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Banks are needed to make agriculture viable

Business

Kabelo Masoabi

Experts say banks are an integral part of the farming ecosystem and will be vital if they create financing and lending products that enable the agricultural system of the African continent to move to a more viable future.

The information was shared during the debut Inter-Regional Agriculture Symposium (IRAS) held in Lesotho a fortnight ago and the convention gathered stakeholders from across Africa to discuss the future of agriculture in the continent.

Happening at the grounds of the Lesotho Agricultural College, agricultural enthusiasts, policymakers, development institutions and smallholder farmers from Kenya, Namibia, Zimbabwe, South Africa, Botswana, and Lesotho agreed that to attain agricultural inputs, small-scale farmers need access to finance.

A Botswana agriculture enthusiast and researcher, Oarabile Ditedu, said for farmers to take better advantage of new and expanding market opportunities, they need affordable financial services.

She viewed agricultural challenges facing Lesotho as being more or less similar to those experienced by fellow African countries such as Kenya.

“Many smallholder farmers are unable to get loans they need – not only for inputs, but also to finance activities such as harvesting, processing, marketing, and transportation.

“The inputs they get via loans are also not covered by insurance,” Ditedu explained.

In her opinion, development institutions such as banks should be involved in the entire supply chain with financing farmers, from equipment needed, to processors and transportation.

Ditedu also appealed to the banks to design lending programs or products that support farmers in building climate resilience.

“Banks need a system that will embed climate change into their credit and pricing policy. In banking language, there needs to be the appropriate basis point adjustment on loans that make doing the right thing for the climate, the best thing for the business.”

Ditelu organised the symposium in Lesotho aided by the Africa Women Farmers Allies Lesotho (AWFAL), the National Agricultural Research and Development Institute (Botswana) and the Basotho Enterprise Development Corporation (BEDCO) among other local and international stakeholders.

She described the forum as a catalytic force for change in Africa’s agricultural landscape; intending to build strong partnerships of market trade, policy sharing, project implementations and agribusiness growth within the African continent.

“Knowledge exchange platforms, outreach mentorship programs and support systems are key for women and youth to excel. We seek local, national and international partnerships and investors across the globe to join and make agriculture profitable.”

An actionable expectation from the event was for the participating farmers and stakeholders to discover key takeaways from the symposium, offering practical solutions to enhance smallholder farming practices.

Leading experts from various African countries also shared their knowledge and strategies for addressing pressing agricultural challenges within the region.

Speaking for his institution, the Acting Chief Executive at Basotho Enterprise Development Corporation (BEDCO), TÅ¡epang Tlali, said the corporation is a government agency mandated to promote Basotho-owned enterprises and agriculture holds a special place in their business interest, as it is one of the pillars of Lesotho economy.

He highlighted that BEDCO has initiated comprehensive capacity-building programs to catalyse development across various sectors including agriculture.

“We equipped business people with the necessary resources and skills needed to dive into a competitive world. One of our access to finance programs is called ‘Venture Capital Financing’ which is still under-utilized by our entrepreneurs as I speak,” he said noting that access to finance is one critical bottleneck for many Basotho entrepreneurs.

“We therefore invite all ambitious and visionary entrepreneurs to explore this avenue, to take their businesses to another level,” Tlali said.

The Minister of Agriculture, Food Security and Nutrition, Thabo Mofosi, for his part, applauded the IRAS initiative saying it will go a long way in capacitating the smallholder farmers in Lesotho and across the continent.

“We as the Government of Lesotho will make sure that we avail all the necessary tools to make this IRAS initiative a success that will benefit small but aspiring farmers,” the minister promised.

Going forward, a similar conference shall proceed to Botswana in 2024, Namibia (2025), Kenya (2026) and Angola (2027).

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