Contrary to the bank’s touted mandate of the provision of credit to support all activities in the Agricultural Value Chain, customers who go to the Bank of Agriculture may not have had any access to loans in the past four years. The situation is worse in the branches of the bank situated in the southern part of Nigeria.
Ejiro Michaels is a livestock farmer who cultivates catfish and chickens. Before 2015, he had a blossoming and mutually-beneficial relationship with his BoA branch, but “the loans ceased to come from about three years ago, despite the fact that I had met all the loan conditions, as I always had, prior to that period.
Michaels says customers were simply told by the branch manager that there was no further release of funds from the head office, and that the branch had been told to go and recover all outstanding loans before they would be given any fresh funds from the head office.
Inside sources in the bank say the funds that should be deployed as loans to customers is what is being used for recurrent and administrative costs. For instance, they allege that the bank, despite its lean purse, gives about N20 million each to its executive directors to buy cars in their personal names even though they carry BoA number plates. When they leave, they take away these cars and this has been the practice with successive executive directors.
It is this drain on the bank’s resources that has adversely affected farmer-customer patronage, as only a few farmers still visit the affected branches, a sharp contrast from when business was booming and the bank attracted huge crowds. One of the bank’s senior officers, who would not be named for fear of victimisation, told the BUSINESS EYE that his branch used to attend to 200 farmer-clients and above each day in the hey days, who either brought in savings or came in to obtain loans, and were put in groups of 10 or 20 for the latter purpose, but now, “hardly do we have five clients coming in for business, mainly to save, since the loans dried up nearly three years ago. With customers dwindling, the ability to mobilise savings by the affected branches has been adversely affected too. Only the Central Bank of Nigeria (CBN) Anchor Borrowers Scheme, which is not exclusive to the BoA, has been disbursed and mostly in branches in the northern states,” another ratter that irks customers and staff of the bank. He added that loan disbursements by the bank has been largely skewed, as one branch in one of the states in the northern part of the country collected N13 billion for rice alone, while the entire South East, South South and South Western zones had less than N3 billion to disburse in the same period.
This has adversely affected the branches in the southern and north-central zones, especially with the introduction by the bank’s sustainability policy. The policy expects each branch to pay its staff salaries from the income it generates. When these branches do not give out loans, it becomes difficult for them to earn profits.
Remi Olaoye, Head, Corporate Communications for the bank, however, says there is nothing untoward with the way the loans have been distributed.
“It is untrue that they have not been making loans. Just like you have the pool of funds available to the Universal Basic Education Commission (UBEC) with conditions, there are also conditions to draw on the funds available to the BoA. If you don’t meet the conditions, then it’s nobody’s fault that you won’t be able to draw down on the funds,” Olaoye said.
“When the CBN’s Anchor Borrowers’ Programme was made available to all states, if a state government refuses to key into the programme, it’s not BoA’s fault. BoA is simply a channel for the funds.”
Olaoye says the real problems in many of the branches complaining are the size of their non-performing loans. He says, even though the bank has reduced the size of its operations, so logically, the size of its loan portfolios would have gone down, yet a bigger problem is the huge debt size. “Ask these insiders making these allegations what the percentage of their non-performing loans is,” Olaoye said. “This is a major determinant of the income they make. They probably have a high proportion of non-performing loans.”
The challenge of low-income generation was the reason for the sustainability policy in the first place, and this was seven years ago. According to the Olaoye, “The Bank of Agriculture is a limited liability company incorporated in 1972 and wholly owned by the Federal Government. Since its incorporation, it is not funded from the Treasury; it is expected to generate income and cover its overhead costs.
“These challenges and the very low recovery rate of our loans have hindered the ability of the bank to generate sufficient income to cover its overheads and remain viable. Each outlet location of the bank, therefore, is expected to generate its own income to cover its overhead costs. Unfortunately some locations have not been generating adequate income to cover their overhead costs, and therefore rush to the head office for bailouts,” Olaoye said.
The result of this is that in some branches, especially in the north-central zone, consisting of Abuja, Kogi and Kwara, staffs have not received their salaries for upwards of seven months and more. “You can check on this; that the head office staff have collected their salaries for March by now (April 2018) and also collected their upfront loans for rent since January this year, while we at the branches were yet to collect ours as at the end of March,” one staff told The BUSINESS EYE. The areas largely affected by the long salary delays are in the north-central zone, the South East, South West and the South South.
