Guaranty Trust Bank (GTBank) has initiated legal proceedings against 60 top executives from 13 commercial banks in connection with a lingering N17 billion debt linked to the Anchor Borrowers Programme loan involving Afex Commodity Exchange.
The executives, including chairmen, CEOs, directors, and company secretaries, are accused of contempt for allegedly failing to implement a No-Debit Order on Afex Commodity Exchange’s accounts with their respective banks. This move comes amid an ongoing legal dispute under case number FHC/L/CS/911/2024.
Presiding over the case, Justice CJ Aneke of the Federal High Court, Lagos, signed an order that could lead to jail terms for the implicated executives for not complying with the court’s May 27, 2024, ruling.
A legal notice published in various national dailies read, “An order granting leave to the Plaintiff Applicant to serve Form 48 (Notice of Consequences of Disobedience to Order of Court) dated 11th June, 2024, and all other forms and processes that may be issued in this contempt proceeding, inclusive of Form 49, on the 1st-60th parties cited for contempt.”
The court had previously directed 20 banks to transfer funds from the accounts of Afex Commodity Exchange to its account with GTBank until the N17.81 billion debt is repaid.
AFEX had initially sourced the loan from GTBank to finance smallholder farmers under the Central Bank of Nigeria’s (CBN) Anchor Borrowers Programme, expecting repayment from the sale of commodities. Despite an extension, AFEX has not fully repaid the loan.
AFEX claims to have repaid about 90% of the loan, attributing the outstanding balance to difficulties faced by the farmers due to economic challenges. In a statement, AFEX explained, “Over 800,000 hectares of farmland were financed through the programme, but significant macro and policy headwinds, including the Naira redesign policy, severely impacted the farmers’ operations, resulting in less than 40% repayment in the 2022/2023 season.”
AFEX has urged the CBN to activate a collateral guarantee clause included in the Anchor Borrowers Programme to cover up to 70% of the outstanding loan. They argue that the bank’s recent legal actions are premature and undermine ongoing discussions to resolve the issue.
The CBN initiated the Anchor Borrowers Programme in 2015 to link smallholder farmers with processors, aiming to boost agricultural output and stabilize food prices. By 2022, over 4.8 million people had benefited from the programme. However, as of 2023, more than N500 billion was still due for repayment out of the N1.079 trillion disbursed.
The programme has since been discontinued by the CBN, which is refocusing on its core responsibilities of maintaining price and monetary stability.
