Members of Parliament have said that the government must develop and implement effective plans to raise the rate of loans for the development of agriculture and livestock.
They made the observation during a plenary session on Thursday 11 June which approved the analysis of the National Bank of Rwanda-Central Bank’s 2018/2019 activity report by the Parliamentary Standing Committee on Economy and Trade.
MP Théogène Munyangeyo, Committee Chair, said that in the 2018/2019 financial year, agriculture received only 1.5 per cent of the total loans granted by commercial banks in Rwanda.
“We cannot expect fostered development when a sector which employs for about 70 per cent of the population only gets 1.5 percent of loans offered in the country [by commercial banks],” he said.
Even the Development Bank of Rwanda (BRD) which was expected to significantly increase agriculture financing was not doing enough in this regard, MPs said.
MP Munyangeyo pointed out that the agriculture sector accounted for 13.3 percent of BRD’s long-term loans, while 59 percent were channeled to infrastructure financing and 16.1 percent to energy projects.
Since BRD has no branches across the country, Munyangeyo said this is also a challenge for people from remote parts of the country who need to get loans because they need to come to bank’s headquarters in Kigali.
He noted that the Committee realized that a mechanism is needed to ease the access of people , especially farmers, to nearby loans.
Munyangeyo said the agriculture sector is important to the country’s economy as the central bank’s 2018/2019 activity report indicated that the sector contributed 29 per cent to the GDP.
MPs contended that the agriculture and livestock sector has great growth potential and increased economic output, but expressed concern that low funding to the sector is hampering its progress.
MP Albert Ruhakana reinvigorated the debate to establish an agricultural bank to better serve the needs of the farmer.
“As about 70 percent of Rwandans are farmers, a particular bank for agriculture and livestock should be considered,” he said.
The Committee on Economy and Trade said about 70 per cent of the fruits used in Rwanda are imported; something that lawmakers said could be resolved if the farming sector is developed through financing, research and technology.
MPs urged the Ministry of Agriculture and Animal Resources to take steps to minimize the quantity of imported fruits by considering soil quality and features as well as fertilizers appropriate for any region of the country to be used to grow fruit. They said such action would have to take place within a year.
“Most of the fruits are imported yet we have appropriate land that we can use to grow them here,” said MP Christine Murebwayire as she called for ways to enable farmers to get enough loans.
Munyangeyo said that during the discussions between the Committee and the Ministry of Agriculture and Animal Resources, it was stated that the livestock sector has potential to increase output than agriculture (crop value chain) since the former recorded an average growth of 14 percent in the last four years compared to the latter, which grew by 4.6 percent in fiscal year 2018/2019.
The committee realized that the creation of this subsector should have an effective plan as it has proven to support the economy of the country.
Overall , the report by the Central Bank showed that the country’s GDP grew by 9.5 per cent in 2018/2019 compared to 8.5 per cent in 2017/2017/2018.
The report indicated that Rwanda’s agriculture has a significant contribution to economic growth and inflation outcomes, and that this sector needs to continue modernizing to reduce weather dependence, increase productivity, and streamline internal channels of economic activity.
