Increase financing to agric sector – Finance Minister

Financial institutions have been urged to increase financing to the agriculture sector to boost production and enhance livelihoods.

Mr Kwaku Kwarteng, a Deputy Minister of Finance, who made the call, said allocation of loans by the financial institutions to the agriculture sector over the years had been woefully inadequate.

In the last 10 years, the average lending by the financial industry to the agricultural sector stands at 4.5 per cent.

Mr Kwarteng said this in a speech read on his behalf at a dissemination workshop on agriculture finance policy analysis in Ghana.

The workshop was to disseminate the findings of a survey undertaken by the Agriculture and Agribusiness unit of the Real Sector Division on the topic: “Agriculture Finance Policy Analysis in Ghana.”

The study was funded by the United States Agency for International Development to review and propose recommendations for policy decision making.

Mr Kwarteng said agriculture remained a critical sector to the economy and its financing should not be left on the shoulders of the government alone.

“Given the limited resources for the agriculture sector, the private sector support should be deemed as the driver of the growth of the sector,” Mr Kwarteng said.

He said government had outlined a number of initiatives to revamp the sector, including planting for Food and Jobs, Fertilizer Subsidy Programme, and the Ghana Commercial Agriculture Project.

Mr Kwarteng said the new study would help address financial challenges facing the sector and the recommendations would be incorporated in future agricultural policies.

Presenting the highlights of the report, Mr Francis Osei, a consultant, said the study, among others showed that agriculture in the country was largely being financed by governments and development partners.

He said banks were unwilling to provide loans to Small Scale farmers due to the high risks factors associated with small-scale farming.

Among, other recommendations, he said the Insurance Law should be amended to cover agriculture insurance and also the need for National Policy review on agricultural financing and funding.

Source: GNA