In Ghana's northern belt, smallholder farmers will have access to low-cost loans with single-digit interest rates after the Ministry of Food and Agriculture (MoFA) established a US$1 million revolving fund.
The fund was unveiled in Accra on April 18 and is a component of a larger US$20 million grant obtained from the African Development Bank (AfDB) and the Global Agriculture and Food Security Programme (GAFSP).
It seeks to increase the Northern Savannah Ecological Zone's resilience and food production.
"The fund is being rolled out at a time when many farmers in the north are still recovering from the impact of a prolonged drought last season," stated Mr. Eric Opoku, Minister for Food and Agriculture, during the signing ceremony.
This isn't simply another pledge from the government. In contrast to the current market rates of 25 to 30 percent, qualified farmers in the 12 regions that were chosen would be able to visit their local rural banks by next week and get these loans at interest rates below 10 percent, according to Mr. Opoku.
Selected rural and community banks will distribute the money, which is being executed in collaboration with ARB Apex Bank. Women and young farmers, who comprise over 60% of the agricultural labour in northern Ghana but often encounter obstacles when trying to get finance, are anticipated to be given priority.
The first batch of funding has been released to rural banks in Walewale, Bunkpurugu, Zabzugu, Gushegu, Karaga, and Chereponi, according to MoFA Chief Director Alhaji Mohammed Hardi Tufeiru. It is anticipated that payments would start on April 25.
"Loan sharks who charge up to 50% interest have long preyed on farmers in these regions. Alhaji Tufeiru said, "This intervention keeps more earnings in their own hands and gives them a better alternative."
Mr. Alex Kwasi Awuah, managing director of ARB Apex Bank, clarified that the bank has streamlined loan application processes in order to do away with collateral restrictions, which often exclude smallholder farmers.
We are aware that many farmers lack substantial assets or land titles. According to Mr. Kwasi Awuah, "we're using a group guarantee system that allows cooperatives to vouch for their members."
In addition to finance, the initiative will provide farmers with drought-tolerant seed types, including Songotra cowpea, Jenguma soybean, Jasmine rice, and Obatanpa maize. Additionally, there will be solar-powered micro-irrigation kits for dry-season gardening along the White Volta and handheld tools like power tillers that are appropriate for stony soils in the Upper East. To alleviate protein shortages in the area, support for guinea fowl and poultry husbandry is provided.
Northern Regional Coordinating Director Alhaji Alhassan Issahaku, who attended the event on behalf of the Northern Regional Minister, said that the program directly addresses input from farmers and community leaders during the Minister's recent trips.
This resolves issues brought up by our queen mothers and chiefs when the Minister was on tour. It demonstrates that the administration is considering the north's actual needs," Alhaji Issahaku said.
The Ghana Agricultural Insurance Pool (GAIP) will provide insurance coverage to participating farmers to guard against crop failure brought on by unpredictable rainfall, which is becoming a bigger problem in the savannah zone.
Six districts will launch the program first, with the other six anticipated to follow suit by June 2025.
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