Mohammed Salisu Bako prides himself as the town crier of the Kauyen Garba community in Ringim Local Government Area of Jigawa State. He was excited when a delegation from the ‘federal government’ visited them in 2018 with respect to a proposed pilot wheat project for rural farmers.
They were made to understand that the multi-billion naira project aimed at changing the lives of 20,000 smallholder farmers in Kano and Jigawa states was initiated through the Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL) to provide solutions well suited to fix issues along the wheat value chain.
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The NIRSAL wheat project was also intended to see 20,000 smallholder farmers in the selected areas make earnings of N350,000 over a 4-month cycle using mechanised systems of farming, among others, they were informed.
Being a farmer himself, Bako actively took time to sensitise other residents, particularly the over 50 farmers that were earlier screened and selected for the project in his community.
Ringim and Hadeija were the local government areas chosen for the project in Jigawa State.
But as it turned out, Bako’s excitement was short-lived.
“When they came in 2018 they said they were from the federal government, which gave us confidence in the proposed wheat project. But that was the last time we saw or heard from them because they never came back. The promises they made, such as digging of wells and provision of tractors for the project were unfulfilled. Even those whose farms were hired were not settled,” he said.
While appealing to the federal government to revisit the issue and make corrections, Bako said, “If this wheat project was meant to assist rural farmers as they claimed when they came in 2018, let the government ensure that justice is done”.
Speaking in the same vein, Raaya Alhaji Idi, a 65-year-old farmer in Kauyen Garba, said he was among those chosen for the wheat project but became disappointed because it turned out to be a hoax.
“After making my farm available for the project, they promised me fertiliser and a well as source of water and other input for the wheat plantation. But I never saw any of these thereafter. They never came back or communicated to us through anybody from this community. Indeed, we were scammed,” Idi said.
He also called on the federal government and relevant authorities to revisit the matter to ensure that those involved in the failed wheat project were made to give proper account.
Another farmer, Musa Mohammed said the federal government had come with a director and assembled farmers, with a promise to assist them.
“It turned out to be an empty promise because no farmer was assisted; the wheat project did not happen. They paid nothing to the over 50 farmers that were selected in this community,” he said.
Elsewhere at Hago, a sprawling community in Hadeija Local Government Area of Jigawa State, the community leader, Musa Ayuba, recalled that when the delegation came for the wheat project in 2018, farmers were asked to lease out their farms with the promise that they would be assisted.
“They were also told that after harvesting the wheat, the profit would be shared and each participating farmer would get a high percentage. They also promised to pay for the cost of hiring farms per hectare.
“But by the end of the day they left without coming back, leaving all these promises unfulfilled. Although they started something, there was no water to proceed with the farming and farmers did not get the expected benefits of the wheat project,” Ayuba said.
Similar complaints were raised by farmers at Garun Malam, Ajingi and Kura local government areas in Kano State, where the wheat project was also expected to take place.
Speaking on the matter, a farmer at Garun Malam, who wouldn’t want his identity revealed said, “They came here and measured our farms. They also promised that the proceeds of the wheat project would be shared between them and us. This made us lease out our farms, but by the end of the day we never saw them again.”
How N5.6bn wheat project was initiated
Although the N5.6billion cultivation-to-harvest of 20,000 hectares of dry season wheat in Kano and Jigawa states was said to have been initiated by the NIRSAL in 2018, its managing director, Aliyu Abdulhameed, denied this, saying it was not designed to initiate any project.
However, his former senior technical adviser, Oluwatosin Ariyo, was said to have planned and coordinated the ‘failed’ dry season wheat project in Kano and Jigawa States.
When contacted on telephone, Ariyo also denied involvement, saying it was handled by the African Development Bank (AfDB).
But a 2018 NIRSAL Wheat IAPD Pilot Project Charter seen by Daily Trust on Sunday reads: “The purpose of this project is to prove that Nigeria can become self-sufficient in wheat production, and therefore, does not need to spend the estimated US$4.5million annually on wheat importation. Information from research carried out for this project informs that Nigeria can produce wheat profitably if intervened properly. The challenges attributed to wheat production through the oligopolistic power of major millers will be adequately resolved through the successful implementation of this project.”
Similarly, a 2018 NIRSAL Wheat IAPD Project Consolidated Report (North-West zone: Kano and Jigawa states) reads: “The NIRSAL Wheat IAPD Pilot Project is particularly of high importance because of its potential positive impact on Nigeria’s economy once proven that local wheat can be produced profitably and fit for milling into high-quality white flour for the Nigerian consumer market.”
