*Togo adopts Nigeriaâ€™s agricultural lending model
President of the African Development Bank (AfDB) Akinwumi Adesina was Tuesday in Lome awarded the Commander of the Order of Mono, Togoâ€™s highest civil honour, by the Head of State of Togo, Faure Essozimna GnassingbÃ©.
A statement by AfDBâ€™s head of communication, Olivia Ndong Obiang, said the national honour, bestowed on personalities who have shown exceptional merit, was given to Adesina during his visit to the country for the launch of the MÃ©canisme Indicatif de Financement Agricole (MIFA), a programme designed for improving farmersâ€™ access to finance. The initiative, based on Nigeriaâ€™s incentive-focused, risk-sharing agricultural leading model, aims to provide one million farmers with access to credit and reduce the risk of lending to agriculture.
In his address at the occasion, Adesina said, â€œTransforming 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 Togoâ€™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).â€
He said, â€œWhen fully implemented, it is 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.â€
In attendance at the event were members of GnassingbÃ©â€™s cabinet, including Prime Minister Komi Selom Klassou, members of the diplomatic corps, President of the International Fund for Agricultural Development (IFAD), Gilbert Fossoun Houngbo, NIRSAL CEO, Aliyu Hameed, as well as representatives from the private sector.
MIFA is based on Nigeriaâ€™s successful experiences with NIRSAL, where it helped de-risk lending by commercial banks to agriculture.
IFAD President Houngbo 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.”
According to Prime Minister Komi Selom Klassou, who launched the operational phase of MIFA, agriculture accounts for 46 per cent of Togoâ€™s Gross Domestic Product with vast growth potential. â€œThis innovative instrument is a â€˜reliefâ€™ and pragmatic response to the problem faced by small farmers who receive low financial support because of high lending risks,â€ Klassou stated.
AfBD has 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 per cent of them women, received their fertilisers through the system. AgriPME has enabled the government to target farmers and deliver subsidised farm inputs. It has 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 per cent.
The system has also led to CFAF 3.5 billion in savings for the Government of Togo.
Since the beginning of its operations in Togo in 1972, the African Development Bank Group has approved 76 operations valued at USD 538.24 million. The current portfolio comprises 13 transactions with a total net commitment of USD 297.80 million. It includes 10 domestic transactions valued at US $ 143.94 million, or 32 per cent of the global envelope, and three multinational operations of US $ 153.86 million.
Transport infrastructure represents 75.55 per cent of the portfolio, followed by economic and financial governance (13.88 per cent) and the social sector (8.77 per cent). Agriculture, water and sanitation, energy, and the financial sector account for about 0.6% each.