Access Bank Ghana Plc and the International Finance Corporation (IFC) have signed an MoU to support cocoa and commodity trade financing in Ghana.
Under the agreement, there will be an expansion of affordable financing for Licensed Buying Companies (LBCs) and an improvement in the resilience productivity, and sustainability of Ghana’s cocoa sector.
It will also ensure an improvement in LBC liquidity, enhance traceability systems, and enable the procurement of more sustainably produced cocoa beans, while simultaneously benefiting thousands of smallholder farmers.
The Agreement will also seek to strengthen supply chain transparency, and support improved environmental and social standards across the industry.
This partnership will see the IFC, through its own resources and the Global Agriculture and Food Security Program (GAFSP), provide up to $67 million in unfunded risk-participation facilities, thereby enabling Access Bank Ghana to extend up to $134 million in financing to seven leading LBCs.
At the signing ceremony in Accra on Friday, Managing Director of Access Bank Ghana, Pearl Nkrumah, said, “Access Bank’s support to LBCs will unlock the liquidity they need during the purchasing season, help improve traceability, and encourage more sustainable sourcing practices that will position Ghana’s cocoa sector for long-term competitiveness.”
She stated further that, This partnership with IFC is deliberate and designed to scale financing responsibly and ensuring timely payment to farmers while strengthening liquidity across the cocoa ecosystem.”
She noted that beyond financing, this a partnership will deliver a broader economic and social impact to players across the entire cocoa value chain and entire communities.
Natalie Kouassi Akon, the IFC Division Director for West Africa, Gulf of Guinea, noted that the signing of the agreement is “a signal of the future that we want to build.”
She acknowledged that there is a yawning unemployment gap among the youthful population in the sub-region, a gap which will not be filled if concerted effort is not made to transform the productive sectors of the region’s economies to absorb this group, the gap will remain.
This she said, is why agriculture and its value chains, like cocoa, matter far beyond farming, as a properly financed cocoa sector that is sustainably managed will create the needed jobs and strengthen local enterprise.
In spite of the pivotal road of the cocoa sector I sustaining the national economy and rural livelihoods, she lamented the the many constraints that continue to bedevil the essential crop, particularly access to finance and reliable financing.
Akon noted that LBCs play an important role, yet without capital, the entire cocoa value chain is weakened.
In view of this, she stated that “our partnership with Access Bank will enable them to scale lending responsibly, by ensuring that capital flows where it matters the most. To businesses that connect smallholder farmers to markets.”
The Second Deputy Governor of the Bank of Ghana, Matilda Asante-Asiedu, who witnessed the signing ceremony, stated that the risk-sharing guarantee scheme between the IFC and Access Bank represent a very strategic partnership to help unlock and open opportunities for Ghana’s agricultural sector.
She said, “this scheme is not only designed to harness the opportunities in the cocoa value chain, but also something that aligns very closely with our national priorities.”
She noted the scheme is strategically designed to provide the working capital for Licensed Buying Companies, whom she described as “the backbone of Ghana’s domestic cocoa purchasing system.”
The Deputy Governor said, ensuring the liquidity of these entities is not merely a commercial objective, but a national priority that does not only safeguard rural livelihoods, but strengthens the national currency and ensures the resilience of the exchange rate.
She commended the IFC for their dedication to the long term economic fortunes of Ghana.
Asante-Asiedu was ebullient about the steady improvement in the macroeconomic conditions in the country, and expressed her optimism that this ill provide the foundation for banks operating in the country to “recalibrate their business mode, and expand financing to the real and productive sectors of the economy, particularly agriculture, which is the major employer in our country.”