An agreement prepared by the NIRSAL project development team in 2018 also reads: “The NIRSAL project team intends to implement a profitable wheat production pilot project in Kano and Jigawa states. The proposed intervention will support smallholder farmers by providing technologies that will yield maximum output. Furthermore, the major challenge of off-take in the value chain will be addressed by the introduction of compact milling systems, which will guarantee the off-take of wheat produced from the 20,000 hectares of land cultivated.
Documents seen by Daily Trust on Sunday indicate that three private companies had agreed to invest in the primary production of wheat while sharing profit with the farmers at harvest, with the investors expected to get 30 per cent of the profit while the farmers were promised 70 per cent.
The companies are Mainframe Agricultural Investment Limited, Forest Hill Agricultural Development Limited and Woodfarm Agricultural Limited.
They were said to have taken advantage of the federal government’s initiative on piloting wheat production in Nigeria, and after getting technical assistance from the African Development Bank, they approached their bank (Keystone Bank) for a loan, which was guaranteed by the NIRSAL for the execution of the project.
However, it was gathered that of the 20,000 hectares financed for the wheat project, only 400 hectares were actually cultivated representing a mere 2 per cent. This implies that at N280, 000 said to be the average standard funding amount adopted by NIRSAL on almost all of its grain programmes, only about N112million of the project sum was actually disbursed to the farm sites in Kano and Jigawa states.
Accountability questions
Almost four years after, questions have been raised about the utilisation of the remaining N5.488 billion or 98 per cent of the total project sum, even as NIRSAL’s top management staff, in cahoots with the three companies financing the loan, allegedly perfected an act of round-tripping the loans meant for farmers.
It was gathered that considering that the multi-billion naira wheat project was not hinged on NIRSAL’s Anchor Borrowers Programme but rather on a corporate participation programme, officials involved in the planning realised that NIRSAL’s operating guidelines had a single obligor limit, which does not allow for a single company to be supported to execute a N5.6 billion project.
To get around this impediment, the planners were said to have engaged the three companies, which then split the total sum of the project into three, with respective amounts not exceeding the single obligor limit of NIRSAL, findings by Daily Trust on Sunday reveal.
The arrangement was for the three companies to work out for respective agricultural instrument facilities with a commercial bank, which they did to execute the 20,000-hectare wheat programme, it was gathered.
Aside guaranteeing up to70 per cent of each of the instrument facilities but not more, NIRSAL’s role, as contained in the agreement, was to also use its Interest-Drawback principle to offset a certain percentage of the interest paid by the borrower to the lending bank so long as the borrower was quarterly up to date with its loan obligations.
Audit inquiry
It was gathered that Keystone Bank offered the instrument facilities to the participating companies as an agricultural facility for a wheat production programme.
The participating companies, it was gathered, approached the NIRSAL for its dual role of guaranteeing such loans, as well as for the application of its Interest Drawback principle following which the NIRSAL got involved, and then, Keystone began its disbursements to the participating companies.
However, after a short length into the fieldwork for the wheat production in the two states was set to commence Keystone Bank was said to have observed actions, which could be viewed as potential infringements of the agreements entered into between it and the three companies, variously.
Consequently, Daily Trust on Sunday gathered that in July 2019, Keystone Bank stopped further transfers of funds between Forest Hill and its other partners following ‘breaches’ discovered after an audit inquiry into its dealings with the three companies.
For instance, Forest Hill was said to have requested Keystone Bank to transfer from its account, the sum of N543million to Mainframe to cover expenses incurred on behalf of Forest Hill on the wheat project.
But in its audit query, a copy of which was obtained by our reporter, Keystone Bank noted that although Forest Hill had mentioned that it had cultivated and harvested 1,060 hectares of wheat in the initial planting season, which ended in April 2019 in line with the approved transaction cycle, “the sales proceeds for the harvested wheat did not reflect in its bank account with the bank”.
This, it noted in the query, violated the irrevocable letter of domiciliation executed by Forest Hill, to the effect that all proceeds of the wheat in this programme shall be deposited in its account domiciled with Keystone Bank.
“This means that Forest Hill either did not sell the harvested wheat or it sold but diverted the proceeds from Keystone Bank. This is a gross violation of the terms of agreement between the bank and Forest Hill,” the audit query reads.
Unmasking the investor companies
Details of the three companies involved in the Kano and Jigawa wheat project obtained by Daily Trust on Sunday from the Corporate Affairs Commission (CAC) indicate that they were curiously registered on the same day, August 20, 2018; the very year the wheat project was initiated.
