Parliament approves $5mn loan with BADEA

Accra, Aug. 20, GNA - Parliament by a vote of 103 for, approved a loan of five million US dollars between Ghana and the Arab Bank for Economic Development in Africa (BADEA) to support the agricultural sector.

The loan is aimed at helping increase substantially the production of staple food crops and poultry products to strengthen domestic food security, increase farm incomes and generate foreign exchange earnings. It would also increase the output of and diversify the base of non-traditional exports through expansion primary production as well as processing of agricultural products to secure increased value added.

The line of credit would be administered the Agricultural Development Bank (ADB) nation-wide and the proceeds would be utilised to purchase machinery and equipment for irrigation and land preparation as well as procure fertilizers, other agro-chemicals, animal feed ingredients and veterinary drugs.

Presenting the report on the loan, the Chairman of the Finance Committee, Mr. Eugene Atta-Agyepong said negotiations with the ADB is underway to ensure farmers benefit fully from this facility and that the ADB would be encouraged to use the rural banks in the disbursement process for the full implementation of the project.
The loan has a repayment period of nine years, three years grace period and an interest rate of 3.5 percent, adding that the committee, though felt that the interest rate was on the high side, the BADEA responded by saying that it would increase the initial grant element of 25.47 percent to 45 percent amount to 500,000 dollars which would be used for institutional support.

The BADEA is one of the key development partners with Ghana interested in wealth creation and poverty reduction in the small and medium enterprise sector and is supporting Ghana's agricultural sector through the granting of the facility.