The Agricultural Development Bank (ADB) PLC is asking government to provide tax incentives, tax holidays, and rebates for institutions engaged in agricultural financing as well as reforms on guidelines in order to help expand the market for providing soft loans to the sector.
According to the Managing Director of ADB, Alhassan Yakubu-Tali, the bank has remained the first point of contact for agricultural financing despite the wide-ranging challenges in the sector that has scared many banks away from providing financial assistance.
Mr. Yakubu-Tali made these comments during a courtesy call on the Minister of Food and Agriculture, Bryan Acheampong on May 11.
He further indicated that the Bank needs some of these funds to interventions to boost its continuous financing of the sector and also offer competitive and affordable rates to farmers.
He added that this has the potential to way to return the support ADB gives to the Ministry and the agric sector. It will also encourage the bank to do more and also motivate other banks to come on board.
“There is the urgent need for all stakeholders to work with the Bank of Ghana to develop special prudential guidelines and regulations relating to asset classification, acceptable collateral etc. relating to agric financing.”
While assuring the Ministry of the bank’s commitment to grow the agricultural sector, he also called for robust research and extension systems to support improvement in agricultural productivity and the availability of reliable data to drive planning and policy direction in the industry.
“There should also be an increased budgetary allocation to provide physical and social infrastructure like feeder roads, markets, storage facilities, irrigation facilities, etc. to grow the sector,” he said.
“Most importantly, ADB which has shown unequal commitment to agricultural financing should be the bank of choice when it comes to channelling long-term concessionary funds by the Ministry,” he added.
Meanwhile, the Managing Director, Alhaji Yakubu-Tali also disclosed that the Bank’s investment in agriculture sector has grown over the years with a total agricultural loan hitting over GH¢1 billion.
According to him, this investment has come on the back of the strategy to refocus the bank on its original mandate to provide financial intermediation to the agricultural sector.
He stated that this investment, however, excludes the huge volumes of non-funded facilities such as letters of credit and guarantees granted for the purchase of agricultural inputs, machinery, equipment, and raw materials.
On his part, the Minister for Food and Agriculture, Bryan Acheampong, assured ADB of the government’s absolute collaboration to support farmers through input and credit.
This, he said would reduce the cost of venturing into agriculture and help about 2.5 million people reported to be unemployed to go into farming.
He disclosed that the Ministry is developing an aggressive plan, a four-year step-by-step roadmap that will be pursued to ensure that within the four or a maximum of five years, Ghana will be able to match its production to consumption, meet export requirements and match production to industry.
“MoFA will move all out with ADB to assure farmers that, ADB is committed to expanding Agriculture in Ghana. ADB stands tall in proving agriculture financing, and that makes it the Bank of choice.”
“MoFA is committed to strengthening the relationship between ADB to ensure farmers get what is needed to increase production,” he emphasized.
Source: myjoyinline
