Agricultural finance is the continent’s only salvation

The East African region is endowed with good weather all year round. It has abundant rainfall and very few natural disasters apart from the occasional floods and isolated landslides. In short, it is ideal for agriculture, the mainstay of its population.

In the Middle East and Mediterranean region, the story is the opposite; it is very dry, sizzling hot and dominated by deserts. Rain is a rare and precious commodity. For any plant to push through the sandy grounds, it needs more of a miracle. But miraculously, those dry arid lands north of Africa produce more fruits and vegetables than one can ever see produced in our region.

The secret behind it is that they adopted modern farming methods, have mastered the art of irrigation and water harvesting; each drop counts. Only southern African countries have mechanized agriculture and supply the continent with food.

It is a shame to find South African and Mediterranean fruits, vegetables and meat dominating our supermarket shelves. In order for the region to compete, it will need resources, massive resources. Adopting mechanisation, efficient irrigation and modern farm inputs is the only salvation, but banks are reluctant to fund agriculture because of the many risks involved.

The latest statistics from the Central Bank indicate that only 1.5% of all commercial loans went towards agriculture. There is an urgent need to reverse the trend but banks will only be convinced if risks are mitigated.

Just as proposed during the ongoing African Green Revolution Forum being held in Kigali, agricultural insurance is a priority, that way, bank loans will be cushioned and farmers will be able to afford means to take up modern commercial agriculture.

Otherwise, foreign agricultural products will continue to be unloaded on our shores yet opportunities abound that can help reverse the traffic.

 

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