AfDB and Ghana Sign US$ 63.81 Million Loan Agreement

04-MAR-08

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AfDB and Ghana Sign US$ 63.81 Million Loan Agreement

 

The Africa Development Bank (AfDB) Group and Ghanaian government on Tuesday in Tunis signed a loan agreement of UA 40 million, equivalent to US$ 63.81 million, to finance the Northern Rural Growth Programme (NRGP). The ADF loan is expected to cover 58.5% of the total cost of the programme which is jointly financed with International Fund for Agricultural Development (IFAD) and the Ghanaian government in order to help the country address the problem of poverty in the region by creating sustainable rural agricultural production and increase income-generating activities.

 
 

Speaking on the occasion, AfDB Vice President for Sector Operations, Zeinab El-Bakri, welcomed Ghana’s decision to reduce regional disparities in its efforts to attain the MDGs, particularly the goal of eradicating extreme poverty and hunger. The programme, Vice President Bakri said, would help community empowerment efforts and increase food production and marketing. It will also support about 372,000 rural households in their efforts to reduce poverty, through the construction of key road infrastructure and improved water management infrastructure which will increase access to agricultural land as well as support livestock development, she stressed.

 
 

The dissemination of drought resistant varieties, irrigation development as well soil and water conservation are expected to also contribute to efforts aimed at enabling beneficiaries cope the effects of climate change. The project will complement other ongoing projects and its design fully recognizes and responds to gender issues. The programme is also expected to increase access to agriculture resources for women and will help increase household incomes, she said.

 
 

She used the occasion to underscore the excellent relations between the AfDB and the government of Ghana. She assured the country of the AfDB’s continued support to programmes pursued by the Ghanaian government aimed at enhancing development in an environmentally sustainable manner. 

 
 

The Ghanaian ambassador to Tunisia, Lawrence Satuh, who signed the agreement on behalf of his country, said the funds disbursed would help provide material support to his country in its efforts to translate its development policies into concrete achievements in two vital sectors of the economy: the energy and rural development sectors. Ghana has, since 1973, received substantial financial and technical assistance from the Bank Group. The Tuesday agreement brings the institution’s support to the country’s agricultural sector to UA 177.37 million for 13 ongoing operations.

 
 

He underscored that the project regions had suffered from high levels of poverty associated with low agricultural productivity, dependence on erratic rainfall and low soil fertility, seasonal famine, systematic malnutrition, severe demographic pressure on natural resources as well as limited access to markets.

 
 

The injection of US$63.81 million to finance the programme will go a long way in addressing some of the challenges and greatly contribute to the achievement of the objectives spelt out in the country’s growth and poverty reduction strategy, he said.

 
 

Agriculture remains the dominant sector in Ghana’s economy, contributing 39% of GDP and directly employing 70% of the labour force. The sector also accounts for about 57% of the country’s foreign exchange earnings. The provision of fresh capital funds to enhance the productive capacity of the most deprived regions of the country which is mainly engaged in agriculture will result in a more equitable distribution of national wealth, the ambassador said.