ghananlpcommunity/ghana-gov-speeches-sentences huggingface dataset:
The digital finance services would leverage on mobile banking technologies and other digital platforms to enhance financial inclusion, while innovative insurance products would use mobile technologies to offer coverage for crop failure and adverse weather conditions.
It would also mean expanding value chain financing by promoting the use of contract farming schemes such as the warehouse receipt systems and outgrower schemes.
Future of Agricultural Financing 12.
With the recent evolving economic landscapes and changing environmental conditions, the future of agricultural financing is set to be shaped by a blend of technological advancements.
Some key trends and factors that would influence agricultural financing in the coming years include the following: a. Technological Innovations – Digital Platforms and Fintech Companies are revolutionizing business financing by providing more accessible and flexible funding options.
Therefore, d igital platforms could be leveraged to connect farmers with investors, offer microloans, and streamline the application process.
Advances in data analytics and artificial intelligence would also help lenders assess creditworthiness more accurately by analysing data from various sources—such as credit reference bureaux, weather patterns, and historical yields—AI can be deployed to provide precise risk assessments an d tailor 7 | P a g e financing solutions to individual needs.
As precision agriculture technologies become more widespread, they could also influence financing by demonstrating the potential for increased productivity and lower risks.
Farmers who adopt these technologies might have better access to capital due to their ability to produce more reliable returns.
b. Environmental and Climate Considerations – With climate change posing significant risks to agriculture, there is growing interest in financing projects that enhance climate resilience.
This includes funding for sustainable practices, such as agroforestry and water -saving technologies.
The rise of green bonds and sustainability -focused investments means that there will be more opportunities for financing projects with positive environmental impacts.
Investors are increasingly looking to support agriculture t hat aligns with sustainable and climate-friendly practices.
c. Economic and Market Dynamics – The development of advanced risk management tools, such as weather derivatives and crop insurance products, will become more integral to agricultural financing.
These tools can help farmers manage volatility in weather and commodity prices, making them more attractive to lenders.
Fluctuations in commodit y prices can affect agricultural financing.
Lenders may need to develop more sophisticated models to account for price volatility and its impact on farmers’ ability to repay loans.
Traditional 8 | P a g e financing sources, such as banks, are becoming more competitive with non - traditional sources.
Crowdfunding, peer -to-peer lending, and venture capital are gaining traction, providing diverse options for farmers seeking capital.
d. Globalization and Market Integration – The integration of global supply chains and trade agreements will also influence agricultural financing.
Access to international markets can provide new opportunities for funding but also introduces exposure to global market risks.
International investors may increasingly seek opportunities in agricultural sectors in developi ng countries which c ould lead to increased capital flows ; however, this requires careful management of cross-border financial risks and regulations.
e. Regulatory and Policy Changes – Government policies and support programmes will have to continue to play a crucial role in agricultural financing.
Subsidies, grants, and low -interest loans can provide significant support, particularly for farmers.
Changes in regulatory frameworks, particularly those related to financial inclusion, environmental standards and sustainability, could also impact financing.
Lenders and investors will need to stay informed about regulations affecting agricultural practices and financing.
In this regard, the Bank of Ghana in 2021 granted dispensation for the Credit Risk Guarantee (CRG) product of GIRSAL to be given a zero percent (0%) risk 9 | P a g e weighted for CAR computation purposes.
This means that credit exposures of the Partnering Financial Institutions (PFIs) secured by GIRSAL’s guarantee may receive a lower risk weighting in the computation of CAR, leading to a growth in lending to the agriculture and agribusinesses sectors .
I am informed that banks have taken advantage of this initiative to advance credit to the agricultural sector.
In addition, the Credit Risk Guarantee of GIRSAL has been recognised as acceptable collateral for computation of Single Obligor Limit (SOL) under Section 62(9) of Act 930, in December 2022.
This means that Partnering Financial Institutions (PFIs) can use t he Credit Risk Guarantee of GIRSAL as eligible collateral to secure loans, making these financial exposures to the agricultural sector secured.
In this regard, the Single Obligor Limit of the Partnering Financial Institutions will be extended to 25% instead of 10%.
This has further allowed the PFIs to expands their loan books on the back of lending to the agricultural sector Conclusion 13.
Distinguished Guests, a gricultural financing in Ghana is evolving with a mix of traditional and innovative approaches aimed at overcoming the sector's inherent challenges.
The future of agricultural finance will likely hinge on continued reforms, 10 | P a g e technological advancements and collaborative efforts between the government, private sector, and international partners.
These will be characterised by technological innovation, focus on sustainability, evolving economic conditions, and changing social dynamics.
Stakeholders in the agricultural sector will need to stay adaptive, leveraging new technologies and financial instruments to navigate an increasi ngly complex landscape.
