that it has maintained a very healthy crystallized Guarantee ratio of about one percent on its Credit Risk Guarantees against the financial industry average that at a point reached 17%.
The bottom line is that NIRSAL is doing justice to its core mandate of serving the public good 100% while preserving and growing its balance sheet.
It is incontrovertible that in just three years, with the robust support of the CBN, NIRSAL has set up strong processes and structures including offices across the country and global partnerships, facilitated significant funding to the agricultural sector and made measurable impact on the lives of hundreds of thousands of beneficiary farmers and other players along the various agricultural value chains.
NIRSAL has made measurable progress in reducing the risks to financing institutions while granting agricultural loans by building the capacities of both banks & investors and agricultural value chain actors on good practices in agricultural production, financing, loans/investment utilization and repayment.
NIRSAL has facilitated funds in excess of N85.5 billion for various agriculture sector projects from various sources as at Q3 2018.
Broken down, this translates to the following investments: Agricultural Inputs: N43.8 Billion; Mechanization: N1.7 Billion; Primary Production: N19 Billion; Processing: N20.9 Billion.
Interms of broad impact, this translates to 373,752 direct jobs and 1.8 Million indirect jobs facilitated by NIRSAL.
Having completed our corporate establishment phase within the last 3 years, the agriculture finance space, from 2019 and beyond, should see a rapid scale out of NIRSAL’s interventions on 15 Industrial, Export, Domestic Consumer, Youth-specific and Livestock Agricultural Commodity value chains in Nigeria.
Our core inspiration continues to be the Federal Government’s focus on the agricultural sector and the targets set out in the Economic Recovery and Growth Plan and the Agriculture Promotion Policy.
We also owe our accomplishments, sound fundamentals and rigorous processes to the leadership provided by the Central Bank of Nigeria under Mr. Godwin Emefiele.
While there is still a lot to be done, there is no doubt that we have made definite progress in delivering our core mandate to enable the flow of affordable financing and investments to all players across entire agricultural value chains.
Our focus on improving community and individual lives along the many agricultural value chains that we are working on remains strong. And we will keep working — harder – with all partner organizations to deliver more measurable results.
That is our pledge and our commitment.
-Additional report by Per Second News