Writes: Tjonane Matla
Following our previous publication where we interviewed the Lesotho Institute of Accountants- Chief Executive Officer: Mr. Moahloli Mphaka, we found it paramount importance to consult the banks as he (Mr Mphaka) mentioned that the banks are also the key stakeholders in stimulating agriculture henceforth ensuring food security.
Nedbank became our first destination, where the Head of Sales – Mr Fusi Notoane gave us the bank’ s views concerning its role in Lesotho’ s agriculture. On behalf of Nedbank, the Head of Sales revealed that the bank has appetite in playing a role in agriculture but in observation has to perform due diligence before committing.
Notoane further emphasized that agriculture is a risky business especially in Lesotho where usage of appropriate technology is still lacking. He gave an example of crop farming where most of the farmers highly depend on rainfall etc.
The bank is playing a role in selectively few agricultural projects, to mention but a few animal husbandry and irrigation projects as it is easier to minimize risks.
The Head of Sales further mentioned that it is always important for the borrowers to be aware that the bank’s main interest is always the ability for clients to pay back the borrowed funds, therefore they as a bank are very warm to finance agriculture but the ground must be levelled first.
Notoane, who has also worked at a bank in Zimbabwe, kept referring to the merchandised agricultural systems he saw while in Zimbabwe. He said in Zimbabwe every bank has an agricultural division equipped with relevant personnel hungry for farming deals. He said that as a citizen of the Mountain Kingdom and on behalf of the bank, he has been involved in activities striving for levelling the grounds with the relevant authorities so much that it could be possible for banks to finance agriculture next time .He further said he recommended the external consultants from Zimbabwe to help Lesotho in her block farming and coordinated poultry farming initiatives strategies, of which such is still at consultants stage.
“It must be noted that, as much as we push for development, we would as much as possible avoid controvecies notoriously associated with block farming once the lowlands water project is complete. Nedbank –Head of Sales further added on what the Lesotho Institute of Accountants- CEO said. “Lesotho needs to graduate from subsistence farming, so much that their agricultural projects could be able to repay their loans henceforth be sustainable”.
The Head of Sales, further claimed that Lesotho is spending millions of Maloti year in year out financing Basotho in pursuance of their education, particularly in the field of agriculture but unfortunately such expertise normally does not find a place in the market. He then said that, only when Lesotho could graduate from subsistence farming, that such resources could find a niche in the labour market.
He further said that different professionals must be involved in agriculture, particularly drafting of business plans as it is only when such brains are involved, that the bank could be in a position to comprehend the proposed financial plans, henceforth such professional work could be bankable as they (agriculture economists) understand the environment far The Bank’s role in agriculture better than anyone else.
To give flesh to the interview, Notoane said the days of preaching agriculture as a backbone to the economy, but approaching it in a non-profit making manner are over .Basotho must take advantage of projects such as Metolong dam.
They must come up with sustainable projects to boost the economy .He believes that if such plans could be implemented a lot of unemployed highly skilled labour force or those who find their jobs reluctant could find not only interest but good money out of agricultural sector.
Although Nedbank is willing to finance farming initiatives, it is as well important to take note on how the Basotho farmers could be in a good position to sustain their market supply, as most of the time the issue is not really that the market is not available, but some business are just too small .However he further said that it is very important to project and help such businesses grow.
In conclusion, Mr. Fusi Notoane disclosed several strategies of which he strongly believes the banks could follow while playing a role in reviving agriculture. One of such brilliant moves is to finance the wholesaler in the value chain.
The wholesaler must take an initiative to pass the finance to the producers. Because the wholesaler needs marketable good quality produce they will have to invest unto the producers projects. He said in that model, if the wholesaler does not have relevant expertise to ensure that good products accepted by the market are produced, he/she could then outsource hence reduction of unemployment.