The Ministry of Finance and Economic Planning has launched a new project to provide financial assistance to smallholder farmers across six regions of the country. The International Fund for Agricultural Development (IFAD) is funding the Affordable Agricultural Financing for Resilient Rural Development (AAFORD) project.
The project aims to directly benefit about 75,000 poor rural households and indirectly support around 465,000 individuals in smallholder households. It will improve food security and living standards for smallholder farmers, vulnerable women, and youth in the beneficiary regions - Bono, Bono East, Ahafo, Northern, Savannah and North East.
Dr. Mohammed Amin Adam, Minister of State at the Ministry of Finance and Economic Planning, launched the project. He highlighted the importance of agriculture to Ghana's economy and livelihoods. Agriculture accounts for 40% of Ghana's export earnings and provides over 90% of the country's food needs. The sector also supplies raw materials to the manufacturing industry.
According to the World Bank's Ghana Economic Update 2020, around 71% of formal employment in rural areas is in farming, showing the importance of boosting agrarian incomes to reduce rural poverty. The 2018 Ghana Economic Update found that agribusiness creates over 750 jobs for every additional $1 million of output, indicating its high multiplier effect on employment.
However, Dr. Adam noted that agricultural growth is affected by low productivity and competitiveness. Rain-fed agriculture is practiced on 96% of farmland while formal irrigation covers just 0.4% of agricultural land.
The government has introduced several policies to boost the agriculture sector and rural livelihoods. These include the National Development Policy Framework 2018-2021, the Planting for Food and Jobs program, the Planting for Exports and Rural Development initiative, the Ghana Commodities Exchange, and the Ghana Incentive-based Risk Sharing System for Agricultural Lending.
The AAFORD project aims to improve the productivity, income and resilience of smallholder farmers, vulnerable women, and youth. This will be achieved through increased access to affordable finance, better market linkages, climate-smart agricultural intensification, skills development, and leveraging the potential of women and youth.
Dr. Adam expressed Ghana's appreciation to IFAD for supporting programs to develop the agriculture sector. Since 1980, IFAD interventions have focused on areas like productivity improvement, rural institutions, off-taker linkages, finance access, youth skills development and micro-enterprises - leading to resilient livelihoods for Ghanaians.
Lakshmi Moola, IFAD's Country Director, said implementing AAFORD will greatly assist Ghana in achieving the objectives of the second phase of the Planting for Food and Jobs program recently launched by President Akufo-Addo. She called for support to ensure the project's successful implementation and desired outcomes.
Godwin Anku, AAFORD's Project Coordinator, noted that the project will further enhance the capacity of target groups to access affordable financing. This will lead to increases in smallholder farmers' marketable surpluses, household welfare and more business for financial institutions.
In summary, the AAFORD project aims to provide much needed financial assistance to smallholder farmers across several regions of Ghana. With IFAD's support, the project has the potential to significantly improve the productivity, incomes and resilience of beneficiary farmers - especially vulnerable women and youth. Ultimately, this could help boost agricultural growth and rural livelihoods in Ghana.
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