After three years and many promises, some members of Nigeria Farmers Group and Cooperative Society have had enough of the cooperative’s many excuses.
Take for example, Mr. Pat Atuyi who wore a sad and almost defeated look on the morning of Saturday, August 13, 2022. His concern was how to get back his hard-earned money invested in a cooperative society in Nasarawa State. He and other investors had invested sizeable amounts in a crowdfunding platform, Nigeria farmers Group and Cooperative Society (NFGCS) that had promised mouthwatering sums in returns.
“It’s been over three years of not receiving payment and the farm is still running, three years in which NFGCS received almost N1 billion from the CBN which they cannot properly account for,” Atuyi queried.
“We have been back and forth on the issue; there have been lots of lies, unfulfilled promises and recently, they said they are selling a 45% stake of the business which they will use to pay off investors and also make some other payment. We don’t believe them; we heard a lot of promises like that that never came to pass.”
How it all started
In the far north of Nigeria lies the Farm Settlement village of Ga’ate, in the Kokona LGA of Nasarawa State, managed by the Nigeria Farmers’ Group & Cooperative Society.
NFGCS was founded in 2017 and positions itself as Nigeria’s premier Integrated Agricultural Platform doing its part to ensure that Nigeria attains sufficiency in local food production with investment under three major categories: Animal husbandry, Crop Production and Processing.
The cooperative offered different buckets of investments namely:
- Maize, which offered 60% ROI on cultivation at the cost of N280,000
- Melon, which offered 80% ROI with a cultivation at the cost of N200,000
- Castor oil and yam, which promised a N75% ROI each on cultivation cost of N200,000 and N800,000 respectively, all within the period of one year.
- Similarly, for livestock investment, Turkey went for N700,000 for 50 birds, with an expected ROI of 73.5%
In 2019, Pat subscribed to the Cow Supply Special Contract Programme (CSSCP) at N7.5 million. According to the document shared with Nairametrics, the contract covered procurement, insurance, trucking and others with an expected profitability of N450,000 per month/truck after the deduction of the cost of supply and other necessary costs. However, the expected ROI was 19.2%, every four months.
For this particular investment, the takeoff was set for 5th December 2019, while the interest on investment was expected to be paid every four months with the first payment set for the 5th of April 2020, the second payment on the 5th of August 2020, and the third payment on the 4th of December 2020, after which the investor reserves the right to terminate, rollover or increase investment portfolio, according to the contract.
In addition, Atuyi also subscribed to the Sorghum crop at N6 million for 30 hectares which is expected to yield 35% after profit is shared with the cooperative. These investments are in addition to the earlier subscribed melon investment from 2018 which Pat reinvested upon the due date.
Voicing his grievance Atuyi who said he has about N20 million stuck with the cooperative said, “There’s no legitimate reason why the farm shouldn’t be paying investors.
“The farm got N734 million from CBN received through Keystone Bank. Prior to receiving the money, NFGCS management assured investors once that money is received, they will offset investors payment plus ROI, yet they defaulted after they received that fund.
“They have been making promises upon promises, yet, they always default in payments. For almost 3 years now, a lot of investors have not been paid neither has their capital investment nor interest, yet the farm is running.”
Meanwhile, Atuyi is not the only investor who has had his money stuck in the company for years. Documents shared with Nairametrics containing details about investment with the company revealed a lot of people invested millions with NFGCS.
Commenting on the delayed investment payout, an investor identified as Dolapee claims he has a total investment due of N25 million with the firm since March 2019 and he is yet to get a dime from the company.
He said, “My investments started in November 2017 with subsequent ones to follow in February and March 2018 before the 2017 investment was even due. The 2017 investment of N1.05 million cashed out, but the 2018 investment is yet to. Meanwhile, the total unpaid investment of N25.2 million stated excludes the return on livestock farming and we do not know how much to expect from that”.
Another investor identified as Peter Owona said, “I invested in rice paddy with N4.3 million in Dec 2019 and I am to receive N2.58 million as ROI at the end of one year and nothing has been paid. I equally invested N10 million in the Rice mill in Jun 2019 and was to receive 2,500,000 every 6 months. Till date that has not been fulfilled”.
Femi Oye, another investor said, “For me, it is difficult to separate my investment from ROI because of the many rollovers. The total amount owed me is ₦41,201,000.00”.
The endless promises…
By 2020, Atuyi and other investors whose investment contract became due waited to receive a credit alert, rather what they got from NFGCS was a statement issued by the company.
