To help address the challenge of difficult access to agribusiness financing, an intervention dubbed the ‘Affordable Agricultural Financing for Resilient Rural Development (AAFORD)’ project has been rolled out.
The US$69 million project’s primary objective is to improve agricultural productivity, incomes and resilience of smallholder farmers, vulnerable women and the youth.
This is expected to be achieved by increasing access to affordable finance in support of better marketing linkages, sustainable and climate-smart strategies, skills and enterprise development in agricultural value chains.
It will incorporate a targeted inclusive policy to develop the potentials of women and youths as ‘untapped resources’ for family resilience. AAFORD is an initiative of the Ministry of Finance, with funding from the International Fund for Agricultural Development (IFAD).
The project will follow a value chain partnership approach, focusing on developing profitable linkages between agro producers, offtakers and partner financial institutions. It will support business models that target households to develop marketing linkages with offtakers (nucleus farmers, processors and aggregators) and increase their incomes.
Partner financial institutions will receive agricultural credit guarantee and agricultural insurance initiatives, agricultural lending capacity building, and access to concessional credit funds and incentives from the AAFORD-supported Blended Finance Facility (BFF) to reduce the interest rates on agricultural loans.
The AAFORD project targets providing services directly to about 75,000 poor rural households, and indirectly to about 465,000 individuals in smallholder households. In all, a total of over 540,000 smallholder rural individuals are expected to benefit from the project. The target geographical areas are the Northern, Savannah, North-East, Bono, Bono East and Ahafo Regions.
The target crops include cassava, sorghum, maize, soyabean, millet and groundnuts. Depending on the opportunities, it will also support vegetable value chains – such as tomato, pepper, cabbage, carrots and eggplant – relevant to smallholders. Import substitution crops such as rice will also be given high priority.
Launching the project in Bono Region’s capital of Sunyani, Dr. Amin Adams, Deputy Minister of Finance, described AAFORD as one of government’s efforts aimed at increasing agricultural productivity and improving the living standards of value chain actors – adding that over the years, introducing policies such as Planting for Food and Jobs, Planting for Exports and Development (PERD) and Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL) have improved the sector and livelihoods of rural folk, and also reduced poverty levels.
The Deputy Finance Minister commended IFAD for its continuous effort in supporting government’s programmes aimed at developing the agricultural sector.
“Since 1980, IFAD’s interventions have supported a range of programmes in Ghana; focusing on areas such as agricultural productivity improvement, developing rural institutions, marketing through offtaker linkages, supporting access to finance, youth skills development and youth micro-enterprises. These interventions have led to the development of resilient livelihoods for the citizenry. We are grateful for your support and collaboration over the years in bringing a smile to the face of Ghanaian rural folk,” he said.