Ghana’s Parliament has approved a US$20 million Financing Agreement between the government of Ghana and the International Fund for Agricultural Development (IFAD) to finance the Emergency Support to Rural Livelihood and Food Systems (ESRF), Ghana News Agency reported Oct. 17.
The ESRF was established as one of government’s response to the COVID-19 pandemic to protect the livelihood, incomes and resilience of target groups from the impact of the COVID-19 pandemic and from climate change.
The terms of the loan are: the total amount of US$20 million made up of a loan facility of US$10 million and Blend, or combination of private funds, of US$10 million. The interest rate on the loan is zero percent while that on Blend is 1.3 percent, Service charge on Loan is 1.31 percent whereas that on Blend is 1.33 percent. The Moratorium on Loan is 10 years whilst Blend is 5 years.
The repayment period for the loan is 40 years whereas the Blend is 20years and the Grant Element of the Loan is 50.24 percent while the Blend is 24.14 percent, with a weighted grant element of 37.19 percent.
Dr Mark Assibey-Yeboah, Chairman of the Finance Committee of Parliament, presenting the committee’s report, observed that the outbreak of the COVID-19 pandemic and its ravaging effect on global economies including Ghana had adversely impacted agriculture, particularly food security.
To mitigate the impact of COVID-19 and avert the possibility of a food security crisis, there is the need to strengthen Ghana’s food systems and ensure a more inclusive, resilient and productive rural economy, he said.
The chairman announced that Ghana wants access to emergency funding support from IFAD to finance the implementation of the ESRF.
Dr Assibey-Yeboah explained that the core of the project “to protect against hunger and build resilient livelihood” is the planned allocation of $17,636,000.
“This is to provide 37,250 beneficiaries with timely access to inputs (seeds, fertilizers, etc) to increase production, support 5,000 vulnerable beneficiaries with direct cash transfer and rations to overcome hunger and prevent nutritional gaps,” Dr. Assibey-Yeboah said.
He said the program also proposes to addresses rural marketing linkages and food security with $1.6 million to provide stimulus to agribusinesses by developing marketing linkages with 25,000 smallholders, ensuring that these smallholders had secured income and cash availability after harvest or production.
According to the chairman, a third element of the program earmark $685,000 for project management, monitoring and evaluation through the Project Coordination Unit (PCU) and Zonal Coordination Unit (ZCU).