Jail agric loans defaulters for two years – Bank chief

Managing Director, Bank of Agriculture, Prof. Danbaba Danju, has suggested a two-year jail term for defaulters of agricultural loans in the country.

Danju spoke with the News Agency of Nigeria on Saturday in Makurdi, against the backdrop of increasing cases of loan diversion and default.

He said that owing to the frequency of loan default in the country, it had become imperative for the government to enact a legislation that would reduce the occurrence.

According to him, such a law will prescribe appropriate punitive measures against such defaulters. He, however, suggested a two-year jail sentence for such offenders.

Danju regretted that many beneficiaries of agricultural loans deliberately misapplied them, while some never paid back at all.

He also advised the government to fashion ways of stabilising the exchange rate to support the growth domestic industries.

He said the government should focus on achieving low exchange rates to boost agricultural production.

The bank top executive said the current exchange rate, aimed at raising the local currency, was not good for agro-business in the country.

Although, he admitted that the exchange rate was a function of both the fiscal and monetary policies of the government, he insisted it was better for the government to control it in favour of agro-business.

He advised the government to learn from the Chinese model which was in support of the depreciation of its local currency to boost local production and discourage imports.

According to Danju, when exchange rate is high, it encourages huge imports, and heavily subsidised agricultural commodities would flood the market, and agro-business suffers.

(NAN)