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BoG intensifies moves to get funding for agric sector

Feb. 10, 2017, 3:15 p.m.

The Bank of Ghana(BoG) has intensified moves to encourage commercial banks in the country to cede some portion of their annual funds as credit to farmers in the Agriculture sector.

Even though the sector is seen as a major catalyst that could accelerate economic development, credit to stakeholders in the sector has dwindled over the years due to high risk associated with the agriculture.

Speaking to Citi Business News, the Governor of the Bank of Ghana, Dr. Abdul-Nashiru Issahaku stated that the central bank’s inflation targeting policy would be greatly improved if the agriculture sector is financed since food inflation is a major component in the inflation basket.

“One of the biggest mandates of the [central] bank is stabilizing prices, which means lowering inflation. We note that [that] has been the contribution of food inflation and I think it’s important that we consider support to the agric sector as very significant.

In this light the Bank of Ghana in the past has implemented policies that continue to make available more credit to the agriculture sector,” he recounted. Dr. Issahaku maintained that the sector could improve the livelihood of the huge number of farmers’ operating in the sector if adequate funding is provided.

He bemoaned the situation where most financial institutions consider the Agriculture sector as a high risk venture hence, pay less attention to it when preparing their budgets.

“For all the nice stories told about the Agriculture sector and its potential for poverty alleviation it remains the most credit neglected and unfunded sector of the economy”.

“Despite perceived risk associated with the agriculture sector due its unfavorable review, it is an area highly dear to my heart and I will welcome industry players to consider this promising sector,” he appealed.

He assured that the central bank will continue to encourage commercial banks in the country to invest in the sector.