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The Ministry of Finance has launched the Affordable Agricultural Financing for Resilient Rural Development (AAFORD) project, which has been funded by the International Fund for Agricultural Development (IFAD) with $69.7 million.
The project is aimed at benefiting over 540,000 smallholder farmers in six regions across the country, including Bono, Bono East, Ahafo, Northern, Savannah, and North East regions. The project will provide direct services to about 75,000 rural house-holds and indirectly to about 465,000 individuals in smallholder households.
The AAFORD project is designed to provide financing to small-scale and large-scale farmers, farmer-based organizations, as well as micro, small and medium enterprises (MSMEs) engaged in agriculture-related businesses.
The goal of the project is to support food security and improve the living standards of smallholder farmers, poor and vulnerable women, and youth in the regions.
The Minister of State at the Ministry of Finance, Dr. Mohammed Amin Adam, explained that the agricultural sector accounted for 54% of the country’s Gross Domestic Product (GDP) and contributed 40% of Ghana’s export earnings.
He further stated that around 71% of formal employment in rural areas was in the farming sector, indicating the importance of increasing agrarian incomes as a means of lowering rural poverty.
Dr. Adam noted that agribusiness had a very high multiplier effect on employment, creating over 750 jobs for every additional $1 million of output as indicated by the Ghana Economic Update, 2018. However, agricultural growth was affected by low productivity and competitiveness.
The AAFORD project aims to increase access to affordable finance in support of better market linkages, sustainable and climate change adapted agricultural intensification, skills and enterprise development in agricultural value chains.
In addition, it will support inclusive policy engagement and build on the potential of women and youth as untapped resources for family resilience.
The AAFORD’s intervention will assist smallholders and their associations in developing secured market linkages that could incentivize and stimulate those households to borrow and invest in increasing agricultural production, improving food security and nutrition and building resilience against the effects of climate change.
The project is targeted at 80% of smallholder farmers, 20% of market-oriented and large farmers, 50% of women, 50% of men, and 40% of youth between 15 and 35 years.
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