Minister of Finance and Economic Management, Johnny Koanapo, who is currently in Lakatoro on Malekula says the paper for the Agriculture Bank has been tabled before the Council of Ministers yesterday morning.
This was a joint paper by the Ministry of Finance and Ministry of Agriculture.
“Basically, that paper is part of the broader financial sector reform, which the government is engaged in, particularly in this case for the Agriculture Bank, given the government overall policy to refocus on the productive sector.
“So, we’ve to ensure that the institutions, including financial institutions such as Agriculture Bank must be able to have the systems in place to drive government policy but at the same time when it comes to financing, you’ve got to have the financial mechanisms in place that is transparent and accountable,” he said.
That is why the government has taken a broader policy direction to review the Agriculture Bank based on the policy announced by the Prime Minister during his Yumi 40 speech on July 30.
This means the Agriculture Bank Act will be reviewed.
The government wants to ensure that the institution is able to absorb funds that the government is willing to invest in it so the government can offload funds that can be used as affordable credit to local business people in rural areas, particularly in rural areas, in the productive sector.
The Council of Ministers has approved for the Agriculture Bank legislation will be reviewed and go before parliament in 2021.
The minister says the review will look at the governance structure of the banks and this includes financial mechanisms that will ensure there is accountability and transparency.
At the moment the bank cannot take deposits.
This legislation review will look at improve governance system, ensure there’s proper fit and proper persons in place and ensure that the Reserve Bank has overall oversight like other commercial banks.
The plan is for the bank to operate in a normal commercial manner.
Meanwhile, the minister says the Council of Ministers has endorsed the roll out of 3 billion vatu to all businesses in Vanuatu.
The minister also revealed that an additional amount approved by COM, is rolled out to meet the commitment made for the A220 Airbuses, done during the tenure of the former government.
Mr Koanapo wants the Airline to be restructured.