Dr Mohammed Amin Adam, Minister of State at the Ministry of Finance, speaking during the launch
Dr Mohammed Amin Adam, Minister of State at the Ministry of Finance, speaking during the launch

Smallholder farmers benefit from $69.7m project

The Ministry of Finance has launched a $69.7 million Affordable Agricultural Financing for Resilient Rural Development (AAFORD) project in Sunyani to benefit over 540,000 smallholder farmers in six regions. 

The beneficiary regions are Bono, Bono East and Ahafo in the middle belt, and the Northern, Savannah and North East regions in the northern belt.

Funded by the International Fund for Agricultural Development (IFAD), the project is expected to provide direct services to about 75,000 rural households and indirectly to about 465,000 individuals in smallholder households.

The project is specifically designed to provide financing to small-scale and large-scale farmers, farmer-based organisations, as well as micro, small and medium enterprises (MSMEs) engaged in agriculture-related businesses.

The goal of the project is to support food security and improve living standards of smallholder farmers, poor and vulnerable women, and youth in the regions.

Launching the AAFORD project, the Minister of State at the Ministry of Finance, Dr Mohammed Amin Adam, said the agricultural sector accounted for 54 per cent of the country’s Gross Domestic Product (GDP).

He explained that the sector contributed 40 per cent of Ghana's export earnings, while providing over 90 per cent of the food needs of the country.

He said a source from the Third Ghana Economic Update, 2020, by the World Bank showed that around 71 per cent of formal employment in rural areas was in the farming sector, indicating the importance of increasing agrarian incomes as a means of lowering rural poverty.

Dr Adam said agribusiness had a very high multiplier effect on employment, creating over 750 jobs for every additional $ 1 million of output as indicated by the Ghana Economic Update, 2018, yet agricultural growth was affected by low productivity and competitiveness.

He explained that because of the importance of agriculture to the Ghanaian economy and the livelihoods of the ordinary Ghanaian, governments over the years had introduced policies to boost the sector to improve the livelihoods of rural folks and curtail poverty levels among its citizens.

Dr Adam said the objective of the project would be achieved through increased access to affordable finance in support of better market linkages, sustainable and climate change adapted agricultural intensification, skills and enterprise development in agricultural value chains.

In addition, he said, the project would support inclusive policy engagement and build on the potential of women and youth as untapped resources for family resilience.

Rural poverty

Dr Adam said the project areas had a population of about 6,599,868 (Source GSS) suffering from high levels of rural poverty arising from relatively small cultivable areas, limited production, low yield, weak bargaining power and weak community institutions.

He explained that the people in the project area had little incentive to borrow funds to increase their investment in agricultural production, fearing that the uncertainties of markets and income could cause losses that could lead to loan repayment problems and adverse consequences related to it.

Dr Adam said smallholders in the project areas were also vulnerable to the effects of climate change such as droughts, changes in rainfall patterns and high temperatures.

He added that currently, they had little resilience to those adversities due to inadequate technical knowledge, limited incentives to borrow and invest in adaptation measures and limited access to affordable agricultural insurance services.

He said periodic droughts also affected the availability of nutritious food and the health of children and young mothers, adding that youth and women unemployment in the rural areas remained high due to the lack of employment and skills, mismatch of education and industry, inability of the economy to create new jobs and limited access to capital for the youth.


Dr Adam said the AAFORD’s intervention would assist smallholders and their associations in the regions in developing secured market linkages that could incentivise and stimulate those households to borrow and invest in increasing agricultural production, improving food security and nutrition and building resilience against the effects of climate change.

He said through AAFORD, the skills of youth and women entrepreneurs would be developed to have more access to finance to support a range of micro enterprises along the agricultural value chains as a way of sustaining increased production, productivity, value addition and income to target the households.

For his part, the AAFORD Project Coordinator, Godwin Anku, said the project had targeted 80 per cent of smallholder farmers, 20 per cent of market-oriented and large farmers, 50 per cent of women, 50 per cent of men, and 40 per cent of youth between 15 and 35 years.

He said the objectives were to improve productivity, income and resilience of smallholder farmers, vulnerable women and the youth.

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