(GOVT. PRESS SECRETARIAT); As the local executing agency, the Ministry of Finance, is taking the lead to ensure that financing for potential benefactors of the Samoa Agri-Business Support Project, (SASP) is maximized.
To that effect, MOF’s Chief Executive Officer Leasiosiofa’asisina Oscar Malielegaoi has briefed the Cabinet Development Committee, (CDC) of a request now with the Projects’ financers to amend the cash collateral component of the grants to ensure that more investors can meet the requirements.
The Project, explained Leasiosiofa’asisina is an investment by Government to revitalize the agriculture sector.
“The investment is supported through a grant of USD $5 million that the Government received from the Asian Development Bank complemented by AUST$ 1 million grant from the Government of Australia,” explained the Finance CEO.
The assistance is to address several weaknesses and bottlenecks that contribute to the low investment and value addition to the agriculture sector. Such weaknesses range from;
The objective of the project is to achieve growth of selected commercial agribusiness and for the agriculture sector to regain its important contribution to the economy of Samoa.
It aims to address key financial and capacity limitations in selected agribusiness that have sound prospects for commercial success and will continue to improve forward linkages within the agricultural value chain, higher objectives of value addition, employment, trade and rural incomes.
Since the last progress report was tabled before the CDC meeting, 5 new agribusinesses stakeholders are receiving assistance from in a number of investments which includes;
- Cocoa (exported cocoa beans for chocolate production
- Coconuts (exported mature coconuts and virgin coconut oil)
- Root Crops (exported taro and local chips production)
- Beef & Meet Processing
- Artesian Water Bottling
- Healthy and Nutritious Drink
- Mixed Green Hydroponics
- Large Scale Vegetable Farms
To date $2 million tala in loans from the $6.1 million tala in total funding available under the SASP have been disbursed to the recipients with the grand funding to end in January 2021.
“The SABS project has contributed to increased sales turnover of supported businesses as well as creation of new employment opportunities,” reported a Financial Sector Specialist who reviewed the SASP in March 2019.
“The supported agribusinesses valued the project’s assistance in accessing finance by preparing by preparing business plans, providing cash collateral support and supplementing equity contributions demanded by commercial banks.”
And to that effect, the ADM Mission reviews has observed that the project has achieved positive results.
The review also recommends for the SABS Project to increase its cash collateral coverage from 50% to 80%.
“This review realized that the current 50% collateral support is inadequate as it will leave a collateral gap for the agribusinesses to fulfil.”
In its recommendations tabled and approved by the CDC, the Finance Ministry noted that with the SASP in place, “it enables the potential agribusiness enterprises to grow within their field and seek export opportunities in the near future.”
“In collaboration with the other projects carried out by the Ministry of Agriculture & Fisheries, (MAF) investment to small farmers in the rural area where supply chain of raw produce is now enactive through formal contractual schemes,” the MOF report continued.
“This is another milestone for the project as these subsistence farmers are now encouraged in the commercial market as well as placing people out of the unemployment arena.”
The 7-year project will conclude in 2021.