Foods

Food security: AfDB, Cameroon govt set up €115.05m fund

Adeleke Alade

The African Development Bank and the Cameroonian government are in collaboration to set up a €115.05 million fund for the development of Agricultural Value Chains.

With financing of €115.05 million, the Agricultural Value Chain Development Project is 77.6% financed by the AfDB Group, 21.5% by the State of Cameroon and 0.9% 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.

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 small and medium-sized enterprises in the agricultural value chain as well as individuals engaged in commercial agriculture.

This agreement was signed on September 8, 2022 in Yaoundé, between Cameroon’s Minister of Agriculture and Rural Development, Gabriel Mbairobe and the General Manager of the Commercial Bank of Cameroon, Léandre Djummo. The African Development Bank’s Director General for Central Africa, Serge N’Guessan, also was in attendance at the event.

The Agricultural Value Chain Development Project is expected to endow the Fund with €13.12 million and a partial credit guarantee of €4.58 million euros for risk sharing with commercial banks.

“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,” said Minister Mbairobe. “We are very sensitive to this multifaceted support.”

“The African Development 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,” said Director General N’Guessan.

Under the scheme, microfinance institutions will be able to access financing, which will be granted at a highly concessional 3% interest rate. In turn, the microfinance institution extends these loans to its clients, usually cooperatives, small agricultural enterprises, and others, tapping 30% of its own resources to do so. The Agricultural Sector Development Fund will contribute a further 60% of the loan, which assumes a financial counterpart of 10%.

The General Manager Djummo of the Commercial Bank of Cameroon gave a vote of thanks to the Minister of Agriculture 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.

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