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18.06.2012 Business & Finance

House Approves $9m Controversial Loan

By Daily Guide
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Parliament has approved the $9 million loan contracted by the governing National Democratic Congress (NDC) a day after it was described by some members of the legislature as a 'stinking' credit facility.

The credit facility was approved Friday morning following the assurance by Dr. Kwabena Duffuor, Minister for Finance and Economic Planning that the concerns of the lawmakers on the deal would be taken on board during the implementation of the project.

The Mills administration sought parliamentary approval for the financing agreement between the Government of Ghana and the International Fund for Agricultural Development on an amount of SDR 5,590,000, an equivalent of $9,000,000, for the Rural and Agricultural Finance Programme (RAFiP).

However, the House initially stopped the approval of the loan after some MPs argued that the Ministry of Food and Agriculture, headed by Kwesi Ahwoi, was going to use the credit facility to build the capacity of 'suit and tie-wearing bank officials' at the expense of poor farmers.

The MP for Okere, Dan Botwe had urged the House to reject the loan facility, noting that it was an insult to the integrity of Parliament to approve such a loan to build the capacity of financial institutions when farmers were facing challenges in accessing finances for their agricultural production.

He suggested that the loan should only be approved if the House was given the assurance that Agric Extension Officers, who engaged directly with farmers, would benefit from the capacity building programme.

Supporting the loan facility, Deputy Minority leader, Ambrose Dery who is also the MP for Lawra/Nandom, indicated the agric extension officers were going to be part of the programme.

The loan, he suggested, should be used for the benefit of poor farmers and build the capacity of rural banks' officials who sometimes find it difficult in disbursing credit facilities to farmers when such facilities are available.

According to Ambrose Dery, if adequately trained and motivated, Rural Bank officials would be able to reach out to poor farmers and give credit facilities directly to them for their agricultural production.

Backing the loan agreement, MP for Wa West, Joseph Yieleh Chireh, said the few rural banks in the country do not have the capacity to effectively disburse loans to farmers.

Yieleh Chireh, a former Minister of state in charge of Local Government and Rural Development as well as Health, stressed the need to strengthen the capacity of rural banks to enable them disburse credit facilities to farmers.

 By Awudu Mahama

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