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Agriculture

Funding: a perennial problem facing Cameroon

Funding: a perennial problem facing Cameroon
  • Comments   -   Thursday, 01 November 2012 10:30

(Business in Cameroon) - Due to the oil boom in the early 1980s, agriculture began suffering from neglect and consequently lack of financing. Things were further compounded by the economic crisis that hit Cameroon starting in the mid-1980s forcing the country into a structural adjustment program. This saw an almost 50% cut in the salaries of civil servants leaving Cameroonians with little or nothing to invest in any sector.

Though blessed with fertile soil and regular rainfall in most parts, Cameroon’s agricultural output is still far below demand. This under-productivity costs the State treasury over 500 billion CFAF on food importation in 2010. Scores of projects are underway under the auspices of the Agriculture Ministry to boost the production of food and cash crops for which the demand is very high. These include corn, cassava, millet, sweet potatoes, Irish potatoes, bananas, cocoa, coffee, rubber and peanuts, among many others.

In order to expand, farmers need capital. Cognizant of the difficulty for farmers to obtain loans from commercial banks in Cameroon, an agricultural bank created by the Head of State, Paul Biya, will become operational as soon as the Central Africa Banking Commission, COBAC gives its approval, Essimi Menye, Minister of Agriculture said in an interview on State Radio. Interest rates on loans for farmers in commercial banks are as high as 15 %, while studies have revealed that less than five percent of Cameroonians have bank accounts. When the agricultural bank takes off, farmers would have greater access to loans at comparatively low interest rates.

Meanwhile, development partners such as the European Union have given Cameroon a non-refundable loan of CFAF 13.11 billion to boost agricultural production against the backdrop of a scheme dubbed “program for the improvement of agricultural productivity”, to span through the next five years.

Also, the Ministry of Economy, Planning and Regional Development is putting in place a program called “agropoles” which, according to its coordinator, Jean Claude Medou “will begin with large producers of corn. Six billion CFAF will be distributed to them in the months ahead to enable them boost production as a way of curbing importation.” The money is part of the 200 billion CFAF that government raised from the sale of treasury bonds.

J.V

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