This year’s Agribusiness and Investment Summit being championed by the Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity with support from the USAID has been held in Accra.
The Summit connects agribusinesses in the maize, soy, groundnut, cowpea, mango, cashew, shea, and other high-value export crop sectors with international and local investors, financial institutions, and transaction advisors. This will enable agribusinesses to purchase agricultural inputs and machinery to increase production and support broad-based economic growth.
The annual investment summit, on the theme “Strategic Partnerships for Sustainable Agriculture Financing” is part of the process to mobilizing financing into the targeted agricultural value chains supported under the programme.
This activity will unlock over a quarter of a billion dollars in financing for more than 81,000 enterprises in the maize, soy, groundnut, cowpea, mango, cashew, and shea value chains by 2024. The U.S. Government has also released $2.77 million under the COVID-19 Relief and Resilience Challenge Fund to support farmers and agribusinesses to mitigate the negative impacts of the pandemic and become more resilient against possible future shocks.
The event also provided the opportunity to share industry knowledge in some strategic partnership vis-a-vis government policy that can support agribusiness financing in the country.
U.S. Ambassador to Ghana, Virginia Palmer, and the representative of the Honorable Minister of Food and Agriculture, Forster Boateng, the Deputy Chief Executive Officer, Tree Crops Development Authority (TCDA) opened the Summit.
Forster Boateng, in his keynote address noted, “It is crucial to transform and modernize Ghana’s agriculture sector and position the industry to better contribute to food security, economic growth and the Ghana Beyond Aid strategy. Achieving this requires strong partnerships with the private sector, and collaboration with the United States Government – a long-time development partner.”
Speaking with the Chief of Party – USAID Feed The Future Project, Dr. Victor Antwi, he underscored the need to support agribusinesses to support food security and as well as enhance livelihoods in the country.
This is an important event to support agribusiness in the country for without agriculture most developing countries including Ghana will have a long way to go,” he stressed.
He added that “Agribusiness finance is not difficult, it is not risky, the key thing is to do it at the right time and when that is done, you won’t burn your fingers”
As part of the summit, owners of agribusinesses were introduced to transaction advisors to assist them with the development and packaging of business proposals and submitting same to financial institutions for financing considerations.
It is important to note that, these technical advisors (18 in total) and the financial institutions have undergone some training sponsored by USAID on how to assist and finance these agribusinesses. The project has also profiled over 50 agribusinesses whose data have been shared with the financial institutions.
He explained that most SMEs are unable to secure funding from the banks because they may have had some challenges with previous credit management or with documentations, adding that in credit administration, the banks look out for these things because the banks are protecting depositor’s funds.
Every bank is ready to give out loans, but will the borrower be able and ready to pay back? he asked.
He therefore advised the agribusinesses to seek the services of the transaction advisors whose services have already been paid for by the MFA.
A participant, Kwadwo Addo, was particularly happy that the MFA is assisting agribusinesses through transaction advisors to access finance. He was also hopeful that from this summit, the financial institutions will have a rethink on financing agribusinesses.
He, however, lamented that the challenge has always been the high interest rate charged by the banks on loans and some financial institution’s inability to really understand agribusiness have really frustrated loan accessibility in the past.
Today’s event extends the United States’ short and long-term commitments to Ghana’s agricultural sector and small-scale farmers. In September, the United States announced a $2.5 million initiative through the United States Agency for International Development (USAID) to ensure 100,000 smallholder farmers in Ghana receive affordable fertilizer for this planting season.
Since 2010, USAID’s Feed the Future program has provided more than $425 million to support Ghanaian farmers – especially in the north – to adopt new techniques, take advantage of new efficiencies, and access global markets.
Feed the Future
Feed the Future is the U.S. Government’s initiative to end global hunger. Led by USAID and driven by collaborative partnerships across public and private sectors, including 11 U.S. Government agencies, Feed the Future addresses the root causes of poverty and hunger. This is done by boosting inclusive agriculture-led economic growth, resilience, and nutrition in countries with great need and opportunity for improvement.
USAID
USAID is the lead U.S. government agency that works to end extreme global poverty and enable resilient, democratic societies to realize their potential. USAID’s activities and strategic partnerships support Ghana’s journey to self-reliance and advance an integrated approach to development. USAID promotes accountability, sustainable systems, and inclusive development.
Feed the Future Ghana MFA Activity
The Feed the Future Ghana Mobilizing Finance in Agriculture (MFA) Activity is a USAID-supported activity that will improve access to finance for farmers and agribusinesses in Ghana. The Activity enables transaction advisors to support agribusinesses to secure loans and investment.
MFA also assists diverse financial institutions to expand financing of farmers and agribusinesses, so that enterprises can purchase agricultural inputs (such as seeds and fertilizers), invest in processing, expand production, and scale operations. From 2020 to 2024, MFA is to help 81,493 enterprises access $261 million in finance, leading to $500 million in new sales.
MFA is also supporting Ghana’s agricultural financing system to mitigate the negative impacts of the ongoing COVID-19 pandemic on farmers and agribusinesses. As of August 2022, MFA has facilitated $146 million to approximately 10,000 agribusinesses including 62% female-led enterprises in the MFA target value chains (maize, soy, groundnut, cowpea, cashew, mango and shea as well as other high value export crops).