The issue about the lack of finance in the agribusiness sector has to do with lack of capacity and skills of players in the sector to manage the funding that comes, the Programme Manager of Mobile Business Clinic (MBC), Mr Marindame Kombate, has said.
He said the lack of investment in the sector was not solely an issue of investors’ reluctance to invest, but significantly, the lack of capacity of agribusinesses to understand investment opportunities and become investment ready.
He told the GRAPHIC BUSINESS in Accra prior to an agribusiness investment stakeholders meeting, under the auspices of Engineers Without Borders (EWB), a Canadian organisation that supports innovation in agriculture in Ghana.
He said: “Until the agribusinesses improve their skills and build their capacity so they can better solve their day-to-day challenges it will always be difficult to find investment-ready companies that can meet the selection criteria of many impact investors.”
MBC is one of the three social enterprises being supported by EWB to develop resilient small and growing agribusinesses and aims to deliver small and medium enterprise performance improvement and middle management capacity through innovative approaches to support the agribusiness sector.
The rest are Kulemela Investments and Growth Mosaic. In the mid-year review of the budget statement and supplementary estimates for 2014, government announced a boost for SMEs, which it said was the stimulus for the private sector and support to local industries.
Mr Kombate explained that a key advantage of the clinic, a convenient and practical three-month programme for leaders in agribusinesses nationwide, was that beyond the classroom training, it helped them to implement development goals to address some of the key challenges that businesses were facing.
The Portfolio Manager of EWB, Ms Megan Campbell, earlier at a press briefing, said the private sector could be the main driver of growth when organisations like the EWB played a role by helping to build the capacity of SMEs to increase the number of SMEs capable of receiving and successfully utilising available funding.
She said through its work with the enterprises at multiple stages of development, it shifted the way it did business to reflect operational realities in Africa.
“Through the social enterprises, we provide financial and strategic support to people who are taking the risk to show the rest of the financial sector that though it may be difficult to invest in agribusinesses in Ghana, it is possible,” she said.
SME funding
It said the Export Development and Agricultural Industrial Fund (EDAIF) had allocated a financial stimulus package for exports, pharmaceuticals, poultry, textiles and garments, SMEs and agro-processing sectors to enhance their competitiveness for growth and job creation.
During the period under review, five pharmaceutical companies that produced essential drugs were identified under this programme and so far, one application has been approved for funding. The other 4 applications are under consideration and funding will be approved shortly.
The cedi equivalent of US$10 million and GH¢9.7 million has been earmarked to facilitate the stimulus package for the Pharmaceuticals and poultry industries, respectively. An amount of GH¢10 million has also been set aside by EDAIF for the Youth Entrepreneurial Development Programme.
Funding has also been released by EDAIF to Irrigation Development Authority (IDA) for preliminary works to expand irrigation facilities for selected and other export crops in areas such as Tanoso, Nasia/Ligba, Okyereko, Tamne, Kamba, Sabare, Keta, Ho (Kpeve) Kpli, Amate and Mprumen to support smallholder farmers. As part of government’s measures to reduce rice importation, EDAIF has allocated GH¢20 million to the Ministry of Food and Agriculture to support local rice production. One thousand small-scale farmers in Bawjiase and Nsawam will be supported to increase production of fruits.