President Akufo-Addo has made a passionate appeal to industry leaders in the financial sector of the country to as a matter of necessity, increase the level of support they advance to farmers, the agriculture sector and the private sector as a whole in order to shore-up the country’s gross domestic product (GDP) growth.
Speaking at the Presidential breakfast meeting on Agriculture and Agribusiness financing organized by the Ministry of Food and Agriculture (MOFA), today 16 October 2023, at the Kempinski hotel, President Akufo-Addo said even though Ghana is currently the second biggest economy in the West Africa Region, it is a matter of record that the country’s financial institutions provide the lowest amount of support to the agriculture sector and the larger private sector in the Region.
The President observed that it beats his imagination that a bank like the Agricultural Development Bank (ADB) will provide 20.4% of its loan portfolio to the agriculture sector. For the most successful private bank in Ghana, Fidelity Bank, it came up that it dedicates 10% of its loans set to agriculture and the GCB Bank on the other hand, commits 25% of its loans range to the agriculture sector.
“I find it difficult to understand that an organization that is called the Agricultural Development, you would have thought that, its loan portfolio, the clear majority of it will be geared towards agriculture, but that is not the case. This is a matter that we have come here to resolve – how we can get more money into agriculture” President Akufo-Addo said.
“To hear the statement that the level of credit that has come true our financial system to the private sector is one of the lowest in West Africa is also a very disturbing phenomenon. We are lower than Senegal, Cote D-Ivoire and the others. All of this is against the background where we are still the second biggest economy in West Africa” Akufo-Addo added.
“If with that situation (being the biggest second biggest economy in West Africa), the amount of money from the banks to the private sector is the lowest in West Africa, the mind boggles, you just wonder, if these figures were to raise up a little bit, the transformation that it will bring to our GDP growth. So, we need to look at that and you are the right people to look at it” the president further stated.
Minister For Food and Agriculture, Bryan Acheampong, in his address noted that on the downside, the challenges impeding the growth and development of agriculture are in three forms. All the three, he noted, has everything to do with the availability of credit to players in the agriculture and agribusiness sector.
“The first has to do with credit—and here I mean access to credit for the procurement of seeds and fertilizers, agriculture machinery, and working capital. The second, unfortunately, is also credit—and here I mean the cost of the credit.
“The third one, ladies and gentlemen and senior bankers here present, is also credit, and this time it has to do with the timing of disbursements for the fortunate few who are able to go past the bank’s rigidities” the food and agriculture minister, Dr Acheampong said.
“So, in sum, the solution to the major challenge that we have identified as impeding the growth of the agriculture sector is credit, and it is in the hands of the people who make the decision to finance agriculture. In light of this state of affairs, sticking to the same strategies for addressing the problems of the sector was a no-brainer.
“On the part of the government, we have changed course by reviewing the Planting for Food and Jobs (PFJ) program and transforming it into an input credit system. We therefore expect a similar course correction on the part of you, our distinguished bankers, as partners who are not only driven by profit but also by our collective national development agenda. We cannot continue to do the same thing and expect different results” Dr Acheampong added.
To prove his commitment to the PFJ and to convince the banking sector to support the initiatives, Dr Bryan Acheampong gave three (3) examples of the interventions that MOFA is are putting in place to make this happen.
On the poultry industry, Dr Acheampong said “while we (Ghana) consume a total of 324,000 MT, we are only able to produce just about 15,000 MT, implying a woeful self-sufficiency of under 5%”.
“In our five-year plan, we will move our self-sufficiency from 5% to 7% by the end of 2023, and to 13% in 2024, and progressively attain full self-sufficiency of 110.6% by 2028. Specific steps that we have taken in this regard are as follows:
“In the immediate term (October to December 2023), we are supplying 4.5-million-day-old chicks, vaccines, and starter-pack feed to anchor farmers and their out growers. This intervention will result in the production of an additional 13,200 MT of poultry meat by the end of this year, which will increase our self-sufficiency to 7%” Bryan Acheampong said.
“In 2024, we will ramp up this support to 18-million-day-old chicks, vaccines, and starter-pack feed, which will lead to the production of 42,600 MT of meat and increase our self-sufficiency to 13%. This trajectory will continue until we reach full self-sufficiency.
“We are also reviving the poultry industry this year through the rehabilitation of 300 out grower poultry farms across the country over the next 12 months. Each of these farms can be scaled to produce 200,000 birds within each poultry cycle of 4 months” he added.
Similarly, for rice, the agriculture minister said the ministry is “rolling out specific interventions to increase local production and reduce import levels and the national target he indicated, is to attain self-sufficiency in 2028 with a total paddy production of 3.31 million MT (equivalent to 1.82 million MT of milled rice).
“This will require putting 690,059 hectares of land under cultivation, and with just 381,663 hectares currently under cultivation, we have to put an additional 308,396 hectares into cultivation over the next 5 years. In this regard, and over the next 12 months, we will be investing in the development of 50,000 hectares of land under an agro-economic enclave project.
“We are also undertaking the rehabilitation and expansion of a number of irrigation schemes that would see the construction of 50,000 hectares of irrigated land in the inland and lowland valleys, which give the highest yields for rice (average of 6.5 MT per hectare)” the food and agriculture minister disclosed.
On the manpower front, Mr Acheampong said the ministry will engage 70,000 young people to go into rice farming out of the 200,000 people the YEA intends to employ under their Youth in Agriculture module.
All these specific interventions, the agriculture minister said will result in increased production levels from the current 684,761 MT to 907,790 MT in 2024 and push our self-sufficiency level from 47.5% to 59.4%.
“Sustaining these interventions will ramp up subsequent years’ production levels to reach 1,823,577 MT by 2028 with a self-sufficiency of 106%, with attendant savings in our import bill.
“This is just a summary for you to appreciate the agricultural reconstruction that we have set in motion. Phase 2 of the PFJ will be the single biggest agricultural revolution in this country, and we believe that Ghana will achieve food security” Dr Acheampong remarked.
“Our mission here today is to invite financial institutions into this national development conversation. We need to establish a nexus for greater collaboration in pursuit of our collective objective of transforming Ghana’s agriculture” he further remarked.
There were two panel discussions as part of the event. The first was on the topic; “Challenges and Opportunities in Agricultural Financing.” The panel included the CEO, GIRSAL, Kwesi Korboe, Managing Director of ADB, Alhassan Yakubu-Tali, Managing Director of Fidelity Bank, Julian Opuni and the CEO of Opportunity International, Kwame Owusu-Boateng.
The second panel considered the topic; “Enhancing the Enabling Environment for Effective Agricultural Financing”. The panel comprised of CEO of the Development Bank Ghana (DBG) Kwamina Duker, 2nd Deputy Governor of the Bank of Ghana, Elsie Addo Awadzi and CEO of the Ghana Association of Banks, John Awuah. Both panels were moderated by Bernard Avle of Citi FM/TV.