Sierra Leone’s Minister of Agriculture has blocked a large-scale poultry farm project covering 10,000 acres promoted by two Israeli companies citing “critical commercial risks” that need to be resolved.
Minister of Agriculture jeopardises relationship between Sierra Leone and Israel.
Sierra Leone’s Minister of Agriculture and Forestry (MAF), Denis Vandi is jeopardising relationship between Sierra Leone and Israel owing to a protracted delay of an agriculture project to be implemented in the country.
All correspondences laid hands on by nightwatch indicate that the Israeli government is ready to invest in Sierra Leone’s agricultural sector while the Minister is creating bottlenecks that whittle down the investment project.
If the necessary documents are signed by the Sierra Leone Government, the Integrated Solutions for Africa (ISA) will be the developer with Agrotop as the implementer.
The agricultural project will be financed with a loan of US$60,000,000 (sixty-million US Dollars) from Bank Leumi le-Israel, one of the leading banks in the Asian country of Israel.
If implemented, the project will generate revenue of US$26.2 Million with a net profit of US$ 12.7 Million per annum.
The interest rate stands at 2.4 % per annum in sharp contrast to the 6% interest rate paid government for its domestic debts.
By all indication, the income generated by the project repays the principal sum alongside the interest rate with 0% burden on the government.
Taiama and Njala communities in the Korri Chiefdom, Southern Sierra Leone will host the Agriculture Poultry Farm named the ‘People’s Farm of Sierra Leone’ (PFSL).
The project will be based on the latest technologies of bird breeding, egg production and farm management.
It hopes to produce and sell 194.5 million eggs per year.
Raphael Israel, an Israeli currently based in Sierra Leone is the Chief Executive Officer of ISA.
The ISA CEO told Nightwatch he had been constantly engaging the MAF Minister on the need to speed up the project, but his effort proved futile.
“The Minister is delaying a project that will improve food production in Sierra Leone,” he said.
Minister Vandi could not be reached for comments to the allegation against him.
One of the documents shows that financial projections have estimated that the poultry will make sufficient income to repay the loan within a five-year period.
The project, according to the CEO, sets to create 2000 (two thousand) local jobs for Sierra Leoneans paying attention to the employment of youths of the project site.
No sufficient documentary evidence has been offered by the Minister for the lengthy delay for the implementation of a project that works towards the country’s self-sufficiency in food production and other dairy products.
However, an MAF letter dated 31st March, 2020 addressed to ISA CEO highlighted some factors deemed to be delaying the project.
Several important personalities including the Vice President and the Chief Minister, according to the correspondence, were copied accordingly.
The document pointed out the absence of enough information on the operations of ISA Group, experience in project implementation and management, core competency among others as the key hurdles to the implementation of the project.
“…There is not much information on the operations of ISA Group whose core competency is implementation and management of projects in West Africa…We believe this website was only created in 2018/2019 perhaps to lure the Government of Sierra Leone into this project venture,” a portion of the document reads in part.
The document sees the aforementioned factors as “critical commercial risks” which need to be resolved so that the project can be implemented in an environment described by Minister Vandi a ‘limited government risk environment.’
In view of the perceived risks, Hon Vandi requested ISA Group, in the correspondence, to furnish MAF with information about its competence in handling similar projects.
In its response to the Minister’s request, ISA Group set the records straight through a letter of 5th April, 2020.
The letter indicates that Agrotop is Israel’s leading company in agriculture, poultry, and piggery turnkey projects with a solid track record of project management and 80% share of the market in Israel.
Apart from the extensive review of the feasibility study and the estimated cash flow indicators undertaken by the Ministry of Finance, ISA Group also spoke about the Israeli bank’s overriding criterion prior to the issuance of a ‘term sheet,’ indicating the competence and credibility of the Project developer.
“Bank Leumi le-Israel issues a ‘Term Sheet’ only after completion of a detailed review of the feasibility study,” the document reads.
The information provided by ISA CEO indicates that the project sufficiently clears apprehensions held by the MAF Minister.
ISA, according to documents seen by nightwatch, seeks to create a training programme for capacity building under the intended project.
Working in concert with Njala University, a higher learning institution with a key focus on agriculture, is also a strong ISA determination.
A medical centre and school will also be constructed in the local community with a commitment to offering equal opportunities in the workplace.
Women will be involved in the sale of goods produced by the farm, and ISA group would also support the project by purchasing the product as food source for the poultry.
The production cycle in the Egg Farm will start from purchasing ‘Day Old Chicks’ for pullets growing them in pullet poultry houses
The composition of the Project Board of Directors indicates that the project is 100% owned by Sierra Leone.
The board comprises three representatives of the Ministry of Agriculture, two representatives of the Ministry of Finance, one representative from the National Revenue Authority, one representative from ISA Group with no voting right and the Chief Finance Officer to be appointed by the Ministry of Finance.
The delay tactics by the MAF Minister has the potential to derail President Bio’s move towards agricultural development in Sierra Leone.
It is no gainsaying that Sierra Leone is an agrarian nation blessed with a stretch of large arable land, water and comfortable weather climate.
