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How the United States plans to control the African Development Bank

An illustration of the new cold war that the United States and China are waging within institutions and international donors.



e-Learning Platform, Africa Development Bank. AfDB develops Index to aid women empowerment , African Development Bank awards $1.1 million to boost food production in Africa , AFDB increases capital to $208 billion in bid to secure Africa’s future , African Investment Forum: AfDB eye $67 billion deals , ECOWAS backs Adewunmi Adesina’s re-election as AfDB election nears , AfDB bows to pressure from U.S., orders an independent probe of Akinwumi Adesina, Fitch rating agency affirms AfDB's AAA rating with stable outlook, Digital Nigeria e-Learning Platform registers 16,000 users in 24 hours - African Development Bank

The economic and trade war between the United States and China is opening up front lines in Africa. After openly neglecting the continent at the start of Donald Trump’s mandate, the US administration is working hard to block Chinese expansion and regain abandoned market shares. This is a strategy developed by the shadow advisers of the American president since 2017.

In this fight, the takeover of financing levers on the continent is a priority for the Americans, with the African Development Bank (AfDB) as a major target. In this context, is its president Akinwumi Adesina a pawn to be released?

*Adesina, a stone in the shoe of American influence?*

Engaged in a lip-service campaign to win a second term at the head of the African Development Bank at the end of August, Akinwumi Adesina has been plunged into the heart of a fight that is beyond him. Of course, the Nigerian remains the only candidate for his own succession. And even if he can avail himself of the support of the African Union, he will not obtain the easy victory that everyone promised him, essentially due to the economic and commercial rivalry between the United States and China raging across Africa. In this fight, to control the decision-making and financing levers on the continent, the AfDB, and therefore the president who directs it, are major issues for the American camp.

READ MORE: Here is what Akinwunmi Adesina said about allegations against him

*The Trump administration’s strategy of winning back?*

Since coming to power in January 2017, Donald Trump has seemed to ignore Africa. So far, the American president has received only two heads of state from the continent at the White House. This is unprecedented. Worried about the omnipresence of Beijing on the continent and the loss of Washington’s economic influence on the ground, beginning in 2018, the advisers of the Trump administration concocted a strategy of reconquest to counter China in Africa .

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*A slow work of persuasion begins with regard to the American president and turns into obsession in the ranks of the neoconservatives*

Ironically, the offensive was designed and led from the start by the hawk John Bolton, then-National Security Advisor

The American conservatives are very worried. From 178 billion dollars in 2016, the volume of trade between China and Africa reached 186 billion dollars in 2018, and exceeded the symbolic mark of 200 billion dollars in 2019. Even if the objective announced by Beijing in 2014 to aim for 400 billion dollars in trade by 2020 is proving unrealistic today, the inexorable and rapid upward trend in trade between China and Africa is irreversibly written.

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This is quite the opposite of trade relations between the United States and the continent.

READ ALSO: African Development Bank joins Nasdaq sustainable bond network

*Attack through commercial means*

The cornerstone of the American trade strategy on the African continent, the AGOA (law on growth and opportunities in Africa) has a poor record for its 20 years in 2020. Launched in 2000 under Bill Clinton, AGOA offers duty-free entry into the American market for 6,500 African products (petroleum, agricultural, textiles, handicrafts, etc.). Thirty-nine predominantly sub-Saharan countries benefit from it. AGOA goals? Help diversify trade with the continent and promote industrialization in sub-Saharan Africa.

However, petroleum products continue to represent two thirds of American imports. According to USAID figures, bilateral trade between the United States and the United States quadrupled from 2002 to 2008, to reach 100 billion dollars. But Africa trade is crumbling. It fell to $ 39 billion in 2017, only to rebound slightly to $ 41.2 billion in 2018, mainly due to the United States’ energy self-sufficiency.

Meanwhile, over the past five years, US exports to sub-Saharan Africa have stagnated on average at $ 19 billion per year. With $ 54 billion in foreign direct investment in Africa, the United States is still ahead of China in this area.

