African Regional Programme Leader of Food and Agricultural Organisation (FAO), Dr Ade Freeman, has said about $40 million is needed to fill the financial gap in the agricultural sector.
He said there was a deficit in the sector and until that amount was amassed the sector would continue to lag behind.
Dr Freeman said this at a stakeholders’ engagement on agriculture financing under the Ghana Agriculture Investment Plan (GhAIP).
The stakeholders’ engagement was organised by the FAO, a UN agency, in collaboration with the Ministry of Food and Agriculture (MOFA) and it is expected to come up with a policy document to guide the sector.
He said government as well as development partners were not in the position to provide the stated an amount.
The Programme Leader said there is the need for donors, the Agricultural Development Bank to invest in the area and figure out how to leverage financing resources to power the sector.
Dr Freeman called on the banks, insurance groups, partners, the World Bank to help invest in agriculture and focus on ways to address the financial gap.
Participants at the engagement were brought together to help come up with innovative ways of addressing the financial gap in the agricultural sector, he said.
The engagement is also expected to find out how links would be facilitated to drive the sector, trade and growth, Dr Freeman said.
This, he said, would ensure that all stakeholders are part of the solution to create more employment, reduce poverty and address hunger among others.
There was also a panel discussion to find out how agriculture can be financed, expected enablers or reforms needed to harness the full inherent and opportunities in the sector.
Panel members included Mr Kwesi Korboe, who represented both MOFA and the Central Bank (BoG), Ms Barbara Ghansah of AgDevCo, Mr Tabi Karikari-AfDB, Mr George Kweku Asiamah-Fidelity Bank and Mr Andrew Ahianku of Barclays Bank.
They called on the authority to educate financial institutions on agriculture since they did not understand the sector and lent money to farmers like they do with commercial interests.
The panellists also appealed for a bank risk mitigation tool, adding that farmers did not have collateral for loans apart from the lands.
Farmers should be structured so as to reduce transaction costs in accessing agricultural credit, the panel said.
There is also the need to support banks to set up agriculture desks and practicalize the implementation of financing to the agriculture sector though GhAIP.
Infrastructure such as irrigation, good road networks and stable power would also be relevant if agriculture, the backbone of the country succeeds, they said.