Parliament has approved a $52 million loan agreement between Ghana’s government and the International Fund for Agricultural Development (IFAD).

The loan will be used to fund the initiative Promoting Rural Opportunities, Sustainable Profits and Environmental Resilience (PROSPER).

The loan is a combination of $35 million in regular loan and $17 million in concessional loan.

The project according to the government is to improve the integration, climatic resilience, and environmental sustainability of smallholder farmers and companies functioning in important value chains in the Northern and Middle Ecological belts.

It will also leverage the increased demand generated by the national agro-processing strategy, which seeks to enhance the agricultural sector’s value addition and increase its contribution to the national economy.

Vice Chairman of the Finance Committee, Patrick Boamah, presented an outline of the terms and conditions of the loan agreement.

The loan has a repayment period of 20 years, allowing sufficient time for the government to repay the borrowed amount.

Furthermore, the loan comes with a five-year grace period, which provides an initial period during which no payback is necessary.

The loan agreement specifies a service charge of 1.48 percent per year as the price paid to IFAD for loan administration. In addition, an annual interest rate of 1.36 percent will be charged to the loan’s outstanding balance.

The initiative is intended to have a substantial influence on the agricultural sector in the targeted regions, increasing the resilience and profitability of smallholder farmers and companies while also supporting sustainable practices and environmental protection.