Togolese President Faure Gnassingbe launched the Tirsal fund on Wednesday (April 25th) in Lomé, a risk-sharing incentive mechanism for agricultural finance. Financial Afrik reviews the implications of the African Development Bank (AfDB) and Nigeria for this first program of its kind in Togo.
It is indeed a program perceived as a solution in the performance of agriculture which represents about 40 of the GDP of the country, and occupies 60% of the active population. Ultimately, it will have to increase the volume of financing granted by banks to the sector.
Inspired by the Nigerian model (Nirsal, a vast program of the federal government), the Tirsal fund (Togo Incentive-Based Risk Sharing System for Agricultural Lending) will finance, in its pilot phase, the cultivation of maize and rice before being extended until its expansion to other cultures.
“It is clear that we will not have been able to learn from its mechanism, without collaboration with the Nigerian government. Most of the consultants who worked with Togo to set up this mechanism were endorsed by the federal government of Nigeria, “says one of the experts on the program, whose chief consultant, Dr. Steve, also drives the Nirsal .
Eventually, the Tirsal will be endowed with a funding of 100 million euros, more than 65 billion CFA francs, “including a significant contribution from the state,” as announced by Faure Gnassingbé in a speech on April 27, 2018. The Head of State had not failed to “thank, for their availability and support, the Government of the Federal Republic of Nigeria and the African Development Bank,” without any other details (he had in particular received the President AfDB, Akinwumi Adesina, in mid-January in his palace in Lomé).
“We must not forget that it was the president of the ADB who launched the Nirsal when he was still agriculture minister. He is the designer of the project, and everyone knows his penchant for agriculture in terms of development axis “, explains our interlocutor who indicates that the Togolese government had” had a lot of meetings with the AfDB which has advised us enormously “.
The institution based in Abidjan is announced, moreover, to support the project in terms of financing, and “to help also mobilize additional resources”. Even if for the moment, the Togolese State intends to finance the Tirsal on own funds, “the financial partners will put the hand in the pocket, when it will be running”, one specifies.
“Act on reducing interest rates”
Presenting the program in his speech, Faure Gnassingbé said it includes banks and financial institutions, insurance companies, microfinance institutions and guarantee funds and other partner agencies.
“The question of access for agricultural unit operators to financing will find an integrated response that will have the benefit of also acting on the reduction of interest rates,” he said.
