The Bank of Ghana says it has initiated measures to address challenges facing the country’s agric sector as part of efforts to improve the sector’s contribution to economic growth.
Agriculture’s contribution to GDP has been declining over the years partly due to the low output of farmers as well as other constraints in the value chain.
Some reasons cited as accounting for the decline include; inaccessibility to funding, unfavourable weather pattern as well as poor infrastructure such as road and storage facilities.
The development has also impacted massively on the country’s expenditure as more resources are channeled into importing to meet the consumption needs of the people. But Governor of the Bank of Ghana, Dr. Abdul Nasir Issahaku has disclosed that the central bank has earmarked about 100 million dollars to fund the central bank’s strategy to improve Ghana’s agricultural sector.
According to him, the funding will among other things reduce the high risks associated with agriculture which prevents banks from lending to players in the value chain.
The strategy which is collaboration with the Ministry of Agriculture and AGRA focuses on risk sharing, technical assistance insurance; bank incentive mechanism, bank rates, digital financing and non financial services insurance.
“The central bank in collaboration with the Ministry of Food and Agriculture and AGRA, have been working tirelessly to implement the Ghana Incentive based risk sharing agricultural lending borrowed from Nigeria and Kenya.
At the moment, the central bank has earmarked close to 100 million dollars for this project. The broad aim is to leverage substantial flows of investment funds and support of agriculture across the value chain,” the governor said.
Dr. Issahaku who was speaking on financing challenges confronting SMEs at the maiden SME fair, Dr. Issahaku was optimistic the intervention will ultimately reduce the country’s food import bill.