Mozambique: Agreement On Development of Agri-Business

Maputo — An agreement on the development of agri-business in Mozambique has been signed between the Ministry of Agriculture, the Danish embassy, and the small scale investment company, GAPI.

According to a Monday press release from GAPI, under this agreement, a programme known as Agro-Investe will lend 201.7 million Danish crowns (about 35 million US dollars) to small and medium companies.

Agro-Investe is part of a wider Private Sector Development Programme (PDSP) agreed between the Mozambican and Danish governments in 2010, under which a total of 490 million Danish crowns will be spent on agri-business, district roads and business advocacy and research.

GAPI is to manage the credit component of Agro-Investe, providing small scale agricultural businesses with technical assistance and institutional capacity building.

A loan guarantee fund, known as “Agri-Garante”, will be set up, also managed by GAPI. The release states that this fund “should be implemented in partnership with banks which sign an agreement on sharing the risks of financing small and medium companies operating along the strategic value chains of selected products”.

To launch this fund, the Danish government is making 12 million dollars available.

A third component of Agro-Investe concerns supporting the government’s capacity to manage policies and interventions in agri-business. This part of the programme will be implemented by the Agriculture Promotion Centre (CEPAGRI) and by the Economics Directorate of the Ministry of Agriculture.

Agro-Investe will be run by a steering committee chaired alternately by the Ministry of Agriculture and by the Danish Embassy. Representatives of private business, peasants’ associations and the banks will set on the committee.

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