Make Togolese agriculture competitive and attractive? And especially how to encourage banks and financial institutions to invest in this sector? It is to answer these problems that the government has launched the MIFA, Mechanism Incentive for Agricultural Financing.
The report is clear: the agricultural sector accounts for 40% of Togolese GDP. It’s almost half. Yet agriculture is only funded at 0.3%.
Why ? Because the sector is considered « risky », especially because of climate threats that can damage or even destroy crops.
MIFA then acts as a guarantee fund. The guarantor is the state itself. As the risks are shared, financial institutions are less afraid to finance cooperatives or small farmers. Because this is the challenge, allowing « small farmers » to have access to credit to develop and become more competitive.
The establishment of this funding mechanism is based on an effective program in Nigeria since 2013, the NIRSAL (Nigeria Incentive-Based Risk Sharing System for Agricultural Leading).
MIFA is financially supported by the International Fund for Agricultural Development (IFAD) and the African Development Bank (AfDB).
The program is in its pilot phase. It is expected to reach 5,000 farmers in the first phase and eventually reach almost 1 million producers in the value chains. For this first phase, the focus will be on cassava, maize and rice. rice. These channels should benefit from better access to loans, as well as a significant decrease in interest rates on loans from 15% to 7.5%.
Remember that Togo has 7 million inhabitants, 75 per cent of whom are under 25, 75 per cent live in rural areas, in a country where agriculture provides 60 per cent of the labor force.