By: Linda Dede Nyanya Godji.
Despite the enormous benefits of agriculture , financing remains one of the bottlenecks to fully develop its potentials in the country. It is for this reason the Vice President, Dr. Bamudu Bawumia, has admonished key stakeholders within the financial sector to find new strategies to finance businesses within the agricultural value chain.
He said agricultural remains the key contributor to the country’s development and to achieve its vision of self-reliance and shared prosperity, the financial sector should consider diversification rather than continuing to stick to the path of traditional lending scheme.
“Agricultural financing is key for the growth of the sector and lack of financial resources limits the average size of farms, productivity, growth and its contribution to the economy. “He stated.
He was speaking at the virtual launch of the USAID support for Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity. The four year project is under the theme “Financing Ghana’s Agriculture – a critical pathway towards sustainable growth, self-reliance and self- Prosperity.” The USAID MFA activity is the 1st activity launched under the US Global Food Security Ghana Strategy Plan.
The Vice President stated that the focus of the project resonates with government’s vision of a Ghana beyond Aid which is in line with the USAID’s Journey to self-reliance.
He said the support of the US government towards the sustainability of Ghana’s agricultural sector cannot be over emphasized, indicating that the USAID MFA project will also add up to other support by the US by enhancing Ghana’s Agricultural Potentials. He pledged Government’s committed to ensure a stable financial environment towards the execution of the project and also encourage agricultural financing in the country.
Dr. Bawumia asked players in the financial sector to reconsider the notion that agricultural financing is too risky and take bold steps and fit for purpose lending tools and instruments to support agriculture.
Some major reasons Agricultural Financing is limited in the country
• Financial institutions see agriculture as High risk.
• Farmers and other actors in the value chain are often unable to present collaterals associated
with loan acquisition. Women farmers being the worse affected.
• The inability of the financial institutions to develop suitable financial packages and lending compared to other trade and industrial activity.