Members of Parliament have said that the Government has to devise and implement effective plans to raise the rate of loans intended to develop the agriculture and livestock sector.
They made the observation on Thursday, June 11, during a plenary sitting that approved the Parliamentary Standing Committee on Economy and Trade’s analysis of the 2018/2019 activity report by the National Bank of Rwanda – Central Bank.
MP Théogène Munyangeyo, Chairperson of the Committee, said that agriculture received only 1.5 per cent of the total loans provided by commercial banks in Rwanda in the 2018/2019 financial year.
“We cannot expect fostered development when a sector which employs for about 70 per cent of the population only gets 1.5 percent of loans offered in the country [by commercial banks],” he said.
Even the Development Bank of Rwanda (BRD) which was expected to significantly increase agriculture financing was not doing enough in this regard, MPs said.
MP Munyangeyo pointed out that the agriculture sector accounted for 13.3 per cent of long-term loans from BRD, while 59 per cent of them went to financing infrastructures, and 16.1 percent was channelled to energy projects.
As BRD has no branches across the country, Munyangeyo said that this is also a challenge for people from remote parts of the country who need to get loans as they have to come to the bank’s headquarters in Kigali.
He observed that the Committee realised there is a need for a mechanism to ease people especially farmers’ access to loans close to them.
Munyangeyo said that the agriculture sector is important to the country’s economy as the 2018/2019 activity report by the central bank indicated that the sector contributed 29 per cent to the Gross Domestic Product (GDP).
MPs contended that the agriculture and livestock sector has a great potential for growth and increasing economic output, but expressed concern that low funding to the sector hampers its progress.
MP Albert Ruhakana revived the debate to set up an agriculture bank in order to better cater for the farmer’s needs.
“As about 70 percent of Rwandans are farmers, a particular bank for agriculture and livestock should be considered,” he said.
The Committee on Economy and Trade said that about 70 per cent of fruits used in Rwanda are imported; something that lawmakers said could be addressed if the farming sector was developed through funding, research and technologies.
MPs urged the Ministry of Agriculture and Animal Resources to take measures to reduce the quantity of the imported fruits through considering the soil quality and traits as well as fertilisers suitable to every area of the country so that they can be used to grow fruits. They said that such activity should be done within a year.
“Most of the fruits are imported yet we have appropriate land that we can use to grow them here,” said MP Christine Murebwayire as she called for ways to enable farmers to get enough loans.
Munyangeyo said that during the discussions between the Committee and the Ministry of Agriculture and Animal Resources, it was indicated that the livestock sector has potential to increase output than agriculture (crop value chain) as the former registered an average growth of 14 percent in the last four years compared to the latter which grew by 4.6 percent in the fiscal year 2018/2019.
The committee realised that there should be an effective plan to develop this subsector as it has proven to benefit the country’s economy.
Overall, the Central Bank’s report showed that the country’s GDP grew by 9.5 per cent in 2018/2019 compared to 8.5 per cent that was recorded in 2017/2017/2018.
The report indicated that agriculture has a significant contribution in economic growth and inflation outcomes in Rwanda, and that there is need to continue the modernization of this sector to reduce dependence on weather, increase productivity and streamline internal trade channels.Follow https://twitter.com/EmNtirenganya