In addition to the non-payment of salaries is the complaint of poor salaries even for some staff in senior cadre. “From the principal managers down, the salaries are very poor. Only AGMs and above enjoy good salaries at BoA. We would have left, but for the fact that there is no option. It may surprise you that the domestic allowances of an AGM and above is higher than the salary of a principal manager here, and to cross from a principal manager to an AGM is highly political. I can tell you authoritatively that a principal manager in the bank does not earn up to N200, 000 monthly,” the source lamented.
Attempts to obtain first-hand information from the Lagos Island branch of the bank proved futile, but an analysis of the loans disbursements figures made available by the bank’s head office to the BUSINESS EYE, including special projects not funded directly by the bank, revealed that, of the N53. 53 billion disbursed by the bank since it commenced business in 1973 till date, the three northern Zonal offices of Abuja, Bauchi and Kano made N38.66 billion or 72 per cent, while N14.87 billion or 28 per cent were disbursed by the three southern zonal offices of Enugu, Ibadan and Port Harcourt (please see table).
Recruitment and staff welfare
But empty coffers are not the bank’s only problems. Inside sources at the bank allege that, since 2015, the Federal Government had not opened recruitments for the bank, yet recruitments and postings are done at the its Head Office in Kaduna, through the back door rather than through a competitive recruitment process.
“Letters are simply given by the high and mighty to favoured candidates, and they are recruited and posted, not minding whether they are fitting for such postings or not. If not, ask them at the head office how people have been recruited since 2015, despite the Federal Government restriction on employment,” a source at the bank said. Olaoye refused to respond to this, saying he would not be dragged into discussing the matter without specifics.
But he was willing to speak on the issue of the alleged huge disparity in salaries payment.
“As it is the case in all organisations, there is hierarchy of positions that links to commensurate responsibilities, therefore, it is not surprising that an AGM who is a management staff earns more than staff of lower rank.” However he would not provide actual figures of remunerations of AGMs and Principal Managers, as he said this was personal and confidential information.
Staff at the bank say that the problem of poor remuneration is further compounded by a skewered staff promotion process, claiming that ‘unconnected’ staff, especially those in the branches, have not been promoted for as long as 10 years or more, while staff at the head office or those with godfathers are promoted bi-annually.
“This has had the effect that some favoured erstwhile juniors are now seniors to their previous bosses, therefore killing staff morale, especially in the branches, which are regarded as the real profit centres for the bank,” says a staff of the bank that is affected.
“In the last promotion exercise, only three members of staff were promoted in the whole of the South West zone. The management would write you that you passed the promotion examination, but that there is no vacancy, while there are always vacancies for our juniors from the Northern part of the country.
“I personally spent 12 years here without a single promotion. That is the kind of problem we face working as southerners here. Some of us have spent up to 15 years on one spot in the bank,” says the source that also alleges that promotions in the bank are sold. “Some paid as much as N400, 000 to a certain clique in the human resources department in the head office to have their promotion files treated, and this happened mainly between 2012 and 2015. We just wouldn’t want to mention names, because the concerned officers are still within the bank, though no longer in the Human Resources department. There is huge corruption going on at the BoA, which needs the urgent attention of the EFCC,” said the source.
Olaoye denies this allegation: “It is important to note that promotions are purely based on performance through frequent appraisals that are carried out across board. Promotions are on merit, based on performance carried out in accordance with due process and rules and regulations of the bank. The allegations of certain sections of the country being favoured or staff buying promotions are frivolous, baseless and unfounded.”
He challenged the affected staff to name the specific person(s) who asked them for the N400, 000, insisting that he also had gone through a long while without a promotion for the simple reason that there was no vacancy. “Promotion is a function of vacancies and what the bank can fund. Since we have scaled down on our operations, opportunities for promotions have equally reduced. Also to say that the Head Office staff have more promotions than branch staff is a lie. Why don’t they just give specifics?”