Also, all three companies were registered as private entities limited by shares and had their addresses at locations in Lagos.
While Forest Hill Agricultural Development Limited, with registration number, 1519791, gave its official address at Apartment 6, Amethyst Block, Victory Park Estate, Lekki, Ibeju-Lekki, Lagos, Mainframe Agricultural Investment Limited, with registration number, 1519727, gave its address as H18, UPDC Estate, Lekki, Ibeju-Lekki, Lagos.
Woodfarm Agricultural Limited, on the other hand, with registration number, 1519755, gave its registered address as 161C Building A, Rafiu Taylor Close, off Idejo Street, Victoria Island, Eti-Osa Lagos.
Further checks indicate that Forest Hill, which was registered with nil business activity, had two directors: Bernard Emeka Taiwo and Adeola Olufunke Deji-Olowe, who doubles as secretary, while Woodfarm also had two directors: Simeon Oladayo Olarenwaju and Oladipupo Olufemi Wintoki, who doubles as secretary.
For its part, Mainframe had Magaji Buba (who doubles as secretary) and Faith Ayobola Daramola as directors.
There were no official activities going on at the address provided when Daily Trust on Sunday visited, but when contacted, a director with Forest Hill Agric Development Ltd, Mr Emeka, claimed that the company had since executed the pilot NIRSAL wheat IAPA project in Kano and Jigawa states. He, however, declined to give further details.
A visit to the Plot 161 C building at Rafiu Taylor Close, off Idejo Street, Victoria Island, Lagos, indicated that there was no sign of Woodfarm Agricultural Ltd, even as a security man said there was no such company there.
However, Mr Oladipo Olufemi, one of the directors of the company who was contacted on phone said he could not confirm whether the project was actually executed or not.
Explaining that he was not a management staff but a director, Olufemi, who said he was outside Nigeria, added that the board of the company had been having their meetings virtually since the advent of the COVID-19 pandemic.
Efforts to locate Mainframe Agricultural Investment Ltd at No 18, UPDC Estate, Ibeju Lekki, were not successful, but when contacted on phone, one of the directors identified as Magaji Buba claimed that he was not aware of the project.
Petitions dog NIRSAL
Findings by our reporter show that there were a series of petitions alleging corrupt practices at the NIRSAL, including the issue of alleged diversion of the N5.6billion meant to finance the wheat project in Kano and Jigawa states.
Confirming the petitions, the NIRSAL managing director, Abdulhameed, denied the allegations, saying they were masterminded by faceless individuals to tarnish the image of the organisation.
Checks by Daily Trust on Sunday show that among the agencies that received petitions against the NIRSAL are the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and other Related Offences Commission (ICPC), the State Security Services (SSS), and the Nigerian Financial Intelligence Unit (NFIU).
Curiously, NIRSAL’s managing director had written to the attorney-general and minister of justice seeking intervention on what he termed “unwarranted and multiple investigations of NIRSAL Plc by law enforcement agencies”.
In the letter referenced NIR/MD/GEN/TAPD/24/20/03 and dated January 29, 2020, he requested the attorney-general to “intervene in the ongoing investigation of NIRSAL by security agencies.”
In the same vein, the office of the attorney general, through the Department of Public Prosecution of the Federation, wrote to the Nigeria Police Force, asking it to proceed with their investigation, while directing the other anti-corruption agencies to suspend theirs.
The letter, with reference number: DPPA/NIRSAL/110/20, and dated February 4 reads: “After a careful study of the petition, we found that the NIRSAL is being investigated by several agencies, to wit: the police, ICPC, SSS and the NFIU in respect of the same subject matter, which is not only an unhealthy competition among the agencies of the same Federal Government of Nigeria but a sheer waste of government’s resources.
“In view of the foregoing, you are requested to conclude your own investigation on the matter and forward the outcome to the Office of the Attorney-General of the Federation for legal advice and further necessary action. All other agencies investigating the matter are to stay further action to allow your office to have total control of the investigation.”
It was also gathered that earlier in 2017, the NIRSAL had written to the Office of the Attorney-General seeking clarification on the institution’s legal status on being subjected to oversight by relevant government agencies.
The letter, dated October 5, 2017, was titled, “Legal Status of Nigeria Incentive-Based Risk Sharing System for Agricultural Lending (NIRSAL Plc)”.
In response, the Office of the Attorney-General of the Federation, via a letter signed by the director, Solicitors Department, Z. S. Adeyanju, with reference number LE/S.1/93/1 and dated January 16, 2018, stated: “The NIRSAL is a private-public limited liability company registered in the CAC. Consequently, every form of interference by federal government agencies, which is not naturally imposed on other private companies of coordinate status, should not be imposed on your company.”
