The Agricultural Development Bank (ADB) says it intends to take advantage of the high local and foreign demand for value-added agricultural products to expand agro-processing businesses in the country.
Making this known recently on Uniiq Fm, an Accra-based radio station during the Investor Dialogue Series on the challenges and opportunities within Ghana’s agricultural sector, Sylvia Nyanteh, Executive Head of Agriculture Finance Department, said European and North American demand for fresh fruits, vegetables and other non-traditional crops from Ghana continue to increase.
‘The potential for this sector is bright and is also a source of foreign exchange for the country. The expansion of the mandate of EDAIF to provide long term loans to the agricultural sector is one the bank intends to take advantage of to deepen it support to the agricultural sector.’
Ms Nyanteh said that Government’s intention to commence construction under the Accra Plains Irrigation Projects covering 11,000 hectares of land will provide opportunities for both the bank and farmers to expand the cultivation of cereals, vegetables and other food crops.
‘The development of the national seed policy will ensure that only good viable seeds are sold on the market. This is expected to increase crop yields and revenues for farmers and improve their ability to pay their loans.’
She added that the establishment of a turnkey fish processing plant at Elmina will reduce post-harvest losses and increase the profitability of operators in the small-scale fishing industry.
Noting that Government intends to commence an accelerated aquaculture development strategy to improve fingerlings and provide feed to farmers this year, she said, ‘ADB intends to take advantage of this strategy and deepen credit to the aquaculture sector considered by the bank as one of the most viable sub-sectors in agriculture.’
She however mentioned irregular rainfall pattern, sharp depreciation of the cedi, increase in the cost of inputs and raw materials, cheap imports of agricultural products such as chicken as well as market and price risks, especially for exporters as some external challenges confronting ADB.
Ms Nyanteh also stated that the lack of support services, irrigation, storage facilities, markets, among others, constituted additional problems.
She cited over-reliance on debt to fund projects to provide adequate equity to reduce debt burden, commencement of start-up projects on a large scale, failure to identify and estimate all costs associated with projects leading to cost overrun, the inability of project promoters to provide data and accurate information required to analyse projects and the failure of promoters to identify reliable sources of raw materials especially for agro-processing businesses as some challenges confronting the bank internally.
She said the failure of project promoters to adhere to export standards, inability to provide adequate security, inability to mitigate post-harvest losses, diversion of funds and willful default militated against efforts by ADB to support agriculture.
Furthermore, she said the absence of long term funds at concessionary rates to finance medium-to-long term projects, high administrative cost due to the large numbers of small farms scattered all over the country and the inability to disburse funds on schedule due to applicant’s failure to meet pre-disbursement conditions formed part of institutional challenges of ADB.
By Samuel Boadi