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Business News of Saturday, 14 September 2019


Cheaper lending to agric on the horizon – Ofori-Atta

Finance Minister, Ken Ofori-Atta Finance Minister, Ken Ofori-Atta

Finance Minister, Ken Ofori-Atta, is optimistic that government’s US$410million Ghana Incentive-based Risk Sharing System for Agriculture Lending (GIRSAL) programme, will soon lead to increased lending for players in the agriculture value chain.

Speaking at the 35th National Best Farmer’s Day launch in Accra, Mr. Ofori-Atta said: “We anticipate that properly-managed banks with stronger balance sheets will be able to develop appropriate financial products to support the operations of farmers and entrepreneurs in the agriculture value chain”.

Themed ‘Enhancing Small-Scale Agriculture toward Agribusiness Development’, this year’s Farmer’s Day celebration will take place in the Volta Region on Friday, December 6, 2019.

The minister’s comments come on the back of the US$10million loan facility Parliament approved in March this year. The facility was made available by the African Development Bank to begin implementation of a project aimed at lowering credit risk in the agriculture sector. The remaining US$400million under the project is expected from government.

The project – the Ghana Incentive-based Risk Sharing System for Agriculture Lending (GIRSAL) programme – which was designed by the Bank of Ghana (BoG) in collaboration with the Ministry of Food and Agriculture (MoFA) and the Alliance for Green Revolution in Africa (AGRA) in 2017, is part of a wider plan to de-risk lending to agric-related businesses.

Under the programme, the Bank of Ghana is expected to provide guarantees to cover 75 percent of commercial banks’ lending to smallholder farmers in the country.

Mr. Ofori-Atta further noted that government’s commitment to revamp the agriculture sector remains unflinching, and that government has over the years demonstrated this commitment through interventions such as the Planting for Food and Jobs (PFJ), One District, One Factory among others.

Under the PFJ programme, he said farmers are benefitting from implementation of five modules strategically designed to transform the country’s agriculture.

They include the food crops module under which subsidised fertiliser and improved seeds are being distributed to farmers; the Rearing for Food and Jobs component, and the greenhouse technology and mechanisation modules.

He also expressed confidence that these interventions, when implemented at full capacity alongside other innovative initiatives, running concurrently, will fully harness the country’s agriculture potential.

He added: “This will surely catalyse the advancement of government’s transformation agenda and attaining the goal of a Ghana Beyond Aid”.

To buttress his point that the sector has witnessed progress in the last few years, the minister said the growth rate was doubled from 3.19 percent in 2016 to 6.1 percent in 2018 – making it the fastest-growing sector and engine of growth for the economy over the last three years.


The GIRSAL project is designed to improve financing and lower its costs for smallholder farmers nationwide, by reducing credit risk. It has six major pillars: namely digital finance, agricultural insurance, risk-sharing, bank incentives mechanisms, bank rating schemes, and technical assistance.

In the 2019 budget of the Food and Agriculture Ministry, an amount of US$410million was voted to de-risk the sector through agricultural insurance cover for farmers and their produce. AfDB subsequently committed to providing a loan facility to support this initiative.

Although government’s initial request was for a US$50million facility from the AfDB for the project, the bank said it could only offer US$10million at the time.

This means that the remaining US$400million will have to come from government, or alternative sources of funding.