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However, Chinese domination in Africa is a snub for Uncle Sam. Little by little, advisers will convince the American president to look beyond the borders of the United States. The Vice-President of the Center for Strategic and International Studies (CSIS), Washington, and the President, of the Sub-Saharan Africa Advisory Committee for the Export-Import Bank of the United States United (Exim), Daniel Runde, among others, feeds the Trump administration’s perspective on the economic engagement of the United States in the world, in particular in terms of development.

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READ ALSO: AfDB agrees to the review of ethics committee’s report on Akinwumi Adesina

*Go through development institutions, including the AfDB*

Countering China in Africa, by relying on development institutions, has become an end in itself. In a memo titled “The Trump Administration Will Eventually Lead the Bretton Woods System,” Daniel Runde wrote in mid-2017 that “the United States will seek to have a say in the upcoming appointments of the heads of the multilateral banks of development.

In October 2017, Steven Dowd, the current Executive Director of the AfDB who is the representative of the United States at the Bank and the chairman of the audit and finance

committee of the pan-African bank, confirmed this desire. “I will leverage the US financial contribution to the bank to ensure that it is best used for Africa and serves the interests of US foreign policy there.” […] I will endeavor to open Africa to American investments and know-how.” This close friend of Daniel Runde then made the promise to American senators in order to get the post with the AfDB.

In October 2019, Daniel Rundee, a Republican loyal to Donald Trump, specified the interest of the Americans in controlling the AfDB to halt Beijing’s long march on the continent. “The AfDB is an alternative to engaging in Africa that is not led by China and it can help reframe Africa as a tremendous economic opportunity. ”

In a charge against Adesina carried in a column on the American online site ‘The Hill’, the message is clear. The writer, Daniel Rundee led a charge against the management of the bank by Akinwumi Adesina, its president. Runde insisted on his lack of transparency and his support for authoritarian regimes, in particular by organizing the AfDB’s annual meetings in Malabo (Equatorial Guinea), in June 2019. “Anyone who has read the classic book Tropical Gangsters will recognize that the government of Equatorial Guinea is probably one of the most corrupt in the world”, asserted Daniel Runde.

The offensive had already accelerated following the appointment of Tibor Nagy in July 2018 as US Assistant Secretary of State for African Affairs, a post left vacant for several months. On March 3, at the United States Embassy in Kinshasa, he began his speech on what “the Trump administration in Africa should do: counter China’s narrative and clearly show that the breadth and depth of the United States’ engagement in Africa is second to none.”

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On the ground, Tibor Nagy could count on the rebirth, in May 2019, of the Export-Import Bank of the United States (Exim) chaired by Kimberly Reed, a lawyer who served as senior advisor to the Secretaries of the United States Treasury in 2004. Congress gave a mandate to the federal agency, which now has a theoretical strike force of $ 135 billion. It is up to the Exim to devote 20% of its resources to unlocking financing that is capable of neutralizing Chinese offers in Africa. On May 14, 2020, the board of directors of the American agency validated a loan of 4.7 billion dollars for the benefit of Mozambique to build an LNG installation. “This is a prime example of how a revitalized Exim, thanks to the leadership of President Trump and bipartisan support from Congress, can help ensure the use of made in USA products and services, without giving way to countries like China and Russia, ”said Kimberly Reed.

*From 2018, a tool called Prosper Africa …*

In addition, when John Bolton presented the US Strategy for Sub-Saharan Africa in December 2018, he took the opportunity to launch Prosper America. This initiative, which brings together the resources of more than 15 American government agencies, is intended to counter the new Silk Road (Belt & Road), traced by Beijing since 2013, with the mission of doubling trade and investment between United States and Africa. Prosper America is establishing a one-stop-shop to make it easier for US businesses to access more than 60 business investment support services.


However, the initiative is slipping. “It has lost a lot of its momentum due to a very slow deployment,” said Judd Devermont, Africa program director at CSIS last June.

