Rwanda acquires US$120m loan facility to boost agriculture mechanization

RWANDA – The Rwandan government has secured a US$120 million loan from EXIMBANK to help set up a centre of excellence in agricultural mechanisation and other projects such as irrigation to boost productivity.

The centre will be able to assemble mechanisation equipment locally, have the capacity to maintain the equipment and repair them, as well as increasing the mass training or mechanisation operations.

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Patrick Karangwa, the Director-General of Rwanda Agricultural Board (RAB), stated, “It will work in partnership with other institutions like institutions of higher learning and IPRCs.”

“Some of these IPRCs are doing very well in agricultural mechanisation since they are designing models for mechanisation equipment,” he added.

Karangwa stressed that the centre will also increase the quality of agricultural professionals.

Currently, agricultural mechanisation in Rwanda stands at 25 per cent, but with the mechanisation centre, it is expected to reach 50 per cent by 2024.

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Figures show that more than 60 per cent of the smallholder farmers have less than half a hectare who cannot afford agricultural technologies such as mechanisation equipment.

That is why Karangwa urged the farmers to set up cooperatives and consolidate land in order to afford mechanisation cost.

Karangwa further revealed that the government has launched an agricultural and livestock insurance scheme of which the government is paying the insurance cost.

This is an addition to the subsidization of seeds by 80 per cent and irrigation equipment by 50 per cent which according to the government must all go together with the insurance scheme to cope with weather effects.

He added that agricultural loans to farmers are also expected to be doubled to ensure they have access to finance.

“Loans to farmers are still less than six per cent of total loans in the country yet farmers need them to buy the needed agricultural technologies. With the insurance scheme for farmers, we hope banks will also release more loans,” said Karangwa.

Dr Kayode Sanni, the project Manager AATF said, “We are ready to bring all the technologies to increase the capacity of small and medium entrepreneurs in agriculture. For example, Rwanda is producing 4.5 tonnes of rice per hectare but we can push it to 7 tonnes.”

Africa Agriculture Technology Foundation has since 2003 introduced 18 agricultural technologies worth US$400 million under 15 projects in 23 African countries.

These technologies have increased yields by 300 per cent for cereals, legumes, tubers, vegetables, horticulture, bananas among others, reports New Times.

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