The Finance Ministry has launched a $69 million initiative called the “Affordable Agricultural Financing for Resilient Rural Development (AAFORD)” project to tackle the challenge of limited access to agribusiness financing.
The primary goal of this $69 million project is to enhance agricultural productivity, incomes, and resilience among smallholder farmers, vulnerable women, and youth. This will be achieved by increasing access to affordable financial resources, supporting improved marketing connections, sustainable and climate-smart strategies, skills development, and enterprise growth within agricultural value chains.
The project will implement a targeted inclusive policy to harness the potential of women and youth as valuable but underutilized resources for family resilience. AAFORD is an initiative led by the Ministry of Finance, with funding provided by the International Fund for Agricultural Development (IFAD).
The project will adopt a value chain partnership approach, emphasizing the creation of profitable connections between agricultural producers, buyers, and partner financial institutions. It will promote business models that facilitate linkages between households and buyers (such as nucleus farmers, processors, and aggregators) to increase household incomes.
Partner financial institutions will benefit from agricultural credit guarantees, agricultural insurance initiatives, capacity building for agricultural lending, and access to concessional credit funds and incentives through the AAFORD-supported Blended Finance Facility (BFF) to lower interest rates on agricultural loans.
The AAFORD project aims to directly serve approximately 75,000 impoverished rural households and indirectly benefit around 465,000 individuals in smallholder households. In total, more than 540,000 smallholder rural individuals are expected to gain from this project. The targeted regions include Northern, Savannah, North-East, Bono, Bono East, and Ahafo.
Crops like cassava, sorghum, maize, soybeans, millet, and groundnuts are the primary focus, with the possibility of supporting vegetable value chains like tomatoes, peppers, cabbage, carrots, and eggplant based on opportunities. High-priority will also be given to import substitution crops like rice.
During the project launch in Sunyani, the capital of the Bono Region, Dr. Amin Adams, Deputy Minister of Finance, emphasized AAFORD as a government initiative to boost agricultural productivity and enhance the living standards of those involved in the value chain. He credited previous policies like “Planting for Food and Jobs,” “Planting for Exports and Development (PERD),” and the “Ghana Incentive-based Risk Sharing System for Agricultural Lending (GIRSAL)” for improving the sector and reducing poverty levels in rural areas.
The Deputy Finance Minister expressed gratitude to IFAD for its consistent support of government programs aimed at developing the agricultural sector. He highlighted IFAD’s contributions since 1980, which have led to increased agricultural productivity, rural institution development, improved marketing through offtaker linkages, better access to finance, youth skill development, and the growth of youth micro-enterprises, ultimately leading to resilient livelihoods for Ghanaians in rural areas.