Parliament approves $52m IFAD loan for rural development

The Ghanaian parliament has granted approval for a $52 million loan pact between the government of Ghana and the International Fund for Agricultural Development (IFAD).

This funding will be allocated to support the execution of the Promoting Rural Opportunities, Sustainable Profits, and Environmental Resilience (PROSPER) initiative.

The financial arrangement involves a combination of funds, comprising $35 million as a regular loan component and an additional $17 million as a concessional loan portion.

The primary goal of this project is to enhance the integration, climate durability, and eco-friendliness of small-scale farmers and enterprises operating within the key value chains located in the Northern and Middle Ecological belts.

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The project’s key strategy is to capitalize on the heightened demand created by the national agro-processing strategy, which seeks to amplify value addition in the agricultural sector and boost its contribution to the country’s overall economy.

Patrick Boamah, Vice Chairman of the Finance Committee, provided an overview of the loan agreement’s terms and conditions. The repayment period for the loan extends over two decades, allowing the government ample time to settle the borrowed sum.

Furthermore, the loan incorporates a grace period of five years, during which no repayment obligations exist.

The agreement outlines a service charge of 1.48 percent per annum, which constitutes the administrative fee paid to IFAD for managing the loan. Additionally, an annual interest rate of 1.36 percent will be levied on the remaining loan balance.

The project is poised to make a considerable impact on the agricultural sector within the specified regions, bolstering the resilience and profitability of small-scale farmers and enterprises, all while promoting sustainable methodologies and the preservation of the environment.

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