Efforts to extend more credit facilities to the rural agricultural sector have taken center stage of the African Rural and Agricultural Credit Association (AFRACA) conference organized together with the Development Bank of Rwanda (BRD) that kicked off at the Kigali Marriott Hotel on August 1, 2016.
Alex Kanyankole, the Chief Executive Officer of BRD, in his keynote opening remarks noted that Agriculture continues to play a key role in the lives of many Africans.
“Agriculture continues to be one of the biggest employers in many African countries.
It continues to feed the populations and it is for these fundamental reasons that governments, commercial banks, insurance companies, NGOs and civil society organizations need to continue working together and to always ensure that the entire agricultural sector is working efficiently,” Kanyankole said.
He said that some of the key success factors of the sector include the financing of the various agricultural activities so as to be able to produce for those who need the produce.
“It is therefore imperative to have an efficient mode of financing for the sector where best practices are identified and replicated. This meeting to share best practices is a development opportunity for us all and I would therefore like to thank the AFRACA secretariat for providing this nobble opportunity,” he added.
The Secretary General of AFRACA, Saleh Usman Gashua also noted that there are many reasons as to why rural agricultural development finance is important.
“Agriculture is the only sector which affects all everyone is a stakeholder, unless there is anyone who doesn’t eat. 60 to 70 per cent of our populations are involved in one way or another in the agricultural value chain. Less than five per cent of us have access to formal agricultural finance which is really very unfortunate which is why we are here. The issue of access to finance has been a big problem and we are here to see how we can reverse the situation.” he said.
Monique Nsanzabaganwa, Vice Governor of the National Bank of Rwanda said, as a central bank and Rwanda in general, they were happy to have access to the important knowledge sharing and networking event to discuss agriculture financing and the rural economy.
“Today, in Rwanda, we have made tremendous progress as regards financial inclusion. We are talking of around 11% of the population who are excluded from financial services. We have reached there by focusing on key policies such as forming and having savings and credit cooperatives and also having mobile financial services and other innovations such as agency banking. All these are creating proximity in providing financial services. However, we still have a gap in the actual usage of financial instruments which is low,” she said.
Talking of agricultural sector, Nsanzabaganwa said formal lending programs are mainly through the SACCCOs and are now at 6% up from 1% 10 years ago in Rwanda.
“This conference is important for us because I believe we can learn from best practices so that what works elsewhere can be implemented or adapted in other areas. Governments are pushing millions of dollars in this sector and as policy makers we need to know how to manage that to the best use,” she said.
Gerardine Mukeshimana, the minister of Agriculture and Animal Resources said that given that most of the African countries’ workforce is employed in the agricultural sector, there is need to have an integrated and prosperous sector by transforming from subsistence farming to innovation driven and market oriented farming.
“The potential impact of agricultural transformation in Africa can be seen by the fact that 60% of arable land is producing only 10% of the global agricultural output. This tells us that we need to have a private-sector led agricultural sector which can be done by addressing critical constraints of financing critical agricultural value chains,” she closed.