High interest rates in Mozambique hindering agricultural development

18 July 2007

Maputo, Mozambique, 18 July – High interest rates charged by banks are one of the main obstacles to developing Mozambique’s agriculture sector, an official has said.

Setina Titosse, provincial agriculture director for Maputo, said Tuesday that in some cases interest of 35 percent was being charged and this was too much for most farmers, “whose production continues at very low levels, particularly in relation to cereals.”

Additionally, loan repayments have to be made after the annual crop harvest and not monthly, as is common in most business activity, noted Titosse.

Power and water supplies to farmers are also too expensive and “make production costs too high,” the official added.

With appropriate financing it will be possible to develop Mozambique’s agriculture sector, which has shown notable progress recently from subsistence farming to commercially viable production, said Titosse.

Some growers in Maputo province are already exporting bananas, grapefruit and papaya and other produce to South Africa despite “low investment in the agriculture sector.”

At the beginning of the 1970s, when Mozambique was a Portuguese colony, agriculture revenues accounted for around two-thirds of the Indian Ocean state’s total exports earnings. (macauhub)