AfDB approves €100m credit facility to boost agric commercialization

Ghana is set to benefit from part of a €100 million partial credit guarantee facility that was recently approved by the Board of Directors of the African Development Bank (AfDB) to enhance commercial agriculture within the African continent.

The credit facility is expected to be invested in modern machinery that will increase significantly in yields and consequently total output. The investments are expected to target agricultural assets that will support production along multiple value chains including those for wheat, maize, barley, sorghum, livestock and dairy.

Others include a number of diverse fruits, vegetables and nuts that have commercial prospects in terms of revenues. This would not only ensure food security, but also enhance Africa’s competitiveness in the large scale production of such commodities.

The project falls in line with the Bank’s strategic priority of Agricultural Transformation which is expected to contribute to the expansion of access to agricultural finance and aims to increase food productivity, import substitution, value addition and the promotion of food security.

According to the Bank, the facility comes with the potential for strong social and economic development impact including the generation of jobs for the youth which will in turn assist to disseminate commercial-scale agribusiness and farm operational capacity across Africa with high complementarity with small-scale farmers through technical, managerial and financial skills transfer.

Commercialization of agriculture involves the production of agricultural crops in large quantity for sale rather than for family or domestic consumption.

There have been steps taken by Ghana’s government in the same direction to commit adequate financing to the sector to improve yields and output. Recently, it has initiated moves to import a number of modern farming equipment such as tractors from China in its efforts to commercialize the sector.

Ghana’s farming system basically depends on the weather for its survival and the nature of agriculture in the country is largely on smallholder traditional basis. This largely accounts for Ghana’s inability to produce enough to feed the nation in the midst of a rising population.