READ MORE: Recession: Nigerian economy to slide by 3.4% in 2020 – IMF

*… Followed by the Build Act*

Another brick laid by Congress in March 2018, is the adoption of the Build Act, which created the US International Development Finance Corporation (IDFC), and the American development bank, with $ 60 billion in investments compared to $ 29 billion for its predecessor. Concretely, the Trump administration is also seeking to score points by dealing directly with states. Washington is therefore trying to sign a free trade agreement with Kenya at all costs. Negotiations are underway. After the one concluded with Morocco in 2004, it would be the second time that the United States would ratify and conclude a deal with a country on the continent. The example would be symbolic of the return of Uncle Sam. In 2019, Kenya imports from the United States totaled 391 million dollars, against more than 3 billion from China. In the minds of the Americans, an agreement with Kenya would serve as a springboard for negotiating new agreements bilaterally with other states.

But Washington’s neoconservatives are convinced that the United States can only effectively curb China’s stranglehold in Africa if it controls the major levers of financing on the continent, such as the AfDB, which approved more than $ 7 billion in commitments in 2018 and which benefits from the remarkable triple A rating from international rating agencies.

*Final objective: control the funding levers with candidates dubbed by Washington*

Is the statutory designation of a new AfDB president in 2020 a dream opportunity for Washington to maneuver and control the Pan-African institution and promote the appointment of a president committed to American interests? Except that Akinwumi Adesina stands in the way of Washington advisers. And he is the only candidate to run for his own succession. In addition, he is a national of Nigeria, the largest shareholder of the AfDB with 9.1% of the bank’s capital. With 6.5% of the shareholding, the United States comes “only” in second position.

Whatever. The bank has 80 shareholder countries, including 26 non-African countries. Daniel Runde openly contests the governance of the AfDB which gives the voting preeminence to African countries, with “58.89% of the votes”.

However, in October 2019, the Republican in a note from the CSIS on the future role of the AfDB, said “at the World Bank, the United States has 15.7% of the vote and a de facto right of veto, while they do not hold a veto similar to the AfDB”. One thing is obvious for the adviser: “Regional development banks work best when they follow the golden rule, namely: whoever owns the gold sets the rules”. Clearly, those who finance designate the kings and commanders.

READ ALSO: African Development Bank to launch African Economic Outlook 2020 Supplement

*Obstacles on the way to the AfDB’s capital increase*

As luck would have it, this pressure from the United States came when Akinwumi Adesina was negotiating the Bank’s general capital increase, which was concluded favorably in October 2019, and will raise capital from $ 93 to $ 208 billion over ten years from 2020 to 2030. This represents an increase of 125%. At the same time, Daniel Runde writes: “Shareholders are going to have to ask serious questions. The United States, as the main donor, does not have the same vote and influence within the AfDB as it does in other multilateral development banks,” such as the Asian Development Bank and the Inter-American Bank of development. “The AfDB should reconsider the position of its large non-regional shareholders, who are increasingly speaking out about the disproportionate voting power they hold in relation to the size of their contributions. If they are ready to pay, they should have more actions to take in the bank. ”

Obviously, the United States did not succeed. Did Akinwumi Adesina reject them? Did he stand up against American design? Hard to say. For the moment, the protagonists remain walled in silence. But this is where the troubles of the AfDB President began.

*In the wake of whistleblowers alleging unethical behavior*

To strengthen the attacks against Adesina, the architects of the Nigerian destabilization operation took the opportunity of a letter sent to the governors of the Pan-African bank in January 2020 by whistleblowers. The latter accused Akinwumi Adesina of unethical behavior, favoritism in appointing Nigerians to senior positions, and personal enrichment. Allegations he denies. In the meantime, the grievances against the president of the bank were leaked to the press, giving a global echo to the accusations against him, while he was engaged in the campaign for his re-election. Conservative Steven Dowd, the current US chairman of the AfDB’s audit and finance committee, is suspected of being behind the leaks over the accusations affecting the Nigerian.

On May 5, an internal bank investigation exonerated Akinwumi Adesina for lack of evidence. Annoyed, the United States threw a stone in the pond. In a letter dated May 22, US Secretary of State for the Treasury, Steven Mnuchin, expressed “serious reservations” about the findings of the investigation. And as a member of the Board of Directors of the AfDB, he calls for “a thorough investigation of these allegations by an independent external investigator”. After 15 days of silence, the Board of Governors of the AfDB accepted, on June 5, that a new investigation be “carried out by a neutral, honest person, of high caliber with undeniable experience and a proven international reputation, in a period of two to four weeks at the most, taking into account the electoral calendar of the bank. This mission was entrusted at the beginning of July to the former Irish president Mary Robinson.

