ADB commits to more agriculture finance — Loan disbursements hit GH¢1b
Agriculture Development Bank (ADB) has pledged its full commitment to provide the needed funds to help build a robust agriculture sector capable of ensuring food security and sustainable development.
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The Managing Director of ADB, Alhassan Yakubu-Tali, who gave the assurance, said although the agriculture sector was perceived as a risky venture, the bank would stay its original mandate to provide financial intermediation to the agricultural sector players.
"When you analyse the challenges in the agriculture sector, ranging from the perceived risky nature of the industry, land tenure system and absence of long-term funds, many banks shy away from financing the sector.
However, for ADB, these challenges still present opportunities and we continue to keep faith with the sector," he said.
Mr Yakubu-Tali stated this when he paid a courtesy call on the Minister of Food and Agricultural (MoFA), Dr Bryan Acheampong, to congratulate him on his appointment.
The visit was meant to assure the minister of ADB's support to the ministry.
Investments
Currently ADB’s investment in the agriculture sector has grown steadily, with total agricultural loan hitting over GH¢1billion as of April, 2023.
This excludes the volumes of non-funded facilities such as letters of credits and guarantees granted for the purchase of agricultural inputs, machinery, equipment and raw materials.
The ADB has also financed major government programmes such as the Planting for Food and Jobs (PFJ), Rearing for Food and Jobs (RFJ), Planting for Export and Rural Development (PERD) as well as the One-District, One-Factory Initiative (1D1F).
For instance, under the PFJ, the ADB invested over GH¢100 million to support the purchase of fertilisers and certified seeds to various companies.
Additionally, the bank disbursed over GH¢151.8 million to 21 viable projects to undertake various initiatives under the PFJ programme.
Between 2018 and this year, the bank has disbursed in excess of GH¢460million to the National Food Buffer Stock Company (NAFCO) to support the purchase of stocks harvested under the PFJ programme as well as ensure constant food supplies to the free senior high school (FSHS) programme.
Again, in 2020, the bank launched a GH¢500 million soft loans broiler revival programme dubbed "ADB Broiler Value Chain Programme" to contribute to the government’s effort at reducing the importation of poultry into the country.
ADB has also supported the fishing industry by importing outboard motors and fishing gear for sale to fishers at costs either under lease financing or through direct sales.
For instance, in 2020, the bank invested GH¢19.8 million in the importation of 1,300 Yamaha outboard motors for the Ministry for Fisheries and Aquaculture Development (MoFAD) and the Coastal Development Authority (CODA).
The bank further invested in excess of GH¢485 million in rubber, oil palm and mango plantations under the PERD initiative aimed at promoting perennial tree crops.
Assurance
Mr Yakubu-Tali added that after those direct investments, ADB had kept faith with the agricultural sector by being the lead sponsor of the National Farmers Day Celebration since 1987.
He assured the minister that the ADB was ready to continue to partner the government in the mutual quest to ensure food security in the country.
"We trust that we can work together to achieve all objectives of the ministry," he said.
Appeal for tax rebate
Touching on the way forward for the agriculture sector, he called on the government to commit to providing tax incentives, tax holidays and rebates to institutions engaged in agriculture financing and development.
Additionally, he said there must be a robust agricultural research and extension systems to support improvement in agricultural productivity and the availability of dependable data to drive planning and policy direction in the industry.