Balancing risk management with sustainable practices and tapping into diverse sources of capital will therefore be key to driving growth and resilience in Ghana’s agriculture sector.
As I conclude these remarks, I would like to extend my congratulations and that of Bank of Ghana to GIRSAL ahead of its 5 th Anniversary Celebration.
As a founding shareholder, the Bank of Ghana pledges its strong support for GIRSAL’s activities in anticipation that GIRSAL would continue to drive the policy discourse on agricultural financing and develop innovative solutions to boost productivity and growth in the agricultural sector.
The Bank is confident in the operations and long-term viability of GIRSAL, and we wish you great success as you work to become the catalyst for increased agricultural lending in Ghana.
GRAND OPENING OF ROYAL GOLD GHANA LIMITED SPEECH BY DR.
ERNEST ADDISON GOVERNOR, BANK OF GHANA AUGUST 8, 2024 ACCRA Your Excellency, the Vice President of the Republic of Ghana, Alhaji Dr.
Mahamudu Bawumia, The President of the National House of Chiefs, OGYEAHOHO YAW GYEBI II, Paramount Chief of the Sefwi Anhwiaso Traditional Area, HRM Osagyefo Amoatia Ofori Panyin II, Okyenhene, Nananom, The Minister for Finance and MP for Karaga, Hon Dr.
Amin Adam, The Minister for Lands and Natural Resources and MP for Damongo, Hon Abu Jinapor, The Board and Management of Royal Gold Ghana Limited (RGGL), Chief Executive Officers (CEOs) of Government Agencies present, The President of Association of Banks and all MDs of Commercial Banks present, Members of the Press, Distinguished Ladies and Gentlemen, 1.
It is a great honour to be part of the opening of Royal Gold Ghana Limited (RGGL) refinery in Ghana.
This milestone represents a significant step in the development of Ghana’s gold-mining industry.
Generally, we all recognise the critical role that gold plays in our economy.
Gold is currently the leading export commodity with projected export earnings for 2024 estimated at close to US$10 billion.
Its value chain presents immense opportunities for job creation, increased foreign exchange earnings, and economic development.
Even though Ghana has exported minerals, in particular Gold for over a century, its full potential on the local economy has yet to be fully realized.
The exportation of raw materials without value addition results in potential loss of revenue and jobs.
Distinguished Guests, the opening of this gold refinery opens a new era to promote gold beneficiation and value addition which will contribute to economic growth, poverty reduction, and ultimately improvement in the livelihoods of Ghanaians.
These are all based on the notion that value addition to Ghana’s gold resources holds the potential to increase foreign exchange earnings, improve the balance of payments position , and in turn, provide enough buffers against external vulnerabilities and shocks to the economy.
This refinery will also play an important role in reducing gold smuggling, which has been a major challenge for the country over the years.
By providing a ready market for artisanal and small -scale miners, the gold refinery can mitigate the incentive for smuggling and help promote transparency and accountability in gold trading.
In the long run, when RGGL receives London Bullion Market Association ( LBMA) Good Delivery List accreditation, Ghana will gain additional benefits such as reduced dependence on foreign refineries.
Also, the central bank can diversify and organically grow its foreign exchange reserves, as well as accumulate more refined gold reserves to reduce dependence of external borrowing.
Last but not the least, the presence of a local gold refinery will enable the production of gold coins and other artifacts which can act as a safe-haven asset, and will broaden investment options in the financial markets and contribute to financial stability.
Distinguished Guests, today’s event will no doubt provide impetus to BoG’s successful Domestic Gold Purchase Programme (DGPP).
Under the DGPP, the Bank of Ghana has been able to accumulate sizable foreign exchange buffers, for the most part, significantly exceeding expectations under the IMF programme.
Since inception of the Domestic gold purchase programme, the Bank of Ghana has bought 65.4 tons of gold, valued at US$5.07 billion.
This year, since January , the Bank has bought 23 tons of gold valued at about US$1.8 billion.
The programme, along with other donor disbursements, puts the Bank in a favourable position to support the country’s external payments obligations as and when they fall due.
To conclude Mr.
Chairman, your Excellency, Honourable Ministers, the benefits of establishing a local gold refinery broadly aligns with Bank of Ghana’s objective to build adequate foreign reserves to stabilise the economy during adverse domestic and external shocks and help achieve its core mandate of price stability , and we are extremely pleased with the opening of the Refinery today.
Finally, let me congratulate the Board, Management , and staff of RGGL on this achievement.
Your hard work and dedication have paid off, and we look forward to impactful operations of this new refinery on the Ghanaian economy.
To the key stakeholders, including the Government of the Republic of Ghana, mining companies, and artisanal and small-scale miners, I urge you all to support this bold initiative.