*Suspense as to the outcome, but the battle will leave its mark*

Whether cleared or accused, what will be the fate of Akinwumi Adesina, under the threat of the American steamroller? Washington has meanwhile garnered support from Switzerland, as well as Denmark, Sweden, Norway and Finland, according to Bloomberg. The Nigerian still enjoys the backing of the African camp and the rating agency S&P Global Ratings. While maintaining that AfDB’s triple A rating, S&P stated in a press release dated June 19, 2020 that “the Board of Governors of the AfDB endorsed the conclusions of the ethics committee which exonerated the president of any wrongdoing, although it allows for an independent review of the report given the differing views of the Governors. We believe that, in accordance with our expectations, this issue has been dealt with appropriately through the appropriate institutional channels. […] We expect shareholders support to remain strong, regardless of the outcome of the independent investigation.”

Asked by the BBC on May 30, 2020, Nancy Birdsall, senior associate at the Center for Global Development, an Anglo-Saxon think tank, predicted that “the US Treasury would seek a form of discreet compromise in which no one loses face”. The end of the suspense is expected in a few weeks.

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How Cash flow, Liquidity, and Leverage impacts your financial plans

Aja discusses how Cash flow, Liquidity, and Leverage impacts your financial plans.



cash flow

It is key to discuss cash under the three themes of Liquidity, Leverage, and Cashflow. These concepts are interrelated, but each has different impacts on your financial plan.


It captures only cash transactions and is simply the amount of cash flowing in and out of your business or person. Hence, if you buy an asset and issue a Purchase Order to pay a supplier in 90 days, that transaction will not show up on your cash flow.

As an illustration, if Emeka buys a TV with N200,000 but issued a cheque for N100,000 cashable in 90 days; only N100,000 will be captured leaving his cash position. Thus, Emeka has positive cash flow and negative leverage, because his debt has gone up.

For Okafor, the seller who received half of the proceeds in cash, he may be liquid but cannot replace his stock due to lack of enough cash flow. He may have to leverage to generate cash. Should he need cash, he can create liquidity from his paper check of N100,000 by discounting to cash before 90 days, but at a cost.

You must be aware of negative and positive cash flow and avoid as much as possible, generating cash from financing activities i.e. borrowing to fund non-income generating assets or activities.

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It is determined by how fast an asset can be converted into cash. If Okafor gets a cheque offer from Dangote Cement and another from Emeka to pay for a TV, which do you think he will accept all things being equal? Most likely the Corporate cheque, because he perceives that it is easier to discount to cash; thus, more liquid than the individual cheque.

Federally issued bonds are said to be less risky than State or Corporate bonds of similar tenor because the issuer (the FGN) is more liquid than the States or even Corporates.

The same can be said of Equities. Stocks that are traded more often and held by more investors are more liquid and commands a better premium to the bonds of a similar company. This is one reason large blue-chip stocks command higher market prices, the investors are also paying for the ease of liquidity.

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A good metric for measuring liquidity has to be the Acid Test liquidity ratio that determines how easy it is for you to generate cash in an emergency. It is calculated by dividing your assets by your liabilities, but the key is that the assets are stripped off all hard assets and will include only cash and easily marketable securities and commodities like gold that can be sold. The higher the ratio the better.


Simply put, leverage is borrowing. You can borrow to increase potential profits or to meet an obligation that is due. When cash is borrowed, it must be paid back with a cost called interest. Leverage can produce cash flow and liquidity, but no firm or household can remain a going concern solely on cashflow financed by leverage.

Eventually, the interest cost will swell and more of future operating cash generated by the firm or household will be earmarked to pay off interest, leaving the principal to remain and generate more interest cost.

In the earlier example, Emeka used leverage to buy the TV and gave Okafor a cheque, who will in turn generate cash flow by liquidating the instrument from Emeka.


A good leverage analysis is to calculate your Leverage Ratio. To determine your leverage ratio, list out all your liabilities, divide by your total assets, and multiply by 100. The answer tells you how much of your assets are financed by debt i.e. leverage ratio.

