The Government of Liberia and Afriland Bank have signed a Cash Collateral Guarantee Agreement valued at US$ 700,000, to enhance rice production, processing, and distribution to ensure food security in the country.
The Agreement which is a three-year facility, with an interest rate of 7 percent is strategically aimed at GoL providing cash collateral to Afriland Bank Liberia Limited for onward lending to local rice producers, processors, and distributors.
It is expected under the Agreement, that the National Rice Federation, a conglomeration of local farmers involved with the value chain of rice production, would increase their production and distribution on the Liberian market.
Finance and Development Planning Minister Hon. Samuel D. Tweah Jr., and Agriculture Minister, Hon. Jennie Cooper, represented the government during the signing ceremony on Thursday, March 26, 2020, at the Ministry of Agriculture.
Finance Minister, Hon. Samuel D. Tweah Jr., termed the signing as a “great day”, despite the COVID 19 pandemic in the country. Hon. Tweah said the Agreement is in line with President Weah’s medium-term goal of ensuring food security.
“This signals a new
beginning, and the President is thinking that we as a country shouldn’t be
importing rice in the next four years” Hon. Tweah said.
Hon. Tweah disclosed that President Weah wants to see Liberia being able to feed itself.
Hon. Tweah disclosed that this was the first public-private engagement with the agriculture sector and will set the basis for more direct fiscal interventions in the sector.
He commended the 54th National Legislature for what he termed as “transformative steps” in moving the country forward. Minister Tweah said the National Legislature has made very significant transformative decisions including supporting this effort to put the country on the path of food security.
He noted that commercial banks
are risk-averse relative to lending to the agriculture sector owing to a “myth”
that farmers and other players in the sector do not payback.
He pointed out that the government is committed to de-risk the sector, something he said multilateral partners can also help support the government in achieving.
Minister Tweah added that as part of the President’s mandate to stimulate growth in the agriculture sector, anyone supplying food to government entities will now have first priority in terms of payments.
For her part, Agriculture Minister Hon. Jennie Cooper lauded the “wisdom and commitment” of Minister Tweah in initiating and ensuring budgetary appropriation for the project. She also commended the unanimous support of the Legislature in providing budgetary support.
She added that we should
encourage Liberians to return to the soil.
She described the cash collateral agreement as to the first step in being able to feed ourselves as a people.
She then commended members of her technical team as well as technicians from the Ministry of Finance and Development Planning headed by Liberia Macro-economic Policy Analysis Center’s Executive Director Del-Francis Wreh.
Under the tripartite cash collateral agreement, in order to ensure accountability and transparency, as well as to ensure repayment of the loans, the Ministry of Finance will centralize all rice payments under the national budget and will ensure timely payments to rice processors through their designated accounts at the Afriland Bank. Also, a team comprising the Ministries of Finance and Development Planning, Agriculture and the Afriland Bank will effectively monitor and supervise the implementation exercise.