The United States Government and Afriland First Bank Liberia Limited have signed a Development Credit Authority (DCA) agreement to increase agricultural lending in Liberia. The symbolic signing ceremony took place with USAID Liberia Mission Director, Dr. Anthony S. Chan and Hamadou Bayo, Managing Director at Afriland First Bank Liberia Limited, in attendance.
In a comment at the event, Dr. Chan said USAID is committed to working with micro-, small-, and medium-sized enterprises in the country. He added that he hopes the new partnership with Afriland First Bank would complement other USAID-sponsored programs pursuing private sector growth and create employment opportunities especially through MSMEs. He also said that USAID has been able to get the utilization of its credit facility up from 10 per cent in 2009 to 56 per cent at present; adding that the program has supported 137 enterprises to win 342 contracts worth $31 million.
The US Government and Afriland will risk share the new MSME financing options, especially those in agriculture and construction sectors. Agriculture and construction are regarded as particularly risky businesses, but there is a special value in creating employment opportunities in those sectors, noted Dr. Chan.
Afriland First Bank Managing Director, Hamadou Bayo, said one of the most important productive parts of African economies is agriculture and financing agriculture is one of the top priorities of his bank. “As an African bank, we are convinced that one of the vehicles for development is finance. We are grateful to USAID and IBEX for supporting us through DCA and believe strongly that we have a lot more to do together.”
Afriland First Bank is the third DCA partner bank in Liberia, after International Bank Liberia Limited and Ecobank Liberia Limited.
USAID implements the DCA programme in Liberia through the Liberia Investing for Business Expansion Program (IBEX). The programme offers financial services to local businesses and commercial banks staff, including technical assistance and capacity building support such as training, coaching, mentoring, advice and loan facilitation for business growth and expansion.
Liberia, with a land mass of 42,000 sq miles (111,370 sq km) and a population of 4,092,310 (2014 est) continues to enjoy a stable and democratic government since 2003. Since then, it has organized two presidential and legislative elections, including a Special Senatorial Election held in December 2014. President Ellen Johnson Sirleaf is now completing the second and final six-year term which ends in 2017. Presidential and Legislative elections are to take place in October 2017 and the newly elected government will be inaugurated in January 2018.
Until mid-2014, Liberia was on stable path in implementing its ambitious medium-term development strategy, the Agenda for Transformation. However, the deadly Ebola Virus Disease, which was first reported in March 2014, lasted close to 16 months and resulted in a death toll of about 4000 persons. The outbreak also began destroying the fabric of Liberia’s economic and service delivery system.
Liberia’s GDP growth forecast of 2-3% for 2015 is attributable mainly to resumption of activities in the agriculture, construction and general services sectors. The traditional drivers of economic growth in the economy, namely iron ore and rubber are projected to decline in terms of contribution to GDP, because of falling commodity prices and low output. Agriculture sector registered negative contribution to GDP, despite modest increase rice production during the year 2015. Services sector is the key driver of economic recovery in 2015, particularly construction (both road and residential), retail and distribution services.