Maputo — TANZANIA's plan to set up an agricultural bank has been described as worth emulating by more African countries to ensure farmers' access to credit.
The tribute came up at the ongoing Alliance for a Green Revolution Forum (AGRF) where delegates, however, noted that there is need to put forward more innovative models of finance even after setting up the agricultural bank.
During a discussion on "Financing Agriculture", Bernadette Mukonyora from International Fund for Agricultural Development (IFAD) said the financial sector is an essential player in agriculture development, playing a facilitating role of bolstering the necessary capital for farming activities like storage, processing, packaging, transport, insurance and marketing of the produce.
The IFAD official told the forum that recent statistics indicate that only six per cent of Tanzanians have access to financial loans from banks, with the agricultural sector accounting for only one per cent of the loans.
Expounding further, she said in order to ensure that farmers are no longer excluded from financial facilities, the government has incorporated the Tanzania Agriculture Development Bank (TADB) to assist them in accessing inexpensive long-term loans for buying farm implements.
"To enhance agricultural sector growth which is less than 4.5 per cent per year, there is need to solve constraints that include non availability of rural credit, improved property rights and infrastructure," she said. Delegates said it is one way of the countries to increase financing to the sector.
According to the Comprehensive Africa Agriculture Development Programme (CAADP), under the compacts agreed 10 years ago, countries were to commit using 10 per cent of their national budget for agricultural development and to ensure growth of the agricultural sector of six per cent annually in order to reduce food insecurity and poverty, only nine countries had exceeded the targets.
The CAADP also has an agricultural growth target of 6 per cent. To date nine countries have exceeded this target (Angola, Eritrea, Ethiopia, Burkina Faso, Republic of Congo, Gambia, Guinea-Bissau, Nigeria, Senegal and Tanzania) and another four have achieved growth of between five and six per cent.
Alliance for a Green Revolution in Africa (AGRA) president Jane Karuku said there was a need for governments to heed the call and make Africa agriculturally productive.
"Despite immense agricultural potential, Africa is a net importer of food. Over the last two decades, there has been progressive increase in food imports and it is now estimated that the continent imports over USD 22 billion worth of food annually," she said.
The AGRF brings together African and international leaders and policy makers, development specialists, scientists, representatives of agribusinesses and farmer organisations to discuss food and nutrition security and agricultural growth in Africa.
The aim of AGRF is to provide a critical and broad African platform to discuss policy and practice and harness initiatives and partnerships dedicated to ensuring food security, reducing poverty and spurring profitable and sustainable agriculture growth that will improve the lives of smallholder farmers across Africa.