Adesina, AFDB president, launches farmer’s finance initiative in Lome, Togo
Adesola Afolabi was a businessamlive reporter and Head of Financial desk.
Akinwumi Adesina, president of the African Development Bank (AfDB) has launched in Lome, Togo, the Mécanisme Indicatif de Financement Agricole (MIFA), a programme designed for improving farmers’ access to finance.
The finance initiative is based on Nigeria’s incentive-focused, risk-sharing agricultural leading model, which aims to provide one million farmers with access to credit and reduce the risk of lending to agriculture.
Komi Selom Klassou, who launched the operational phase of MIFA, said agriculture accounts for 46 percent of Togo’s gross domestic product with vast growth potential.
“This innovative instrument is a ‘relief’ and pragmatic response to the problem faced by small farmers who receive low financial support because of high lending risks,” Klassou stated.
AfBD has also helped Togo implement AgriPME, a system that allows farmers to access fertiliser using their mobile phones.
In 2016/2017, more than 77,500 farmers, 38 percent of them women, received their fertiliser through the system.
AgriPME enabled the government to target farmers and deliver subsidised farm inputs.
It also improved transparency, accountability and increased public spending efficiency. A total of 40,000 metric tons of fertiliser were provided to farmers, compared to 30,000 metric tons on average over the period 2009-2015, an increase of 45 percent. The system has also led to CFAF 3.5 billion in savings for the Government of Togo.
“Transforming agriculture is the key to reviving rural economies and turning them into new zones of economic prosperity. The MIFA initiative you are launching today is another building block in Togo’s agricultural transformation strategy jointly developed by the African Development Bank and the Government of Togo, with the support of the Nigeria Incentive-Based Risk Sharing system for Agricultural Lending (NIRSAL),” Adesina said at the launch.
He added that when fully implemented, the initiative was expected to rapidly increase bank lending to the agricultural sector, reduce interest rates, and reach 1 million farmers with access to credit in the next three to five years.
MIFA is based on Nigeria’s successful experiences with NIRSAL, where it helped de-risk lending by commercial banks to agriculture.
Adesina was honoured at the occasion with the award of the commander of the order of mono, the country’s highest civil honour by Faure Essozimna Gnassingbé, Togo’s president.
In attendance at the event were members of Gnassingbé’s cabinet, including Komi Selom Klassou, the country’s prime minister, Gilbert Fossoun Houngbo, president of the International Fund for Agricultural Development (IFAD), Aliyu Hameed, NIRSAL CEO, members of the diplomatic corps, as well as representatives from the private sector.
Houngbo in his remarks at the event said, “Innovation is critical to boost the agricultural sector which remains a cornerstone for achieving the Sustainable Development Goals. MIFA is an innovative financial mechanism which will help support smallholders technically and financially.”