PIA to become major shareholder of Togo’s Risk-Sharing-based Agricultural Financing Mechanism (MIFA)

Thursday, 08 July 2021 15:07
PIA to become major shareholder of Togo’s Risk-Sharing-based Agricultural Financing Mechanism (MIFA)

(Togo First) - Adetikope Industrial Platform (PIA), a joint venture between the Togolese State (35%) and Arise IPP (65%), will become MIFA’s major stakeholder. The move was announced at the end of the council of ministers held yesterday, July 7. 

The PIA’s stake in the MIFA is yet to be disclosed but the State, however, said it would head the company’s board of directors. 

The State itself should keep a 43.5% stake, according to the draft decree setting “the terms and price at which the State sold part of its shares in the company’s shareholding.” “The State’s position will enable it to be fully associated with the governance of MIFA SA. For example, the board of directors’ chairman will be appointed on recommendation by the Togolese State.”

Besides the PIA and the State, the FNGPC - the national federation of cotton farmers’ associations - will be MIFA’s third shareholder. 

The MIFA’s privatization follows the acquisition, by the Singaporean Olam, of the Nouvelle société cotonnière togolaise (NSCT). Olam is one of Arise IPP’s shareholders, alongside Africa Finance Corporation (AFC).

The MIFA was launched three years ago. It is a risk-sharing-based incentive mechanism to finance agriculture in Togo. Inspired by Nigeria’s NIRSAL mechanism, the Togolese initiative aims to boost financing in agriculture, professionalize its sub-sectors by structuring value chains, and put in place adapted and innovative technological and insurance products.

Since it was established, in 2018, CFA27 billion were loaned to agricultural actors. Over the past three years, the mechanism helped create and consolidate more than 274,000 jobs, including 240,000 seasonal ones. Also, more than 200,000 farmers were supported, and 1,450 cooperatives were structured. Nevertheless, agriculture remained the least-financed sector in the country. Indeed, agricultural actors got less than 1% of overall loans that banks granted to the economy in 2020; despite the fact that the sector contributes nearly 40% of Togo’s GDP and employs 60% of its active population. 

Fiacre E. Kakpo

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