LIBERIA – Liberia’s Minister of Finance and Development Planning (MFDP), Samuel D. Tweah Jr., and Agriculture Minister, Madam Jeanine Cooper have signed a Cash Collateral Guarantee agreement with the Afriland Bank to enhance rice production and processing in the Country.
Under the agreement, the MFDP will provide an initial amount of US$700,000 to the Afriland Bank as cash collateral for utilization by three rice processing companies, i.e. the Fabrar, Agriculture Infrastructure Investment Company and Selma Agriculture Company.
The agriculture loan will capacitate these rice processing companies to purchase more paddy from smallholder rice farmers and cooperatives for processing.
The government’s decision was triggered by poor access to credit in the agricultural sector as was articulated by rice farmers and processors during a recent business climate meeting in Ganta.
Research shows that commercial banks’ lending to the agriculture sector in South Saharan Africa including Liberia is less than 4%.
With limited, or no access to finance, farmers find it very difficult to increase their yield, especially in rice production.
The intervention by the government is expected to create a paradigm shift in local rice production in the coming years and it’s an initial step of the government’s commitment to prioritize and ensure national food security by promoting the production, processing, and distribution as well as marketing of home-grown rice as manifested in the Pro-Poor Agenda for Development and Prosperity- the (PAPD).
For accountability, transparency, and to ensure repayment of the loans, the Ministry of Finance will centralize all rice payments under the national budget and will ensure timely payments to rice processors through their designated accounts at the Afriland Bank.
Also, a team comprising the ministries of Finance and Development Planning, Agriculture and the Afriland Bank will effectively monitor and supervise the implementation exercise.
This economic relief though limited due to budgetary constraints is expected to help rebalance and rebrand the economy, especially amid COVID-19, which is rapidly spreading across the world.
Finance Minister Tweah noted that “this was the first public-private engagement with the agriculture sector and will set the basis for more direct fiscal interventions.”
Agriculture Minister Madam Jeanine Cooper reiterated that providing financial access to farmers to increase food production is one of the newest hallmarks of the government of Liberia under the PAPD. This tripartite initiative by both ministries and commercial banks will help in opening agro-financing windows for productive farmers in the country.
Leopold B. Mbumen, acting CEO Afriland Bank, expressed his gratitude to the Government of Liberia for the preferment of the bank as a partner in fostering the Pro-Poor Agenda for Prosperity and Development.
He added that this component of the agenda particularly ties in with Afriland First Bank Liberia strategic goals and thus makes it easy to execute.