Stakeholders in Ghana’s agricultural sector on Thursday, converged at a forum in Accra, to brainstorm on the best ways to access funding from financial institutions for expanded production.
The two-day forum was jointly organised by the GIZ, the Competitive Cashew Initiative (ComCashew), Solidaridad and the African Cashew Alliance, with funding from the Swiss State Secretariat for Economic Affairs (SECO) under its Ghana Private Sector Competitiveness.
It event was held under the theme: “The Role of Financial Institutions in the Agricultural Sector,” with a focus on the Cashew and Oil Palm Value Chains.
Ms Rita Weidinger, the Executive Director of the Competitive Cashew Initiative, said the agriculture and agribusiness sector in sub-Saharan Africa were estimated by the World Bank in 2016 to reach one trillion dollars in value by 2030, up from 313 billion dollars in 2010.
However despite the growth, agribusiness were faced with a multibillion-dollar financing gap estimated at 11 billion dollars annually, she said.
She said it was in this regard that connecting providers of funds with agribusinesses has become crucial, especially at a time when traditional banking and financial products have failed to meet the needs of this sector mainly due to a lack of understanding of their operations and also the associated risks of agricultural value chains.
The forum sought to address the gaps, to enhance the knowledge of the financial institutions on processing and the agribusiness dynamics in Ghana to help increase the financial support allocated to the respective businesses.
Ms Weidinger said some processors have already been taken through human development and capacity building workshops which helped in shaping and conceptualising their business models into business plans and proposals.
She said based on the outcome of the forum ComCashew, Solidaridad and the Africa Cashew Alliance would continue to guide selected participants to eventually secure suitable and long-term funding needed for business expansion and development.
Mr Ron Strikker, the Ambassador of the Netherlands to Ghana, said the oil palm and cashew sub-sectors and agriculture as a whole, were still perceived as risky hence the need for a concerted effort on investment and financing in order to reduce the risks.
He said efforts were being made to de-risk financing in the cashew and oil palm sub-sectors, so that public money would be leveraged with commercial funding to scale-up efforts made by development agents such as Solidaridad.
Mr Papa Kow Bartels, a representative of the Ministry of Trade and Industry (MoTI), commended the organisers for the timely initiative, saying despite the positive outlook, borrowing costs remained high, with the current financing solutions from the banking sector not best suited for the dynamics of the agricultural sector, due to the inflexible and unfavourable terms.