Let us work together to promote the growth of our gold industry, add value to our natural resources, and b uild a prosperous future for our nation.
Congratulations to RGGL once again and I wish you success in your operations.
Thank you and May God bless our homeland Ghana.
1 9 5 7 Ministry of Finance (MoF) SME Growth and Opportunity Summit – 2024 Remarks by Dr.
Ernest Addison Governor, Bank of Ghana Kempinski Hotel, Accra July 16, 2024 Your Excellency, the President of the Republic of Ghana, Nana Addo Dankwa Akufo-Addo, Senior Vice President of the African Development Bank, The Minister of Finance, Hon.
Mohammed Amin Adam, The Minister of Trade and Industry, Hon.
Hammond, The Minister of Works and Housing, Hon.
Kojo Oppong-Nkrumah, The Minister of State at the Ministry of Finance, Hon Abena Asare, The Second Deputy Governor of the Bank of Ghana, Mrs Elsie Addo Awadzi, Honourable Deputy Ministers, Chief Executive Officers of Financial Institutions, Captains of Industry, Distinguished Guests, Ladies and Gentlemen.
A. Introduction 1.
Thank you for this opportunity to share a few thoughts on this topical issue of overcoming the challenges of SME Financing, and particularly, the Role of Regulation.
Small and medium enterprises (SME), constitutes the core economic base of most countries.
Their contribution to economic growth, employm ent generation and poverty reduction, are widely recognized in both developed and developing countries.
I am therefore encouraged that the Government of Ghana has brought stakeholders together to discuss SME growth and Opportunity.
I hope that this platform will provide the much-needed base for knowledge sharing and networking among CEOs of SMEs.
In my brief remarks today, I will first touch on recent developments in the Ghanaian economy, particularly, the shocks that have impacted the Ghanaian economy over the last four years.
I will also discuss steps Government and the Bank of Ghana have taken to mitigate the impact of these shocks on the economy, particularly on the SME sub-sector, and share some emerging signs of stabilization and recovery that is taking hold.
I will then turn my attention to other structural reforms the Bank of Ghana has implemented in recent years to support the SME sub-sector.
B. SME’s Recent Financing Challenges and Policy Responses 3.
Chairman, over the past four years, Ghana has been impacted by multiple shocks that has greatly impacted all facets of economic life including the operations of the SME sector .
The COVID-19 pandemic particularly presented both demand and supply shocks to the domestic economy.
As you would recall, some businesses collapsed, while those that survived had to endure lower sales due to mobility restrictions and additional costs to protect their staff and customers.
SMEs suffered the most during the covid pandemic crisis.
The large SMEs sector of the economy that in the past used to provide a cushion to such shocks, this time around amplified the shock as the lockdowns brought a halt to their activities as well.
Government therefore in a close coordination with other stakeholders implemented policy interventions to limit the impact of the crisis on the SMEs sector and the broader economy.
As part of the intervention measures introduce d by the Government to support the SMEs sector included an Emergency Preparedness and Response Plan of GH¢560 million (US$100 million), Alleviation to SMEs fund, nationwide electricity and water bills relief for over three months as well as National Buffer Stock Company.
To complement government’s Covid19-relief measures, the Bank of Ghana also announced a series of policy and regulatory measures to loosen financing conditions, ease liquidity pressures and keep credit flowing to support critical sectors of the economy.
• The Bank of Ghana cut the monetary policy rate by 150 basis points to 14.5 percent in March 2020 and worked with commercial banks (through moral suasion) to transmit the same measure of decline to lending rates.
• The Bank also reduced primary reserve requirements to 8 percent from 10 percent to increase liquidity in the banking system.
• The Bank of Ghana reduced the Capital Conservation Buffer (CCB) of banks by 1.5 percentage, implying an effective drop of capital adequacy requirement (CAR) from 13 to 11.5 percent.
• The provisioning requirements for the spectrum of loan categories was reduced from 10 to 5 percent, which helped to ease liquidity conditions and provided capital relief to banks.
• Urged the commercial banks to provide a 6-month moratorium on principal payments on loans due from customers in the worst-hit sectors of the economy.
• The Bank also suspended Dividend payments by Banks for the year 2020 to secure capital buffers.
• The Bank provided assurance to strengthen the capacity of the ARB Apex Bank to provide liquidity support for rural and community banks facing temporary liquidity challenges.
• It also extended the deadline for SDIs (MFIs and RCBs) to meet new capital requirements to December 2021 from the earlier deadline date of 28th February 2020.
• Similarly, loan repayments that were past due for Microfinance Institutions for up to 30 days were reclassified as “current”, as pertains to all other sectors.
