MFDP Provides US$700K to Enhance Local Rice Processing, Production

Minister Tweah exchanged document with Agriculture Minister Cooper at the Ministry of Agriculture in Congo Town

— Signs cash collateral guarantee agreement with Afriland Bank

By David A. Yates and Judoemue M. Kollie

The Minister of Finance and Development Planning (MFDP), Samuel D. Tweah Jr., and Agriculture Minister, Madam Jeanine Cooper, on Thursday, March 26, 2020, signed a Cash Collateral Guarantee agreement with the Afriland Bank aimed at providing a financial remedy for major rice processors to enhance processing and production of rice in the Country.

Under the agreement, the MFDP provides an initial amount of US$700,000 to the Afriland Bank as cash collateral for utilization by three rice processing companies, including the Fabrar, in Kakata, Margibi County, Agriculture Infrastructure Investment Company and the Selma Agriculture Company, in Foyah and Voinjama, Lofa County.

The agriculture loan will capacitate these rice processing companies to purchase more paddy from smallholder rice farmers for processing on the domestic market.

The cash collateral will facilitate a revolving credit facility for rice processors at a lower interest rate and is expected to increase production and distribution of home-grown rice through purchasing and processing of paddy rice from farmers and cooperatives.

The government’s decision comes against the backdrop of poor access to credit in the agricultural sector as was articulated by rice farmers and processors during a recent business climate meeting in Ganta.

Research shows that commercial banks’ lending to the agriculture sector in South Saharan Africa including Liberia is less than 4%. With limited, or no access to finance, farmers find it very difficult to increase their yield, especially in rice production. The intervention by the government of Liberia is expected to create a paradigm shift in local rice production in the coming years.

This agreement, which is the initial step of the Government of Liberia in the agriculture sector signals the government’s commitment to prioritize and ensure national food security by promoting the production, processing, and distribution as well as marketing of home-grown rice as manifested in the Pro-Poor Agenda for Development and Prosperity- the (PAPD).

The initiative contribution also marks the beginning of the implementation of the President, Weah’s vision of ensuring a vibrant agricultural sector by transitioning Liberian farmers from subsistence to commercial farming system.

For accountability and transparency, and to ensure repayment of their loans, the Ministry of Finance will centralize all rice payments under the national budget and will ensure timely payments to rice processors through their designated accounts at the Afriland Bank.

Also, a team comprising the ministries of Finance and Development Planning, Agriculture and the Afriland Bank will effectively monitor and supervise the implementation exercise.

This economic relief though limited due to budgetary constraints is expected to help rebalance and rebrand the economy, especially amid COVID-19, which is rapidly spreading across the world. Growth in this PAPD value addition project to include other locally produced commodities will require the injection of additional capital for which the government will be seeking support from friendly governments, the donor community, and international organizations.

For his part, Finance Minister Tweah noted that “this was the first public-private engagement with the agriculture sector and will set the basis for more direct fiscal interventions.”

He noted that ‘trust’ was the catchy phrase of this new arrangement and that beneficiaries must never lose sight in their commitment to repaying.

Agriculture Minister Madam Jeanine Cooper reiterated that providing financial access to farmers to increase food production is one of the newest hallmarks of the government of Liberia under the PAPD. This tripartite initiative by both ministries and commercial banks will help in opening agro-financing windows for productive farmers in the country.

On behalf of Robert Nkous, CEO of Afriland First Bank Liberia, Leopold B. Mbumen, acting CEO, expressed his gratitude to the Government of Liberia for the preferment of the bank as a partner in fostering the Pro-Poor Agenda for Prosperity and Development through this noble vision of food security in Liberia.

He added that this component of the agenda particularly ties in with Afriland First Bank Liberia strategic goals and thus makes it easy to execute.

Additionally, he warned potential beneficiaries that this project should be considered as one that could make or break other similar efforts from Government in the future. Hence the need to apply all effort to ensure that the project succeeds.

At the same time, the Government of Liberia through the Agricultural ministry has set a right basis for non-failure including the provision of funds as collateral to enable easy access to funding, and also a ready market to consume the products. All that is left is the implementation of the project to ensure that rice is actual planted and processed.

He concluded by saying that Afriland First Bank’s role in this project will be to ensure that the funds reach the intended beneficiaries and together with the Government shall monitor and ensured that the beneficiaries utilize the fund in accordance with the Government’s objectives.

Meanwhile, the President of the National Rice Federation of Liberia, Mohammed Kamara has informed the Daily Observer that rice processors receiving the loans are grateful to the government for the financial assistance.

“We are highly thankful to the government for the timely intervention in the rice sector. With this loan local farmers shall have the opportunity to market their paddy at various locations. This money will also help the processors to constantly supply the local market, especially the school feeding, government employees and other institutions,” he told this paper through a telephone conversation.

It can be recalled that Minister Cooper upon taken over the Ministry told the Daily Observer that within the first three months in office, she will ensure that local rice processors are subsidized or provided with loans to boost the rice sector, something she said is part of her strategy to reduce rice imports.

The government of Liberia’s intervention could mark a turning point in the agriculture sector. Not only will the production and consumption of home-grown commodities address goals one and two of the Sustainable Development Goals (SDGs) by putting money in the hands of local farmers, but it will also minimize capital outflow by reducing importation, strengthen the forex bureau market, and lower the commodity price index.


