Banks urged to change perception about agriculture
The Deputy Minister for Agricultural, Dr Alhassan Ahmed Yakubu, has urged financial institutions in the country to change their perception about agricultural by releasing funds to support the sector in order to make it productive.
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He said many banks were limiting their support to the agricultural sector because of its perceived high-risk, a situation he said was hindering the growth of the sector.
The deputy minister said this at the maiden Joy Business Busy Talks which was held in Accra last week.
“Banks are reluctant to lend to agriculture because they believe the risk factor is overwhelming. For the Agric sector to be a success, however, they would need financial support from the banks,” he said.
He, therefore, urged the financial institutions to provide the farmers with the needed funding, stating that it is of no use if the farmers had the technology, the natural resources and the know-how but lacked the funds to see them through.
Agric contribution to GDP
Dr Alhassan Ahmed Yakubu also pointed out that the government was not worried about the declining contributions of the agricultural sector to GDP, but was rather worried about the poor productivity of the sector.
He said the decline in the sector’s contribution meant that the government was shedding off some of its activity in the agricultural sector to other sectors.
“The economy cannot be solely dependent on agricultural and that is why we are shedding off some its activity to other services sector. That is the vision of the country,” he stated.
A representative from the African Centre for Economic Transformation, Dr William Baah Boateng, said though he agreed with the deputy minister that the reduction of the agricultural sector’s contribution to GDP signified a change in the structure of the economy, it had not been positive for the country.
“If you look at the structure of our economy, agric now contributes 21 per cent to our GDP from the 50 per cent that we saw in 1984. However, we shouldn’t look at just the contribution but the growth of the sector compared to other sectors,” he said.
He said statistics available indicated that agricultural sector grew by 3.9 per cent between 1993-2013, while the manufacturing sector also grew by 4.2 per cent on average within the same period.
“We expected that if agric is going down then manufacturing should go up. In this case agriculture becomes an input instead of the final product. But manufacturing’s contribution to GDP is also going down as it has moved from 10 per cent in 1984 to 5.8 per cent, so where is agric shedding its activity to?” he asked.
He said that was a worry because if the economy was transforming then the country should have shed off its agricultural activities to the manufacturing sector and then to the services sector but said government had leapfrogged from the agricultural sector to the services sector.
“For our economy to grow, we need to improve productivity in the agricultural and manufacturing sectors. If we improve productivity in these sectors, then we will reduce poverty,” he said.
Effective collaboration
The Strategic Director for Technology firm, M-Pedigree, Selorm Branttie, emphasised the need for effective collaboration between government and the private sector to harness opportunities in the sector to the benefit of the economy.
"It’s about time we started looking at the agricultural sector very well and opened it up in such a way that people will not see it as a machete and hoe kind of activity but more as a business activity that has input and output just as any business activity," Mr Branttie said.
He added that "we are not doing enough even though we have the capacity to do more. We should be willing to do more and be able to tweak our perceptions about what agriculture is and engage other stakeholders in making agriculture far smarter and better than it is right now."
The sector, if taken seriously, could experience a boost in marketability, which will eventually bring in substantial foreign exchange and very good income for farmers. The ultimate benefit would be a growth in agriculture’s contribution to Ghana’s Gross Domestic Product (GDP).