This potential can help it generate a two-digit growth rate. However, according to the Central Bank of Congo, the growth rate is not projected to go beyond 6%, owing to the drop in commodity prices and the absence of mechanisms to diversify sources of income.

 The main focus is logically on the agricultural sector which employs 60% of Congolese and which is expected to be one of the major contributors to the economy through its supply of the national market, the continuous improvement of food security, reduction of imports and increase in import.

In 2013, the sector accounted for 40% of GDP but, paradoxically, and despite the stakes, it receives very little financing. DR Congo however enjoys an enormous variety of climate types which offers it possibilities of awfully varied crops, with an unequalled arable land surface area in Africa.  

"The main objective is to significantly improve the use of banking services

There are many difficulties relating to price instability, climatic hazards and low level of professionalization of the sector or the isolation of production areas. Should we therefore spurn this very strategic sector? Apart from the State which lays down the regulatory framework, other players like banks, should contribute their quota. The main goal is to significantly improve the use of banking services and enable most people to access bank products and services in order to reduce the share of the informal sector in the country’s economic web.

To achieve this, it is necessary to streamline and ease procedures for opening of bank accounts while at the same respecting the relevant regulatory constraints. The next step would be to promote private initiative to enable the birth of a class of entrepreneurs. Financing of the agricultural sector therefore requires an inventory of farmers’ needs, depending on the size of their undertakings. 

First, in the short term, this entails the supply of inputs, the establishment of hired labour, the definition of sharecropping, and the development of storage facilities and processing of produce. Secondly, in the medium term, it entails provision of mechanized equipment and redefinition of land purchase. Lastly, in the long term, there is need for the creation of larger plantations of perennial crops.

There is a need to developspecific financial products which take into account the hazards of the sector with a mastery of the risks. To reverse the situation and encourage the creation of low-interest loans, there is bound to be many changes. First and foremost, it will be necessary to bring producers together into cooperatives, which may thus benefit from loans thanks to the group effect. Further, there is a need to finance agricultural research institutes to improve output. It is also necessary to encourage partnerships with agribusiness professionals through a contract mechanism which includes financing of subcontractors and other small-scale producers. The Cameroonian example of financing Socapalm palm groves with the German Investment and Development Company (DEG) could serve as a model. Given that agricultural production comes essentially from rural areas, it would thus be necessary to establish micro banks specialized in rural or peri-urban development, whose proximity with production areas will be an asset in mastering production cycles and will make possible appropriate and adapted financial input. 

In order to boost this thrust or process, banking institutions should have support units that would complement the career path of producers by training them in project set-up and management, notably within the context of joint-ventures.

By Souaibou Abary

Chief Executive Officer of Afriland First Bank, DR Congo