  1. That’s very good, but allow the Minister of Agriculture to take into account to end domestic exploitation of small rice farmers and to encourage them to expand their farming business by setting the standards of prices for better productions as a reward for the backbreaking jobs they performed . Meaning Equal work for Equal purchases. Or best set the scale for value worth. Or allowed both parties to reach a common understanding through negotiations as a way to end domestic exploitation of small rice farmers by the processors or companies. They do need some sort of protections from domestic exploitation.

    • What is good about the loan? Do you know who owns Fabrar? The Minister of Agriculture…Kpang….Conflict of interest. Become minister, give your farm funds to operate, leave others to fend for themselves. $700K and only 3 companies can get a cut? This is why Liberia will not develop anytime soon if such corruption continues.

      • This is no time for reinventing whells. Please stop the drum beat for another April xxteen. Your Kind complained that the Late President Tolbert and Agriculture Minister were major rice farmers; fantasizing and inciting hulums that, increased in the price of rice to encourage local production would have only benefited the two(the president and Agriculture minister), hence, the need for a rice riot to the ditriment of hundreds of lives and destructin of millions of dollars worth of properties. Why can’t you’ll invent new whells of politics but the old tactics of lies and carless,wicked rumors? she was rewarded for her qualification and examlary efforts in agriculture! Go to the Afribank with your proposal and see if it will be rejected (wth its merit before you complain!

        • Your kind? Did you even read and understand my post? The Minister’s company, Fabrar, and two other firms are listed as the recipients of the $700K loan. In serious countries, this is conflict of interest and corruption. Her company should be exempt. There are other firms that could benefit. This Minister will keep benefiting from this ministry to the detriment of many poor farmers. I doubted her sincerity from day one. This article proves my point. The recent stimulus bill for the COVID-19 relief in the US exempted all members of Congress, the President, their children, spouses, and grandchildren from receiving benefits from the $2 trillion dollar stimulus. That is how responsible governments work. There is fraud written all over this $700K loan. Again, this is Liberia. We will stay long inside.

  2. What the government ought to be doing is creating the opportunities for small group of farmers to be able to ‘process’ their own rice. Localize the processing by setting up processing centers in every county in Liberia. Lay the framework that encourages competition not CONCENTRATION. The supply of clean processed rice will then be put into the market with good results. It is critical that government bans the export of any rice produced and processed in Liberia until such a time when the local market has been adequately supplied. Beware that these processors are NOT interested in supplying the local market and their past conduct indicates their preference to export this rice. This must NOT be allowed.

  3. $700,000 US Dollars is nothing and will not make an impact. Governments needs to break this limited mindset where money has to come from the government. The role of the government is to CREATE the environment. In this case, government needs to ‘collateralize’ the investments of interested Liberians who may want to put money into setting up processing centers as well as wholesale and distribution centers. Lets be clear, the role of a processor is simply to buy unprocessed rice and clean/process it. PERIOD. A processor should NOT engage in Wholesale or Retail of product. These are areas that should be set aside for other Liberians. And these are the critical links that will bring the rice to the market. This is how you create an industry. So we already have a market that eats a lot of rice. The challenge is to bring a product that is of comparable quality and CHEAPER then imported rice. This is very possible if government provides the guaranties and incentives. My own fear is this is going to be yet another opportunity that greedy folks selfishishly use to enrich themselves instead of working to better the conditions of the Liberian people.

  4. Mr. President,
    Inject 2 billion in the banking system to serve as collaterals for all Liberian businesses. We would transform the entire country in 10 years.
    It would be a Liberian development at 100%, with the government paying no debts but receiving interests on such sum.
    This is what we called segregation in business.

  5. The Liberian economy, real elephant meat!
    Everyone can come and cut off their piece and then fly with it in the USA to establish solid foundation for his family, and then leave Liberia barren.

    We all want to invest in our country. If our government wants to provide collaterals, it should be across the board for all Liberians with viable projects, not a handpick of people.

    Gbekugbeh Weah, son of the soil, who promised FIXES, is also impoverishing the people. CDC and partisans, wait just 3 years and see the results from this.

    The child that can’t hear can feel!

    • Just shut the hell up. It’s easy for you to sit in the Ivory Coast and spew crap on here. When was the last time you were in Liberia to plant a cassava ? NEVER.

      What is your threat about 3 years ? Nothing will happen in Liberia in 3 years.

  6. This is a good intended by the government, for us that found our self in the rice production in Liberia, I’m undertaken 25hectares of low land in Bong county, early next month I be harvesting 3.5 hectares of load land in Balama town,suakoko District .my my cooperative is called Balama Tonofiakeh Agricultural group. I have about 67 workers. My question is how can cooperative get this Loan?

    • My Bong County brother, there is NOTHING good in this $700K loan. The Agriculture minister owns Fabrar and this loan goes to her company and two others according to this story. This is corruption and serious conflict of interest. Rice farmers like you are on your own. This is one major reason why Liberia lags behind other serious countries….corruption, greed, abuse of power, etc. You’re pretty much on your own, brother. It will be very difficult for you to get a loan for your farm. Facts….

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