In the statement issued by the company on the 1st of August, it noted that the Covid pandemic affected the businesses which generated quick cash for the farm, causing the Cattle supply business to be stopped because the farm was incurring great losses, not just in weight of the animals but also in the loss of animals themselves owing to the extended time it took for the transit of the animals to the market.
It added that rice supply was also not spared as it was more difficult and costly getting ‘Rice Paddy’ to the farm and costlier too. “It was also difficult getting the processed rice to the market. All of these conspired to ensure that the farm had little to nothing in about 90 days”, it stated.
NFGCS would later estimate that the Farm suffered a loss in millions because they could not sell cows for over 6 months. It explained that all contracts were suspended, even though the farm had stocked about 500 cows waiting to be supplied to Lagos, Osun, Enugu and Port Harcourt which led to the death of about 50 cows over this period. It also pointed out that funds were wasted in feeding them for months adding to the cost and at the end of the pandemic, the prices for major dealers collapsed.
It stated, “The farm had in the past, met its obligations through earnings from the cattle supply, rice supply and poultry supply businesses. However, unfortunately, these businesses were greatly affected pre and during the period that Inter State Travel Restrictions existed. We have begun to supply again, however, time would be needed to build liquidity to ensure smooth payment of returns”.
“The Farm is asking for more patience and understanding from ‘Farmrades’(investors) between a period of 30-60 days terminating around September 2020. This will allow the farm to build liquidity which will ensure that the issue of delayed payment will be resolved and a thing of the past.”
At this point, investors were met with great disappointment as a lot of them had banked on the funds to settle their various debts and obligations which accumulated during the lockdown period.
By September however, Keystone Bank had approved the company’s request for a N734.52 million loan facility at 5% interest rate per annum and everyone had thought this would go round to settle everyone and also help the farm to grow. Meanwhile, when it was time for payment, Atuyi told Nairametrics that only a few people received payment as they were told the money could not go round and the rest of the investors were back to waiting on promises from the farm.
“We had suggested that they make installment payment to investors. We came together with a timetable, working with the management. They actually gave us the template which everybody agreed to. So, they followed that template and when it was supposed to get to the second batch, they just stopped paying, since then, nobody has been paid,” he said.
In November 2020, the company estimated N118 million supply debt plus a further N151 million supply debt from 2018, due to the collapse in the prices of grains between 2018 and 2019. Noting that a total of N269 million is being owed by offtakers and government agencies supplied through third party partnership. It projected that those payments will begin to come in by Second Quarter of 2021 and the rest of the investors would be settled.
Since then, investors have continued to wait endlessly, hoping that they would wake up to the alert from NFGCS one day.
Speaking on the reason for default, Bright, the admin manager of the farm, told Nairametrics that the farm lost about 70 trucks of cows worth around N7.2 billion due to the lockdown.
He said, “Normally the cows are not supposed to stay more than 5 days on the road but because of the interstate lockdown, the trucks stayed more than two weeks so we lost both in weeks and most of them died of exhaustion.”
While the total amount owed is yet unclear, Bright estimated that the farm owed investors N300 million and was able to knock off around N120 million, leaving the farm with a debt of N180 million owed to the investors, even though investors claim the amount is understated.
Commenting on why the loan of N734 million could not go round for a debt of such amount, he said “We had earlier raised money through debt finance, unfortunately, one of the things they don’t tell you in Nigeria is, when you raise money, there are people you give cuts or percentages to, as a result, it wasn’t enough to pay everybody.”
Speaking on what NFGCS is doing to knock off the remaining debt, he said, “Our initial cause of action was to raise debt financing to pay up everybody but because of those external interest that we had to care for, that wasn’t enough so we decided that instead of having to raise another debt finance, let us sell some equity within the farm so we don’t have to pay unnecessary percentages to some people.
“What we are trying to do presently is to sell equities on the farm, we even sent them communication that we have gone through the process of sale for equity of 45% and the payment will begin by the middle of this month (August).”
“In all of these we have kept them updated weekly via a telegram group as any company would. We expect that they will be more understanding, and what we are doing now is something that would enable us to liquidate everyone.”
“We are very sure that when this is done, we will be able to offset every debt. We are also working to pay off these people so that we can get peace of mind because, at the end of the day, peace of mind is the most important thing.”
What August may bring
For over three years, investors of NFGCS have continued to hang on to hopes that one day, their money with the farm would be refunded. While different dates have been set in the past without the farm honouring them, the farm is again asking investors to believe their money will be refunded for the umpteenth time before the month of August runs out.
Should investors hold on to this? Well, this would be best answered as the last days of August unfold.
