An agribusiness manager has stated that delays in funds expected from ‘big and strategic customers’ distorted the handsome returns that he gave investors on agricultural schemes initiated by his company.
Many agricultural investment schemes came up after the COVID-19 wave of 2020. The schemes were initiated by the government and some private sector players to support the economy. But many managers of the schemes defaulted in fulfilling the returns they promised.
The manager who spoke at a Twitter space programme alongside other participants organised by THE ICIR admitted making some wrong calculations on risk mitigation strategy, after promising investors higher returns on their investments.
The topic of the programme, which held on Friday, June 10, 2022, was, ‘Digital Farmers: Nigerians Losing Money to Agro-investments.’
The manager said those wrong calculations caused his company to default on repayment to investors.
“When we noticed some red flags, we stopped collecting money from the public. When we also noticed things were not going on as planned, we had three months to redesign our business mitigation strategy, but we couldn’t. We admit our faults. However, we have commenced repayment to some investors,” the Chief Executive Officer of Titan Farms, Gbenga Olatunbosun, had told THE ICIR during the twitter space event held on Friday June 10, 2022.
“I admit my faults and the company’s faults. We relied on our running capital for settlements. However, other investments we expected from cooperatives and other investment partners didn’t come as planned and distorted our repayment plans.
“Unfortunately, as a result of not getting expected funds from big and strategic customers during a festive season like Ileya, as planned, we relied on our running capital, which affected our repayment to investors, hence the defaults,” Olatunbosun added.
A legal practitioner, Saidu Emmanuel Lawal, who spoke at the event advised investors to look out for some red flags before investing in agricultural investment schemes.
Lawal said, “Do your due diligence carefully, and also check whether the body is registered with the Security and Exchange Commission (SEC) and the Corporate Affairs Commission, (CAC). Also get legal help where necessary.”
An Associate Consultant to the British Department of International Development (DFID), Celestine Okeke, who spoke on the sidelines of the event exclusively to THE ICIR, said having investment knowledge was key, irrespective of one’s status.
According to Okeke, individuals who desired to invest must continue to sharpen their skills on investment.
“There are several defaults, mostly because people don’t watch red flags, and investment managers at times defy risk acceptance criteria,” he said.
An investigative editor with THE ICIR, Olugbenga Adanikin, told the space that many Nigerians rushed into investment schemes without having any basic knowledge about them.
According to Adanikin, there would always be red flags to watch out for when investing in such schemes.
“There are always basic risk acceptance criteria that an investor should know before investing money,” he said.
Adanikin narrated a report he did recently to drive home his point.
“The latest story was of an investor, a native of Ikere-Ekiti in Ekiti State who solicited for the help of Oba Adeyeye Ogunwusi, Ojaja II, to mediate in an agro-commodity investment dispute between him and Ooni’s ally, Gbenga Eyiolawi (Aare Kebi Mapala of Ibadan),” he said.
The Managing Editor of THE ICIR, Ajibola Hamzat, also told the public to be cautious of attractive promises of returns on investments.
Most of such promises, Hamzat said, could not be true considering Nigeria’s surging inflation and high lending rates.
“Many agri-business facilities came up after the Covid-19 wave. Many promised unrealistic returns on investments. Investors must possess some knowledge and watch out for some red flags,” he said.
Harrison Edeh is a journalist with the International Centre for Investigative Reporting, always determined to drive advocacy for good governance through holding public officials and businesses accountable.