Statistics collected by BUSINESS EYE from the Bank of Agriculture head office appear to support Olaoye’s claim. An analysis of the data showed that the total number of staff promoted in the last exercise in 2014 were 222. Of these, head office staff had 55 promotions or 25 per cent, while the northern zonal staff members promoted (i.e. comprising the North East, North West and North Central zones) totalled 70 or 31 per cent, and the southern zonal staff members promoted (comprising the South South, South West and South East zones) were 97 or 44 per cent (please see table).
With regards to the complaint by those who spoke to the magazine that managing directors of the bank had mostly been from the northern part, checks by BUSINESS EYE showed that, of the 13 managing directors of the bank since the position was indigenised in 1977, eight have come from the North, while five have come from the South (please see table).
Further checks on the Bank’s website showed that, of its current top executive members, only two (the Managing Director and the GM, Branch Management) were from the North, while five (ED, Services & Strategy; ED, Credit and Business Development – South; ED, Credit and Business Development – North; PM, Zonal Management South South, and the PM, Ag. Zonal Manager South East) were from the southern part of the country.
Olaoye is worried that staff want to reduce the appointment of executive management to an ethnic thing. “It is about expertise and qualification,” Olaoye said, “not ethnicity.”
Still, staff of the bank that spoke with the magazine are not pleased that the staff union, which ought to be the gadfly for the staff, also appears not to be doing so. They claim that the union has been compromised and is unwilling to fight to better the lot of the bank staff.
They also claim that the election that brought in the Staff Union president, who is from the same town as the Managing Director, Kabir Mohammed Adamu, was rigged. “Bribes were given in form of cash to the delegates to influence them,” the source said
Olaoye says the allegation is untrue. “As for the Union, Management does not interfere in their activities, but rather engages them in order to improve the bank’s operations and by extension, staff welfare.”
The BUSINESS EYE’s attempt to speak to both the former president of the union, Ade Martins, and the Zonal Manager of the BoA in the South West, Idiat Folorunsho, were not productive as both of them declined to speak, saying they were located in branches, and only Head Office staff in Kaduna could respond for the bank.
The Bank of Agriculture Limited is the nation’s foremost agricultural and rural development finance institution. It was incorporated in 1972 as Nigerian Agricultural Bank (NAB), and commenced operations in 1973. In 1978, the name was changed to Nigerian Agricultural and Co-operative Bank Limited (NACB) to reflect the inclusion of co-operative financing into its broader mandate. In October, 2001, following the Federal Government’s effort to streamline the operations of its agencies that were believed to be performing overlapping functions, three institutions: Nigerian Agricultural and Co-operative Bank Limited (NACB), People’s Bank of Nigeria (PBN) and the risk assets of the Family Economic Advancement Programme (FEAP) were merged to form Nigerian Agricultural, Co-operative & Rural Development Bank Limited. In October 2010, following the rebranding of the bank to reflect its institutional transformation programme, the bank adopted the new name Bank of Agriculture Limited (BoA).
The Federal Government of Nigeria wholly owns the bank with its shares held by the Central Bank of Nigeria (CBN) (40 per cent) and the Federal Ministry of Finance Incorporated (MOFI) (60 per cent). It is supervised by the Federal Ministry of Agriculture. It has an authorized share capital of N50 billion.
But the magazine’s sources say the bank is not meeting its goals, especially because it has an absent top management. “The executive directors, who had been appointed over one year now, hardly come to their offices in Kaduna, but rather prefer to stay in Abuja. How can they make sure the bank is doing well?” they queried.
Olaoye tries to explain the seeming absence of the executive directors at the head office. “We intend to improve on stakeholder relationship as a way of resolving most of the challenges facing the bank. Therefore, the new management produced a strategic work plan that assigned responsibilities to members of the Executive Management that consisted of restructuring of the bank, review of processes, attracting investors and development partners, all with a view to improving the incomes of the bank. These assignments are being carried out within the country and outside, and require consistent follow-up with stakeholders,” Olaoye told the magazine.
The Bank of Agriculture has as its goal the provision of credit to support all activities in the Agricultural Value Chain, as well as provide non-agricultural micro credit to poor segments of the society comprising rural artisans and petty traders. The hope is that it will smarten up its operations and help reinvigorate the economy by meeting its goals and objectives and delivering on its mandate.