AGF reacts, as police keep mum
Although the Office of the Attorney-General and Minister of Justice said the police had concluded an investigation into the matter, the Force Headquarters declined to speak when contacted.
The spokesman of the minister of justice, Dr Umar Gwandu, said the police that were asked to coordinate the investigation undertook the responsibility of the assigned task.
“The investigation has been completed and the report shared and is being studied by relevant government agencies,” Gwandu stated in an emailed response.
Asked why the police were assigned the responsibility of investigating petitions on alleged corruption while the statutory anti-graft agencies were asked to stand down their investigation, Gwandu said: “The Attorney-General of the Federation and Minister of Justice did not ask that the agency (NIRSAL) should not be investigated. The matter has been in the public domain since last year.”
However, the Force Public Relations Officer, Frank Mba, who initially promised to get details on the investigation from the relevant department and get back to Daily Trust on Sunday failed to do so. Several calls and reminder text messages sent to him were ignored.
We don’t initiate projects— NIRSAL MD
Responding to the issues raised with respect to the Kano, Jigawa wheat project, the managing director of the NIRSAL denied involvement, saying it was not a federal government project but a private investor initiative.
He said the NIRSAL did not initiate the project, rather the three companies involved, adding that they (companies) executed it successfully and paid back the loans as guaranteed.
Abdulhameed, however, said the total amount guaranteed by the NIRSAL for the Kano, Sokoto wheat project was N3.9billion, adding: “They went and did their project successfully and paid back the money as the banks wrote to us.
“My own is that should the companies fail, that is when I would pay the guarantee, but the project was completed successfully, so I did not pay any guarantee,” he said.
He said someone sat down somewhere and created the N5.6million wheat project more than two and a half years ago in order to malign the NIRSAL.
“It is in all the social media platforms in Nigeria. I was even confronted on this by all the media in the country. The US Embassy has it; and for your information, it is part of 25 allegations created against the NIRSAL. Among other things, they wrote that I am an ex-convict. I am sure they will come to you with the other allegations that were designed with fake documents.
“It got to a point where we came under investigation by five agencies at the same time under this matter, but eventually, sanity prevailed and the federal government decided that one of the organisations should go ahead with these investigations and provide their report. So the federal government took over and did an investigation for one year and four months through the police.
“However during the course of investigations, the allegations were found to be baseless,” Hameed said but failed to avail Daily Trust on Sunday of a copy of the report, saying it was a classified document.
Who owns NIRSAL?
Established in collaboration with the Federal Ministry of Agriculture and Rural Development (FMARD) and Nigerian Bankers’ Committee in 2013, NIRSAL’s mandate, as contained on its website, is to stimulate the flow of affordable finance and investments into the agricultural sector by de-risking the agriculture & agribusiness finance value chain, fixing agricultural value chains, building long-term capacity, and institutionalizing incentives for agricultural lending through its five (5) strategic pillars, namely: Risk Sharing, Insurance, Technical Assistance, Incentives and Rating.
Although the managing director claimed that the NIRSAL was neither owned nor funded by the federal government or designed to initiate any project, our findings show that it is fully owned by the Central Bank of Nigeria (CBN) and is funded by taxpayers’ money.
According to information on its website, the NIRSAL is a US500million non-bank financial institution wholly owned by the CBN, which was established in 2013 in collaboration with the Federal Ministry of Agriculture and Rural Development and the Nigerian Bankers’ Committee.
“The NIRSAL is never funded one kobo by the Federal Government of Nigeria or the CBN; it is a public liability company. We were created under the Companies and Allied Matters Act (CAMA), not under a parastatal or public service,” the managing director said.
But our reporter obtained CAC documents which indicate that the NIRSAL is a public liability company 100 per cent owned by the CBN. This is further affirmed by the Board resolution of the NIRSAL on March 13, 2017.
It was also gathered that while the CBN owns about 99.8 per cent of the institution, NESI SS LTD, a vehicle created and owned by the CBN for the purpose of improving payment discipline in the Nigeria Electricity Supply Industry (NESI), owns the remaining 0.2 per cent of the NIRSAL.
Further clarity on the status of the NIRSAL as a government-owned institution is also available on its website. The “Who We Are” section of the website, reads: “NIRSAL is a US$500million non-bank financial institution wholly-owned by the CBN, created to redefine dimension, measure, re-price and share agribusiness-related credit risks in Nigeria.”
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