— Finance Minister Tweah Discloses
The Minister of Finance Development and Planning (MFDP), Samuel Tweah, has disclosed that the government of Liberia is determined to attract more money to agriculture within the next three years in order to stimulate the economy.
He said though appropriation for agriculture is currently low in the National Budget, the sector has more money that comes from the World Bank and other partners in the forms of loans and grants.
Minister Tweah made the disclosure to the Daily Observer over the weekend in an exclusive interview.
President George M. Weah has promised to make agriculture a priority to improve the lives of some of the citizens, but the sector still remains underfunded in terms of budgetary allotment since his ascendency.
Over the last two years, many smallholder farmers across the country have found it very difficult to access basic farming inputs due to inadequate budgetary allocation.
For instance, in the 2019/2020 National Budget, US$6,208,754 was allotted for agriculture which amounted to 1.16 percent of the total budget that year. Within that fiscal year, US$1 million in cash collateral loan was allotted for the rice sector as direct support to farmers in the area of rice production and processing. But unfortunately, the Daily Observer learned that the government disbursed only US$400,000 as support to the rice sector.
Additionally, for Fiscal year 2020/2021, there is no substantial increase being made for agriculture, as only US$6,425,415 out of the US$570 million national budget is allotted with no direct support to smallholder farmers.
But Minister Tweah told our reporter that planning for agriculture is derived from the idea that government has already sourced enough money from development partners.
“There are already resources for agriculture but they come in the forms of credits and grants that we get from our development partners. This is how we begin our planning, looking at the available resources. The Government’s development envelop is very small and the country is still faced with competing priorities,” he said.
Mr. Tweah named some of the development partners that the government has sourced funding for agriculture as the World Bank, African Development Bank, International Development Association and the European Union.
He then noted that in the coming years, the government will think on providing a space for agriculture in the National Budget for increment to accelerate growth. The Finance fruther said that the government is thinking on engaging parners for support toward the sector.
“We want to get to a regime where we are putting more money to critical sectors of our economy like agriculture, health, and education. Many of the money that we are talking about being sourced for critical areas are not from the budget but from partners. However, this does not mean that we cannot experience growth in those areas. In the coming budget years, we are going to fight to create more space so that money can go toward agricultural guarantees for Banks to support farmers,” he explained.
He added that agriculture financing is key to growth in the sector, something that the government is seriously thinking on to borrow more money externally to be used as cash collateral that could encourage commercial banks to lend credits to farmers.
“We are thinking about a serious debt to source for the agriculture sector. This will greatly help the sector because banks are not willing to provide loans to farmers due to risk factors,” he said.
Clarification on US$ 1 million for the Rice sector in 2019-2020 National budget.
Minister Tweah acknowledged that in the 2019-2020 National Budget, the amount of US$1 million was allocated as cash collateral guarantee for the rice sector but out of such amount only US$ 400,000.00 was disbursed by the government to some major rice processors.
According to him, the government failed to disburse the US$1 million allotment to support the rice sector due to limited resources.
“We could not disburse the entire US$1 million due to limited resources. However, when you are to start with the implementation of such a project, it is good to begin with a little amount to allow the farm business to grow on a minimal basis. The goal is to support agribusinesses and so we are working with the banks to establish a guarantee structure to continue support to agriculture, the minister said.
Minister Tweah expressed optimism that such intervention will alleviate the constraint of access to finance that is being faced by those in the agricultural sector.
Harmonization Process impacts on agriculture
The Finance Minister further maintained that the agriculture sector is yet to be affected through the salary harmonization process that is being carried out by the government.
Tweah stated that health and education benefited from the harmonization process through salaries increment for workers.
“Harmonization benefited health and education as most of the teachers and health workers experience increment in their respective salaries. This process provided huge benefits for public workers. Some of the reasons why people are noticing a small difference in their pay is not that there is a cut in salaries, but to restore the policy on tax that is what was not taxed before,” he said.
According to him, though harmonization is not really meant for sector benefits, the agriculture sector might eventually be affected through budgetary increment when savings are realized from the process.
“Harmonization impact is not on the sector, rather it affects workers in the public domain. It will positively affect agriculture in the future in that the savings, we get from it will be applied to agriculture on a marginal incremental basis. As we go further with the process, where retirement of civil servants will occur, we should put that money in to sectors like agriculture or education,” he mentioned.
It can be recalled that President Weah in his second annual address said that critical sectors of the country’s economy like agriculture, education and health could be affected positively through the harmonization process.
The Finance and Development Planning Minister stated that because President Weah has promised agriculture as priority, he has been moved to renew Executive Order #97 that lifts tariff on all agriculture produce to make inputs accessible and affordable in the sector.
He said that the Executive Order is expected to improve the productivity of farmers and agribusinesses within the sector.
In fulfillment of his promise to transform the country’s agriculture sector, the President in 2019 issued the duty-free policy (EO#97) on all agricultural produce. The policy was later renewed in October 2020 by the President to ensure further changes in the sector.
Meanwhile, the President of the National Rice Federation of Liberia (NRFL), Mohammed Kamara, has expressed dissatisfaction about the government’s support to the rice sector.
Speaking to the Daily Observer in an interview via mobile phone, Kamara stated that the government’s support to the rice sector is not substantial enough to enable them to reach out to more smallholder rice farmers.
Kamara stated that members of the rice sector were meeting to come up with a proposal to submit to government. According to him, the proposal will earmark the level of support needed to address the challenges being faced in the sector.