BUSAC SUCCESS STORIES

SUPPORT FOR AGRO-PROCESSING INDUSTRIES

Financial support for Ghanaian farmers is expected to improve as the Export Development and Agricultural Investment Fund (EDAIF) expands its operations to support capital investments in the agricultural sector of the economy.

The persistence advocacy by the Private Enterprise Foundation (PEF) and the amendment of ACT 582 to include the provision of financial resources for the development and promotion of agricultural related activities, present real opportunities for farmers to gain access to capital to expand their agro-businesses.

The Senior Economist of PEF, Mr. Moses Agyemang who is glad that the fund has a zero percent interest loan facility, is hopeful that this will enable more farmers and artisans to undertake agro-processing and export oriented activities.

EDAIF now supports Ghana's agro-processing sector

EDAIF now supports Ghana's agro-processing sector: Photo credit: http://www.technoserve.org/blog/photo

Mr. Moses Agyemang further explained that among other functions, the funds from the agricultural component of EDAIF are intended to finance the development and promotion of agriculture, related activities such as agro-processing, purchase of agricultural equipment as well as credit guarantees through designated financial institutions to persons in the agriculture and agro-processing sectors of the economy.

The Export Development and Investment Fund (EDIF) was established by Act 582 dated 4th October 2000 to provide financial resources for the development and promotion of the export trade in Ghana with no provision to support the agricultural sector.

Despite the fact that agriculture forms the back bone of Ghana's economy, for many years there was no fund in Ghana dedicated to supporting agriculture, which is considered by many financial institutions as one of the high risk sectors of the economy. Worst of all, there was very little awareness about the need to establish a fund to support the sector, and this led to a low investment drive in the agricultural sector. To address this challenge, the leadership of PEF sought the support of the BUSAC Fund to advocate the establishment of a national fund to support agricultural production in Ghana.

With the support of DANIDA, USAID and the EU, the BUSAC Fund responded by providing an advocacy grant that enabled the leadership of PEF to engage officials of Ghana's Ministry of Food and Agriculture on the need to establish a national fund to support agricultural production in Ghana.

Mr. Agyemang also pointed out that "as a result of the advocacy action, the government indeed made allocation for an Agricultural Fund in the 2008 budget. Unfortunately the government could not implement it before it left office."

"Upon assuming office in 2009, the new government bought the idea of creating an agricultural fund. Unfortunately, owing to financial constraints, they could not create a sole agricultural fund. However, an agriculture fund component was inculcated into the Export Development and Investment Fund (EDIF); hence it became EDAIF," he added.

By Ebenezer Kpentey

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