Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, says his outfit is preparing a draft bill to be considered by cabinet to get commercial banks to lend more to the agriculture sector.
According to him, the low level of credit granted by commercial banks to players in the agric sector has become a major impediment to the transformation of the sector in the country, despite its significant contribution to national economic growth.
Speaking at the launch of the Agriculture Stakeholder Convening Platform by GIRSAL in Accra on Wednesday, the Minister said the draft legislation will be modelled in similar ones done in many Asian countries, where banks are bound to ensure that at least 20 percent of their lending is to players in the agriculture sector.
“Because of the lack of responses that we are getting from the commercial banks, I am preparing a cabinet memo for cabinet to consider legislation for agricultural credit in this country. I know from my work in India some decades ago and other Asian countries that this legislation exists where for every 100 cedis of credit given out by any commercial bank, 20 cedis in the case of India has to be in the agricultural area. So we are preparing this because if persuasion fails, then we have to legislate as a government. We see that as the biggest challenge to the march towards transforming agriculture. The banks should come on board,” he said.
Over the last few years, there has been improvements in credit to the private sector in the past few months as economic activity picks up, but the agriculture sector continues to receive one of the lowest levels of credit from banks in the country, at 3.5% as at April 2022.
This situation has been bemoaned by analysts, who are calling on the government to take urgent steps to address the situation.