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Business News of Monday, 13 December 2021

Source: thebftonline.com

Decline in donor funding reduces agric budget by 12.9% - Report

Food and Agriculture Minister,  Dr Owusu Afriyie Akoto Food and Agriculture Minister, Dr Owusu Afriyie Akoto

A drop in budgetary allocation to the Food and Agriculture Ministry to GH¢1.1billion in 2022 compared to the inflation-affected allocation of GH¢1.2billion in 2021 – with GH¢1.18billion being actual allocation for this year, will make the agriculture sector budget decline by 12.9 percent in real terms next year.

The decline, according to an analysis by SEND Ghana, is mainly due to the reduction in donor funding to agricultural activities in the country.

Indeed, donor support and funding to agriculture has been dwindling in recent years, with major reductions as some notable developmental partners, including the Canadian government, brings their funding schemes and support for the sector to an end by 2022.

In two years’ time, from 2023, donor funding to the sector in Ghana is expected to cease from most development partners (DPs).

Reliance on donor funds for financing agriculture activities has reduced – from GH¢598.5million in 2021 to GH¢293.1million for 2022 – according to the agriculture budget.

Allocations have also for many years not been able to meet the Comprehensive Africa Agriculture Development Programme (CAADP) benchmark policy, of which Ghana has been a signatory since 2003.

The CAADP is the Africa Union’s policy framework for agricultural transformation, wealth creation, food security and nutrition, economic growth and prosperity – which stipulates that all participating countries must commit at least 10 percent of their annual national budget to agriculture funding.

Conversely, budgetary allocation to the sector in the last decades have struggled to meet the 10 percent threshold – constantly being pegged at less than one percent. The cycle for next year is not any different, as MoFA’s share of the 2022 national budget stands at only 0.8 percent – not even up to one percent as it has been in previous years.

SEND Ghana however argues that the agriculture sector truly has the potential to generate revenue for government, but only when investments are made at the appropriate places. SEND maintained that the decrease in the ministry’s budget for 2022 may not have effects on food production which result in food shortages, since 90.2 percent of allocation constituting an amount of GH¢554million has been apportioned to the Planting for Food and Jobs policy.

This money, MoFA says, will be geared toward the purchase of agro-inputs for the 1.5 million smallholder farmers across the country who are beneficiaries of the PFJ.

However, success for the PFJ in 2022 can only be achieved if government pays distributors of agro-inputs on time and adequate inputs are transported to the districts for access by farmers before the planting season begins.

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