- Bank unveils plan to finance entire poultry, rice value chains
- Projects GH¢2bn financing for agribusinesses by 2022
- Draw partnerships with MoFA, OVCF, GIRSAL to provide cheaper finance
COVID-19 presents Ghanaians with the best opportunity to localise the entire food production value chain in the country, become less reliant on import of basics such as rice and poultry and finally offer the best chance to sustained stability of the local currency, Dr. John Kofi Mensah, Managing Director of the Agricultural Development Bank (ADB) has said.
Speaking, in Accra, at the official launch of a GH¢500 million project to finance and localise the full value chain of poultry from day-old chick producers, to broiler production, feed millers, processors and distributors, by linking one chain to another, Dr. Mensah noted that the age old story of import substitution would be realised via this project.
“This is the time to be food sufficient and change the diet patterns of Ghanaians from consumption of foreign products to high standard local ones. Agribusiness is the key backbone of any developing economy and it is time all stakeholders take the bull by the horn and ADB is leading this charge,” he said.
Giving a breakdown of the project dubbed ‘Broiler Value Chain Financing Concept’, Dr. Mensah pointed out that the project also forms part of government’s agenda of reducing the importation of food products such as poultry into the country.
The project which identifies, links and finances players in the poultry value chain has so far been piloted in the Bono Region with six players in the value chain including input suppliers, producers, processors and market players. The six players, who are being financed by ADB, have received a total of GH¢25 million with the least receiving GH¢1 million and the highest receiving GH¢9 million.
Ghana, annually spends more than US$1billion to import food including rice, poultry, cooking oil, and several others. Poultry alone accounts for US$300million and rice accounting for some US$400million.
Partnerships for expertise and cheaper finance
Forming partnerships with the Ministry of Food and Agriculture (MoFA) for technical expertise, Dr. Mensah noted that even though agriculture is considered a high risk venture, the bank is leaving no stone unturned to make sure all players in the value chain are provided with the right financing, expertise and insurance to get the products to market.
Also, the bank is working with the Ghana Incentive Based Risk Sharing System for Agricultural Lending (GIRSAL), which is guaranteeing the loans, and the Outgrower Value Chain Fund, which is providing supports to help reduce the interest on loans for the value chain players so that the end products do not become more expensive than the imported ones.
“With these partnerships, the interest on these loans should eventually become so low it doesn’t go beyond 10 percent per annum. What this project seeks to achieve is revive the poultry industry, improve standards across the board so the end product competes favourably with imports and create serious jobs,” he said.
Job creation and sustainability
Dr. Mensah explained that by the end of the first phase of the project, which would see replication of what is happening in Bono Region in five other regions –Ashanti, Greater Accra, Eastern, Western and Central– at least 3,000 new jobs would be created and poultry farmers that produce 10,000 birds a month would be producing 50,000 birds a week.
The project, the Managing Director, added would also provide healthy and fresh proteins to Ghanaians, engender the production of maize and soya beans which are all major feed ingredients for broiler production, feed the hospitality industry when it revives after COVID-19 and help push ADB’s total loan book portfolio to GH¢4 billion by 2022.
For the rice sector, Dr. Mensah explained that the same format of linking one chain to another, financed by the same bank, advised by experts from MoFA, and the process guaranteed by OVCF and GIRSAL would be deployed. Thus, the chains of farmer, miller and distributor would be linked and monitored for success.
“The challenge with quality when it comes to local rice is simply because of timing. The rice millers are severely underfunded, which slows the whole process. When the rice is not milled on time, it loses its moisture thereby dropping the quality of the final product. But with ADB financing the growers, millers and marketers, the quality of the end product would be guaranteed.”