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Hence, you can have positive cash flow, be liquid but be highly leveraged, which is not ideal. The rule of thumb says the lower the leverage ratio, the better.

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Summarily, with cash, you must be aware of the implication in terms of cash flow, liquidity, and leverage.

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#EndSARS: Analyzing the economic prospects of another lockdown

Decisions taken in the next few days will determine how soon the issues surrounding the #EndSARS protests will be resolved.



#EndSARS: Analyzing the economic prospects of another lockdown

The past five to seven days in Nigeria have been nothing short of fictional for the Nigerian people.

One would be hard-pressed to describe the events without seeming to take sides with either part of the standoff as emotions, euphoria and sometimes, unfounded principles have seemed to become the order of the day. Logic, accountability and common sense being on vacation as they often are in such matters.

If there were negotiations (of which there are none presently), parties involved may likely disagree on a couple of things ranging from the sincerity of the other party, approach to a peaceful resolution, what amounts to a peaceful resolution and how to forge ahead.

READ: COVID-19: How CBN policies helped prevent the collapse of the Nigerian economy – Oscar Onyema

READ: CBN removes “third parties” from buying forex routed through Form M

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There would be accusations and counter-accusations, more so, as the chasm of discord between stakeholders continues to widen with each passing day of the #ENDSARS protest across major cities and towns of the Country. Nonetheless, one thing both parties would agree on is that their continued standoff and reluctance to resolve the complex issues around the protest is ruinous to the economy.

Nigeria’s real GDP growth for 2019 was estimated at 2.3% by the AfDB. It was an improvement on the 1.9% estimate for 2018 and an achievement of the 2019 expert projections despite the uncertainty about the 2019 election outcomes, policy implementation slowdown and sell-offs by foreign investors in 2018.

READ: $70 billion per annum will be needed to tackle pandemic induced poverty – World Bank

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READ: Manufacturers receive N459.69 billion from banks, thanks to CBN’s lending policy 

Household consumption was the key growth driver in 2019, followed closely by growth in transport, the oil sector and information and communications technology. Agriculture, for all its Government patronage could not withstand the floods that heralded a climate change while suffering from the conflicts between herdsmen and farmers- it flopped, and so did manufacturing which could not be reckoned with due to a lack of financing. Estimated inflation for 2019 was 11.3%.

After a turnaround from –1.6% in 2016 to 0.8% in 2017, 2020 was supposed to be the year where Nigeria consolidated on the steady GDP growth of previous years by implementing its Economic Recovery and Growth Plan with an emphasis on economic diversification.

READ: Nigeria’s $1.5 billion steel plant set to produce 1 million MT of steel annually

The CBN’s proactive decree that banks hold loan–deposit ratios of 60% was geared to increasing lending to the real sector, even as they eased the risks of lending to small businesses.

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An increase in the value-added tax from 5% to 7.5% was implemented to shore up domestic non-oil revenues, and agro-industrial support from the Government was supposed to make 2020 a year to surpass growth forecasts even as oil revenues began to improve and drive foreign exchange reserves. Then came COVID-19.

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READ: CBN wades into the bank vs Fintech debate

Lacking a clear nationwide pandemic framework, coupled with a nonexistent welfare system and weak healthcare infrastructure, the Nation did a relatively impressive job in managing the pandemic but did lose the economic advantage it started the year with. Negative GDP growths were projected for Q2 and Q3 even as oil prices slumped to an all-time low.

Diaspora remittances (which accounted for 83% of the FG budget in 2018) had reduced to a trickle because of the pandemic, and unemployment surges. The World Bank predicted a recession by Q4, it would be Nigeria’s worst in four decades.

READ: CBN clears air on Diaspora Remittances, official inflows $2.6bn not $26bn 

Once again, Nigeria beat the odds. A series of monetary and fiscal policies saw to it that more funds were made available to the real sector; delinquent loans were restructured to keep from becoming bad; the free fall of the Naira was staved off and key industries were supported through Government’s special intervention programs. A few optimists were beginning to think we had rounded the corner, then came #EndSARS protests.

