IFAD, Sierra Leone sign agreement for $72.6 million agriculture project

04 Mar 2019, 12:00 am
Financial Nigeria

Summary

The project will facilitate the government’s crop diversification and rural poverty reduction agenda.

Palm trees

The International Fund for Agricultural Development (IFAD) has signed an agreement with the Sierra Leonean government to finance the Agricultural Value Chain Development Project (AVDP) in the West African country. According to a statement released on Monday, the Rome-based international financial institution and a specialized United Nations agency said the project will benefit about 34,000 vulnerable rural households in Sierra Leone.    

The AVDP, valued at $72.6 million, aims to improve food and nutrition security and raise the incomes of smallholder farmers by modernizing agriculture, increasing production and developing markets. AVDP entails investment in agricultural mechanization, irrigation and water management.

IFAD said the project will strengthen and climate-proof rural infrastructure through the rehabilitation of feeder roads and warehouses to improve product drying and storage capacity. It will also build the capacity of smallholder farmers through farmer field schools and provide them with credit for their investments in smallholder farms. At least 40 per cent of the project's participants will be women and youth.

Agriculture is the largest sector of the economy of Sierra Leone, accounting for 62 per cent of the labour force, 59 per cent of GDP and 22 per cent of export revenues. However, poverty is particularly acute and concentrated in rural areas where 59 per cent of the population lives, according to the UN agency.

The new project will increase production and improve the marketing of rice, palm oil, cocoa and vegetables. It will also facilitate the government’s crop diversification and rural poverty reduction agenda.  
 
The financing agreement was signed by Gilbert F. Houngbo, President of IFAD, and Jacob Jusu Saffa, Sierra Leonean Minister of Finance. The financing will include IFAD loans, grants, and co-financed by the private sector (to the tune of $1.4 million), the government of Sierra Leone ($8.1 million) and the beneficiaries themselves ($1.4 million). Moreover, additional co-financing ($9.2 million) is being requested from the Adaptation Fund. Over the next few months, IFAD said additional $40.8 million will be made available under the performance-based allocation system cycle for Sierra Leone, covering the period 2019-2021. This will take the total financing to $72.6 million.

"IFAD's allocation of $40.8 million to Sierra Leone for 2019-2021 has almost doubled compared to the 2016-2018 allocation of $21.4 million," said Lisandro Martin, Director of IFAD's West and Central Africa Division. "The strong performance of the country programme in recent years is being rewarded by IFAD's Performance-Based Allocation System."

Since 1980, IFAD has financed nine rural development programmes and projects in Sierra Leone at a total cost of $321.2 million, with an IFAD investment of $165.4 million. These projects and programmes have directly benefited 547,500 rural households. Since 1978, IFAD said it has provided about $20.4 billion in grants and low-interest loans to projects that have reached some 480 million people.


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