It could be recalled that in the march, 2018 elections, President Bio campaigned on the platform of agricultural development to diversify the country’s economy.
With agricultural investment, President Bio is always highly hopeful that Sierra Leone’s foreign reserves could be saved and would ensure food self-sufficiency for the people of Sierra Leone.
In addition, the high number of unemployed youths in the country will be cut down as most will be utilised in farms and poultries.
Currently, repeated radio jingles on the country’s public broadcaster, the Sierra Leone Broadcasting Corporation announce the President’s policy of chiefdom farms across the country.
It is in direct response to the President’s call that ISA Group came in to invest in the agricultural sector.
As a demonstration of its commitment to agricultural investment in Sierra Leone, ISA Group has selected Agrotop, a leading global player in livestock turnkey projects to construct and implement the agro-industrial project.
Agrotop is also Israel’s leading agriculture operator with over sixty years’ experience in construction and project implementation. Agrotop has completed agriculture projects in more than forty-six countries worldwide.
PFSL is a poultry farming project established for the purpose of raising egg laying poultry birds for commercial egg production.
The project sets to establish a large and highly profitable farm in Sierra Leone.
Pullets and layers farms will be erected in the poultry farm under the ISA project. The former refers to one-year old chicken while the latter refers to mature hens that can lay eggs.
Pullet farms will house 128,000 thousand pullets until they are ready to lay eggs while layers farms house 120,200 birds for a particular period.
Besides, slaughter house, rendering plant and waste water treatment facilities will be erected in the poultry farm project of ISA.
The rendering plant handles the poultry’s by-products by transforming them into valuable proteins, minerals and oils.
The Corona Virus Disease (COVID-19) which broke out in November last year has not only weakened health systems of countries in the world, but also affected agricultural productivity.
Consequently, World Food Programme, one of UN’s specialised agencies has made a penetrating forecast of over 30,000,000 (thirty million) who are likely to face hunger and starvation.
Similarly, considering the low food productivity in African countries almost five years back, the UN Secretary-General of blessed memories has encouraged African countries to embark on agriculture to feed their people.
The late UN Secretary-General referred to the agricultural investment as the Green Revolution of Africa.
Agrotop | 21 September 2018
FREETOWN, Sierra Leone, Sept. 21, 2018 /PRNewswire/ -- The new government of the Republic of Sierra Leone has chosen Agrotop, a leading global player in livestock turnkey projects, and Integrated Solutions Africa (ISA) Group, which specializes in financial solutions and implementation of complex projects in Africa, to construct a large-scale layer and pullets farm at an investment of $60 million.
Agrotop and ISA will jointly build the new farm in the Tima and Njala areas of the Kiri Chiefdom, Moyaamba district. The farm will be comprised of 10,000 acres and will produce 195 million eggs a year.
The project is supported by Sierra Leone President Julius Maada Bio, and is part of the government's initiative to encourage the agriculture sector to increase local food growth and lower imports.
"Our vision is to build one of Western Africa's largest poultry projects which will help us in our efforts to improve nutrition, create new jobs and increase reliance on local production," said Josph Jonathan, Sierra Leone minister of Agriculture and Forestry. "We are happy to cooperate with leading companies such as Agrotop and ISA to build a model project that will improve overall welfare."
Deputy Minister of Finance Patricia N. Laverley added, "We view this as a very important project on a national level. "We are fully committed to its success and will provide all the required financial guarantees."
The project, which is expected to grow 720,000 birds per year, is comprised of six-layer houses, two pullet houses, an egg-packing center, feed mill and field crop. The farm is expected to create 2,000 new jobs. As part of the agreement, Agrotop and ISA will also build a community medical center, a school and a water purification system which will provide clean water to 25,000 citizens.
The new farm will be constructed within two years, and Agrotop and ISA will continue to provide management and know-how transfer services for ten years.
"We are happy to partner with the new government in realizing the vision of building one of the most advanced poultry farms in Africa," said Raphael Israel, ISA group president. "Our partnership brings together years-long experience and excellent relations with both government and local community. By joining forces with an experienced and reliable company such as Agrotop, ISA is well positioned to successfully complete this project," he continued.
"Sierra Leona has the ideal conditions for large-scale farming projects and I am sure that the farm will serve as a model for future projects in Sierra Leona and neighboring countries."
The farm will supply the entire needs of Sierra Leone's population for accessible and low-cost protein and will export eggs to nearby countries. According to a report published in 2016 by Sierra Leone Opportunities for Business Action (SOBA), the country imports 168 million eggs a year and only about 10 percent of total local egg consumption is currently supplied by domestic poultry production.
"We are thankful to the local government for trusting us with such a project, which illustrates Agrotop's ability to provide a wide range of livestock turnkey solutions," said Gavriel Pelleg, Agrotop's CMO and founding partner. "We take great pride in the fact that we have taken full responsibility for this project, from drafting the business plan and raising the capital, to the realization of this ambitious plan which will further strengthen Agrotop's position in the fast-developing African poultry market."
Agrotop has arranged the financing of the project by Israeli bank, which is backed by ASHRA The Israel Foreign Trade Risk Insurance Corp.