President Akufo-Addo has encouraged financial institutions to lend more to people in the agricultural business.
According to the President, it could not be right that the nation aspires to grow in agriculture to feed itself and export, but farmers seldom acquire loans to work with.
The situation got the President more worried, considering that the percentage of loans to farmers in Ghana is the lowest in West Africa.
“I am very distressed and concerned about the poor credit culture and the measures that we need to take to improve it,” he stated.
The President was having a discussion over breakfast in Accra on Monday, October 16, 2023, with financial institutions and other stakeholders in the agriculture sector on financing the industry.
Prior to his address, there were two panel discussions, hosted by award-winning journalist Bernard Avle, who solicited from the panelists why banks do not lend more to farmers.
He also inquired about opportunities available to the government, especially to maximise the growth of agribusiness by leveraging the banking sector.
Sitting in and listening to the various discussions, a very soaked Akufo-Addo put aside his prepared speech to have an informal interaction with the bosses of the financial institutions who had gathered.
Referring to information he had picked up from the meeting, including the percentages of the various banks’ portfolios in the agribusiness sector, he urged them to increase them.
From his podium, he asked some banks, including the Ghana Commercial Bank, for their percentage, to which the Deputy Governor of the Central Bank responded from amongst the gathering that 25 percent goes to the sector.
The highest figure he got was 27 percent, from Opportunity International Bank, a private bank. This percentage of the bank’s portfolio goes to 22,000 farmers out of 3.5 million.
President Akufo-Addo described it as “scratching the surface” of the entire need to finance agriculture.
COURT
One of the challenges the banks face with lending to farmers is the recovery; this was identified during the panel discussion.
According to the bankers, using the court system to help recover was another herculean venture due to delays. They cited that, should a commercial dispute involving the lender and the lendee take a year or more, it would be difficult for the banks to get funds to loan the next farmer.
They advocated a swift process by the court to put the fear of God in potential borrowers, most of whom changed their contact information after getting the money from the bank.
President Akufo-Addo agreed with the bankers that there was an institutional arrangement that could definitely be ameliorated and improved in the way courts deal with interest loan cases.
He mentioned that they could set up commercial courts to try and accelerate the resolution of commercial disputes, adding that “I have no doubt that more can be done in that direction so that we can accelerate discussion.”
OPPORTUNITY
On the topic of opportunities available for the ministry of food and agriculture, it was mentioned in the panel discussion that the government could consider the rice industry.
The panel believed that investing in rice farming could contribute hugely to the economy of the country, considering the amounts of the commodity imported and the bills paid annually.
