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Mr Bedu Addo (left) with other colleagues from Stanchart at the news conference to announce the bank's 'Here for Africa' campaign.
Mr Bedu Addo (left) with other colleagues from Stanchart at the news conference to announce the bank's 'Here for Africa' campaign.

Structured agric sector can attract bank funding - Bedu-Addo

The Managing Director of Standard Chartered Bank, Ghana, Mr Kweku Bedu-Addo, has called on West African countries including Ghana to under study the structures and nature of agricultural practice in east and southern Africa.

That, he said will help make agricultural financing more attractive to banks which will in turn lend their fullest support for the ailing sector.

“The structure of agriculture in West Africa as a whole and Ghana in particular in poorly structured and therefore the risk in that sector is high”, he said at a news conference in Accra on July 27 where the Regional Chief Executive Officer of Africa & Middle East, Mr Sunil Kaushal, announced bank’s “Here For Africa” campaign.

Through the new brand campaign, ‘Here for Africa’, the bank reiterated its commitment to investing in Africa’s future, and continuing to support key growth sectors across local economies, including infrastructure, telecommunications, transport, retail and trade. 

Missing in the bank’s campaign focus seem to be the agricultural sector which is the most dominant in terms of labour force but Mr Bedu-Addo noted that, where there were opportunities within the sector in countries where the bank finds itself, funds were allocated to help support the agrarian sector.

He mentioned Botswana for instance in the southern coast of Africa and noted that the structure of the agricultural sector was such that releasing funds to support it was considered virtually risk free unlike many countries in the West.

Risk/Growth

In Ghana for instance, the agricultural sector alone employs more 60 per cent of the workforce. However, the sector is the least supported by both government and the banks.

In the case of the banks for instance, the sector is considered most risky because of its unstructured nature. As a result, most of the players within the sector engage in more subsistence farming as against large scale. The lack of support for the sector is among the many reasons that the agricultural sector lags behind in terms of its support toward gross Domestic Product (GDP).

For instance in the supplementary budget presented to Parliament last week, the Finance Minister Seth Terkper, said in the Agriculture Sector, all the main subsectors recorded positive growth rates, with the Livestock subsector recording the highest growth of 5.3 per cent. Overall, Agriculture registered a growth of 2.4 per cent, compared with the 2014 growth of 4.6 per cent. 

However he pointed out that “Declining growth trends in Agriculture have often coincided with declining growth rates in the Crops subsector due to the weight of the subsector. 

Meanwhile, the rhetorical commitment towards the sector was demonstrated when the Finance Minister said that effort continues to be made to address the challenges in the sector including ensuring that fertilizers are released to farmers on time.

Stanchart support

Mr Bedu-Addo said Standard Chartered bank has been lending some support the agriculture sector in Ghana.

He could not however immediately provide the quantum of funds released per annum to support the sector but noted that the funding was cautiously done to considering a lot of risk factors. 

According to him, once the sector is well organised not much can be done although the banks are aware of the potentials thereof.

• Writers email: [email protected]

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