In the few days since the protests have begun, the Nation is estimated to have lost billions of Naira with Lagos state, understandably, being the biggest loser so far hosting the largest protests. Manpower hours have been lost, properties have been destroyed and worst of all lives have been lost.

READ: CBN knocks airline and shipping firms over non-compliance with form NXP

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Household spending, transportation and manufacturing cannot continue to thrive in these unrests. September inflation was pegged at 13.7%, its highest since February 2018 there is already considerable strain on healthcare due to the pandemic and the exposure of the populace during the #endsars protests and counter-protests could spike up the COVID-19 numbers once again.

The peculiarity of the nature of the protest has seen Nigerians in the Diaspora channel their funds to supporting the protests in Nigeria while organizing theirs in their host country. Another significant loss of diaspora remittances which represent a substantial percentage of the GDP. Also, the protests are beginning to weigh in on stock market activities and could affect other economic indices if tensions escalate further.


READ: Nike stocks post gains, women’s apparel division grow by 200%

The unfortunate resolve of both sides to fight to the finish without giving room for dialogue could lead to another lockdown of economic activities as witnessed in Edo, where a 24hr curfew has been declared; Lagos where schools and businesses have shut down; Osun, Ekiti, Plateau, Imo and the FCT where business activities have come to a grinding halt.

The cyber warfare being threatened by both sides could also have far-reaching effects on the liquidity of our financial institutions as their customers opt for crypto wallets as safe haven for their funds and as punitive measure for brands they perceive as not being supportive towards their cause.

READ: Leaked memo: CBN instructs banks to block bank account of 38 companies for “forex abuse”

Of course, decisions taken in the next few days will determine how soon the issues surrounding the protests will be resolved, but for a country on the precipice of serious economic repercussions, both parties seem a little too comfortable in staring down the opposition when serious gains could be made by coming to a round table.

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More agriculture loans but longstanding bottlenecks remain

Despite the flurry of funds provided via intervention policies, long-standing bottlenecks in the agric sector still exist.



Nigeria’s agricultural export, Nigeria’s top 10 agricultural exports rose to N206.16 billion in 9-month 

According to local media reports, the Minister for Agriculture, Sabo Nanono through an information official of the Agric ministry announced plans by the ministry to provide relief for farmers in form of interest-free loans, and effective input subsidisation. According to the statement credited to the minister’s representative, the relief is for the recent covid-19 disruptions to farming activities and flooding in Kebbi, Jigawa and Kano states. In addition,
the minister stated the interest-free loans would be provided through a partnership of the Agric ministry and the Central Bank of Nigeria.

We acknowledge that farming activities have been significantly affected in 2020 due to covid-19 movement restrictions during the planting season as well as abnormal rainfall patterns which led to flooding of farmlands. That said, we note that the farmers/herders clashes remain a significant threat to agricultural productivity. These unfortunate events have led to a spike in food prices refelected in the food inflation rate of 16.66% in September according to the National Bureau of Statistics (NBS). Thus, we consider provision of reliefs for farmers important to restore farming activities and output level back to pre-covid levels.

However, we note that the agriculture sector remains plagued with long-standing structural challenges which if ameliorated, would significantly improve output level and drive the country towards its goal of achieving self-sufficiency in food production. Some of the long-standing bottlenecks include; poor transport network to connect farmlands with main markets, poor storage facilities, sub-standard farming inputs, crude agricultural techniques
etc. These in our view, are the reasons why the funds that have been pumped into agriculture via different intervention schemes such as Anchors Borrowers Program (ABP) and Commercial Agricultural Credit Scheme (CACS) have yielded limited results and remain riddled with repayment controversies.

In our opinion, while short term relief for farmers is necessary to immediately alleviate some of the pressures on food prices in the short term, we think some of the flurry of funds provided via intervention policies should be directed at resolving long-standing bottlenecks to truly maximise the full potential of Nigeria’s agriculture promise.

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CSL Stockbrokers Limited, Lagos (CSLS) is a wholly owned subsidiary of FCMB Group Plc and is regulated by the Securities and Exchange Commission, Nigeria. CSLS is a member of the Nigerian Stock Exchange.

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