As head of the Alliance for a Green Revolution in Africa (AGRA), Dr. Namanga Ngongi is keenly aware of the challenges facing African agriculture in multiple areas, such as getting access to improved seeds and fertilizers and building markets for African agricultural products. But one of the most glaring gaps highlighted in his speech at the opening session of the FARA General Assembly is in the area of finance.
“The agriculture sector has great difficulties getting finance,” he said. “Agriculture contributes 40 percent of GDP and 70 percent of the labor force in Africa is employed in agriculture, but it received only two percent of commercial bank loans.
“We should try by all means to increase farmer access to credits,” he added.
Ngongi noted that AGRA has “pioneered” new programs that “use credit guarantees to leverage idle capital in Africa’s banks.”
For example, in Tanzania, US $2.1 million in credit guarantees unlocked US $10 million in credit for smallholder farmers and agro-dealers. Combined with similar efforts in Ghana, Kenya, Mozambique, credit guarantees have generated US $160 million for farmers and other across the value chain.
“These financial schemes have not only provided access to credit but have done so with more flexible conditions and at lower interest rates,” he said.
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