Lending institution GIRSAL plans to allocate 2 billion Ghanaian cedis in loan capital over the course of 5 years.
Fresh Take:
Ghana's Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) is diving headfirst into the agricultural sector, promising a whopping GH¢2 billion investment by 2027. Here's the skinny on what that means.
According to the chiefs at GIRSAL, they're backing domestic banks and financial institutions by taking a good chunk of the risk on agricultural loans they dish out. And who are the beneficiaries of these loans? None other than our hardworking agribusinesses!
Since 2019, GIRSAL has already guaranteed loans worth a cool GH¢600 million, helping out 87 Ghanaian agribusinesses. Sounds like some serious backing, right?
The ultimate goal? To pump a staggering GH¢2 billion into the ag sector by 2027, creating a ripple effect that'll boost agricultural value chains, food import substitution, and exports!
Already, 22 financial institutions have got on board the GIRSAL train, with 19 being commercial banks. In the coming months, GIRSAL plans to prioritize selected agricultural value chains to make sure food insecurity becomes a thing of the past for Ghana.
Agriculture Minister Dr. Owusu Afriyie Akoto puts it this way: agriculture credit is vital for ensuring food security and GIRSAL, when it comes to ag finance, is a game-changer. It essentially acts as an insurance policy for loans, covering up to 70% of the default risk, encouraging banks to lend more and more agribusinesses to reap the benefits.
Finance Minister Ken Ofori Atta sees this initiative as a no-brainer, given the current state of global food value chains. It's a 'do or die' situation for Ghana, and GIRSAL is the key to boosting agricultural productivity, foreign exchange inflows, and export earnings.
To ensure everyone's on the same page, GIRSAL has launched a Stakeholder Convening and Advocacy Platform, bringing together government institutions and private sector participants. The goal? To discuss, debate, and solve the kinks in agriculture finance and the agribusiness space.
GIRSAL's mission? To stimulate investment in the agricultural sector by de-risking agricultural financing for banks. And with plans like a massive sesame seed production project, you can bet Ghana is ready to become a major player in the global ag market! Hold onto your hats, folks, this ride's just getting started!
Insights:GIRSAL's main focus is on developing high-potential agricultural value chains, such as sesame seeds and chili, to bolster Ghana’s export capacity and generate foreign exchange earnings. One of its key projects is a sesame seed pilot initiative based in Keyeme-Ziope in the Volta Region, which aims to ramp up commercial sesame production for export. The project will ultimately scale up sesame seed production for potentially massive export revenue of about $500 million annually. This is a strategic effort by Ghana to diversify agricultural exports and increase foreign exchange earnings through incentivized financing and scalable agribusiness models. (Enrichment Data)
- The Finance Minister, Ken Ofori Atta, views GIRSAL's agricultural financing initiative as essential for boosting agricultural productivity, foreign exchange inflows, and export earnings, particularly in the current state of global food value chains.
- GIRSAL's mission is to stimulate investment in the agricultural sector by de-risking agricultural financing for banks, with a specific focus on developing high-potential agricultural value chains such as sesame seeds and chili to bolster Ghana's export capacity and generate foreign exchange earnings.
- To achieve its mission, GIRSAL has launched a strategic project, a sesame seed pilot initiative based in Keyeme-Ziope in the Volta Region, with the aim of scaling up commercial sesame production for export, potentially generating about $500 million in annual export revenue, thus contributing to Ghana's efforts to diversify agricultural exports and increase foreign exchange earnings.
