The agriculture sector, which is the leading employer in the country, is still very far from the stage where it can attract needed funding from the private sector, Alhassan Andani, Managing Director of Stanbic Bank, has said.
According to him, banks and financial service providers are cautious of lending to the sector because the country has yet to come up with a clear plan for sustainable development and transformation of the agriculture value chain.
“From where we stand,” he said, “we are very, very far away from where agribusiness can attract the most important resource that every sector needs, which is money.”
Mr. Andani said this at a breakfast meeting organised by Stanbic Bank and Graphic Communications Group in Accra.
“We have to collaborate to create the enabling environment that enables farmers, agribusiness people to access the most important resource—money—in a very competitive manner. So, we have to have a national level organisation that makes agribusiness something that people will look up to.
We have to have, within the national economy, an agri-sector organisation that makes agribusiness very attractive, and we must have – at the farmer or business unit level – an organisation that makes the deployment of capital into these units profitable,” he added.
Currently, the sector – which contributed 11.5 percent to GDP in the second quarter of the year – is confronted with several challenges, notable among which is lack of financing.
The Bank of Ghana’s Annual Percentage and Interest Rate report shows that the average lending rate for the sector is at 31 percent, with some banks refusing to even lend to the sector.
However, Mr. Andani who was speaking under the theme ‘Securing the Economy with Agriculture’, described the sector as the first line of national security and defence, hence the need for closer collaboration among all stakeholders to overcome the various hurdles that confront the sector.
“There are banks around the world that finance agriculture, and Stanbic Bank has financed agriculture in economies where the country knows where they are going with the sector; but we are very far away from this.
“It is our intent to support the sector; that is why we are part of this platform, so that we can come to a national consensus with regard to what we are doing with the sector. We can come to an industry consensus on how we can work together in an integrated manner to make it a good business, and how the individual farmers can organise themselves to attract the most important resource, which is money.”
Dr. Yabuku Alhassan, a former Deputy Minister of Agriculture and one of the discussants, agreed that closer collaboration among various ministries and other government agencies is key to solving some of the sector’s challenges.
“The Ministry of Agriculture is only a coordinating agency and does not have all the capacity to deal with everything that is impacting on agriculture. For instance, if you are talking about roads, the ministry doesn’t have the mandate to construct roads; so, it must work with Ministry of Roads in identifying priority roads that can support the sector.
“Likewise, the Ministry of Health should also work with the Agric Ministry to identify what crops can impact on the people’s nutrition. This is how we must work, and I believe that as we institutionalise and move forward this will become the case,” he said.