Cameroon, AfDB Sign Pact To Strengthen Agricultural Value Chains

Posted by Eric Ojo African News, Featured, Latest Headlines Saturday, September 17th, 2022

(AFRICAN EXAMINER) – The government of Cameroon and African Development Bank (AfDB) have signed a partnership agreement which is aimed at developing agricultural value chains in the West African nation.

Part of the agreement which was signed in Yaoundé, the Cameroonian capital, is to set up an Agricultural Sector Development Fund that will be utilized in implementing the envisaged reforms within the agricultural value chains.

It will provide medium-term resources to microfinance institutions in Cameroon, so that they themselves can extend flexible medium-term loans (2 to 4 years) to enterprises in the agricultural value chain.

The Agricultural Value Chain Development Project will endow the Fund with €13.12 million, in addition to a partial credit guarantee of €4.58 million euros for risk sharing with commercial banks.

With financing of €115.05 million, the project is 77.6 percent financed by the African Development Bank Group, 21.5 percent by the State of Cameroon and 0.9 percent by beneficiaries.

Its objective is to help create shared wealth, jobs for young people, and strengthen food and nutritional security by bolstering the competitiveness of the oil palm, plantain banana and pineapple sectors, of which Cameroon is one of the main exporters in Central Africa.

According to the recently signed agreement, the Commercial Bank of Cameroon will make the resources available to microfinance institutions, closer to the field and, therefore, to producer organizations, including small and medium-sized enterprises and also youth engaged in commercial agriculture.

Cameroon’s Minister of Agriculture and Rural Development Gabriel Mbairobe and the General Manager of the Commercial Bank of Cameroon, Léandre Djummo, signed the agreement and the AfDB’s on Director General for Central Africa, Serge N’Guessan, also attended the signing ceremony.

The minister said: “I express my gratitude to the African Development Bank Group, which, like the Cameroonian government, is convinced that agriculture is an important pillar of the structural transformation of our economy. We are very sensitive to this multifaceted support”.

Similarly, the AfDB director general said the Bank will ensure that this innovative fund has more resources, so that more farmers benefit from it and, above all, that rural development is a reality in Cameroon and in the Central African sub-region.

General Manager of the Commercial Bank of Cameroon, thanked the minister for the rigorous monitoring of the project and its outcome, all the public authorities involved and the African Development Bank for placing confidence in the institution.

Under the scheme, microfinance institutions can approach the Commercial Bank of Cameroon with a request for refinancing, which will be granted at a highly concessional 3 percent interest rate. In turn, the microfinance institution extends loans to its clients, typically cooperatives and small agricultural enterprises, and others, tapping 30 percent of its own resources to do so.

Moreover, the Agricultural Sector Development Fund will contribute a further 60 percent of the loan, which assumes a financial counterpart of 10 percent.