CAIRO: Minister of International Cooperation Faiza Aboul Naga signed Wednesday the final installment of a $73 million loan for the Rural Income and Economic Enhancement Project conducted by Egypt’s Social Development Fund.
The $1 million portion was provided by the African Development Bank’s (AfDB) Financial Assistance for Private Sector in Africa fund and will be dedicated to the technical assistance component of the project. This fund is “lodged at the [AfDB] and financed by the government of Japan to assist private sector development in Africa,” according to a statement.
According to Aboul Naga, the objective of the project is to improve the socio-economic livelihood of the economically active rural smallholder farmers engaged in the production, processing and marketing of selected agricultural commodities.
“This is the first signing of the new year and is the last installment of a very important project,” the minister said.
The project will primarily target the economically active poor with an overall cost of $73 million for a five-year period seeking to provide finance to at least 4,800 small scale agribusiness enterprises and 20,000 microenterprises, creating over 60,000 jobs in the governorates of Assiut, Minya and Sohag.
“These were chosen for concentration of small farmers in these areas.” Aboul Naga explained.
The project fulfills one of the objectives of the Egypt National Development Plan (2007-2012) which calls for the creation of approximately 750,000 new jobs every year in order to cope with entrants to the workforce, the reduction of the current level of unemployment from around 8.4 percent to 5.5 percent as well as reduction of poverty from 20 percent to 15 percent by 2012.
According to Hany Saif El-Nasr, head of the SFD, the $1 million fund from Japan is part of a $3 million technical assistance program and will go directly to create business linkages between the farmer associations and the private sector agribusinesses in a value chain, through improved marketing, entrepreneurial and business skills development and reliable trade relations.
“This is a testimony to the close relationship of the AfDB with Egypt. Egypt is the second largest shareholder of the bank and the third largest country in the bank’s portfolio,” said Khushhal Chand Khushiram, resident representative of AfDB in Egypt.
The bank’s current portfolio in Egypt is $2.5 billion and has increased with the support of the ministry, he added.
“The bank has provided a $70 million loan for the project which will be mainly fund microfinance loans from the SFD and we look forward to positive impact on economic welfare of rural small holders farmers, create jobs and improve living standards in rural Upper Egypt,” he added.
Ambassador of Japan in Egypt, Norihiro Okuda, was present at the signing and said “Japan has been a strong partner with AfDB through launching funds like FAPA and it is from this fund that we made our contribution. I’m very glad to be able to see new bonds being formulated between Japanese government, AfDB and Egypt.”
