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

Finance

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

REFORMS OVERVIEW

STARTING A BUSINESS (more info)

At the fifteenth position, worldwide, and first in Africa, under the Starting a Business index of the 2020 Doing Business ranking, Togo sustains its reformative dynamics with more reforms….

ENFORCING CONTRACTS (more info)

Compared to some years ago when it was one of the lowest rankers under the Doing Business’ Enforcing Contracts indicator, Togo, leveraging many efforts to improve its business climate, was able to jump significantly on the index in the recent years... .

CONTRACT EXECUTION (more info)

Creation of special chambers of commerce for small debts • Creation of chambers of commerce at the Court of Appeal • Civil and commercial cases now handled by distinct clerks • Establishment of commercial courts in Lomé and Kara • Lawyers and bailiffs now have access to the FORSETI COMMERCIAL platform • A maximum period of 100 days was fixed to settle a commercial dispute .

TRADING ACROSS BORDERS (more info)

In comparison to previous years,Togo has significantly improved its ranking under the“Trading across borders” indicator by adopting multiple reforms that focus mainly on the digitization and reduction in delays, for import and export procedures related to import and export.

In comparison to previous years, Togo has significantly improved its ranking on the “Trading across borders” index by adopting multiple reforms that focus mainly on the digitalization and reduction in delays, for import and export procedures related to import and export.

CONSTRUCTION PERMIT (more info)

After moving from the 133rd to 127th place under the 2020 Doing Business’ construction permit index, Togo intends to reiterate this feat in the coming edition of the global ranking. To this end, it has introduced this year multiple reforms.

GETTING ELECTRICITY (more info)

Over the past two years, Togo’s ranking under the Doing Business’ Getting electricity and water indicator has increased consistently. Owing this performance to multiple reforms aimed at making it easier for businesses to access power and water, Lomé plans to introduce even more reforms this year to keep up its improvements.

REGISTERING A PROPERTY (more info)

Out of all the 'Doing Business’ indicators, Property Registration is where Togo has improved the most since 2018. Indeed, after spending years in the lowest part of this ranking, the country now seeks to beat Rwanda which is the best performer on this index in Africa. To do so, Lomé has been introducing many reforms, with the latest batch implemented this year.

PUBLIC PROCUREMENT (more info)

From professionalization to digitization, through legislative regulations, Togo’s public procurement framework is constantly being modernized. Several reforms have been implemented to improve the sector much to the benefit of the private sector, which is the focus of the National Development Plan.

PAYING TAXES AND DUTIES (more info)

To improve its business environment, Togo introduced some important reforms related to the payment of tax and duties. From the replacement of some taxes to the cancellation of others through exemptions, the country has only one objective: offer the most attractive tax framework to investors and economic operators. To achieve this, the authorities relied on digitization.