• The Bank also reduced the cash reserve requirement for Rural and Community Banks (RCBs), Savings and Loans Companies (S&Ls), Finance Houses from 8 to 6 percent, and from 10 to 8 percent for microfinance companies.
In order to encourage the use of digital forms of payments, the Bank agreed with banks and mobile money operators to the elimination of transaction fees on mobile money transfers of up to GHȼ100 and revision of transaction limits upwards to further promote the use of digital solutions, such as mobile money and online transactions.
The Bank of Ghana again issued several notices to guide banks and SDIs on the utilisation of capital and liquidity releases as well as to ensure business continuity.
In this context, banks and SDIs were required to: • Activate business continuity and disaster recovery plans to ensure full time access to banking services during the period of the outbreak and restricted movements, and to review these plans on a continuous basis.
• Ensure full functionality of all electronic channels and that ATMs do not run out of cash.
• Develop Covid-19 Contingency Plans to help assess and identify the possible risk scenarios and mitigating measures to deal with the scenarios, including crisis management plan that seeks to map out specific actions to be taken based on Covid-19 case thresholds.
Distinguished Guests, these interventions from the Government and the Bank of Ghana helped Ghana to come out of the Covid stronger and the Ghanaian economy to record growth during the peak of the covid pandemic, unlike what happened in other jurisdiction.
Ladies and Gentlemen, the economic and policy environment globally changed considerably with the Russia - Ukraine crisis and the higher oil and food prices in 2022.
This was followed by the synchronous policy tightening across the globe to contain the rapid increase in inflation as well as weak external demand related to monetary policy tightening and economic slowdown in major economies.
As we are all aware, these shocks amplified pre -existing fiscal and debt vulnerabilities, resulting in rapid increase in inflation, sharp depreciation of the exchange rate which led to a balance of payment crisis.The government of Ghana therefore sought the support of the IMF to restore macroeconomic stability and implement wide-ranging structural reforms to build resilience and lay the foundation for stronger and more inclusive growth.
The government therefore committed to an IMF programme, and started implementing an ambitious fiscal consolidation and debt sustainability programme.
So far, the domestic debt exchange programme has ended, while the external debt structuring programme is almost concluded.
Only recently, the government announced the signing of MoU with the official Creditor Committee.
Apart from addressing the challenging macroeconomic environment, t he government is also committed, under the IMF programme, to addressing gaps in governance and anti -corruption frameworks to enhance accountability and integrity, while promoting inclusive growth through: i. improving the business environment; ii.
enhancing export competitiveness and integration; iii.
strengthening Ghana’s FDI attractiveness; iv.
streamlining sectoral and industrial policies; v. improving access to finance; vi.
promoting entrepreneurship while upskilling the labour force to help address skills mismatches; and vii.
advancing the digitalization agenda for financial inclusion.
On its part, the Bank of Ghana has stepped up efforts to bring inflation under control, eliminate monetary financing of budget, and rebuild foreign currency buffers.
The bank is also taking steps to implement comprehensive strategy to ensure rebuilding of capital buffers of financial institutions’ post-DDEP and establishing the Ghana Financial Stability Fund to provide additional support to the financial sector.
Distinguish guests, these measures are beginning to yield positive results.
Signs of stabilization and recovery in the Ghanaian economy are emerging.
The latest releases show that: • Real GDP Growth ended 2023 at 2.9 percent, up from the revised target of 2.3 percent, driven by the services and agriculture sectors.
Growth in 2024Q1 came in stronger than expected at 4.7%, with the industrial sector posting a growth rate of 6.8%.
• Inflation which peaked at 54.1 % in December 2022, and has decelerated faster-than-expected and reached 22.8 percent in June 2024, underpinned by strong policies, and effective liquidity sterilization efforts.
• Fiscal policy implementation has been broadly aligned with requirements under the IMF - supported program.
• Banking sector’s performance has improved as adverse spillovers from DDEP and macroeconomic challenges receded.
Banking sector remains stable, liquid, and profitable.
Significant profits were recorded in 2023, helping to correct losses from 2022.
Meanwhile, banks impacted by domestic debt restructuring have submitted capital restoration plans which are being implemented.
At the same time, Ghana Financial Sector Fund established —with an initial allocation of US$750 million, comprising US$250 million from th e World Bank and US$500 million from GoG —to provide recapitalisation support to the financial sector (banks and non-banks) is in progress.
• Gross international reserves position has improved.
At the end of April 2024, the stock of Gross International Reserves increased to US$6.59 billion representing 3.0 months of import cover, compared with US$5.91 billion (2.7 months of import cover) at end-December 2023.
• The exchange rate which recently come under some pressure , has begun to stabilise as uncertainties surrounding the progress of debt restructuring negotiations with external creditors has been eliminated and the Bank of Ghana’s Gold Purchase programme over performed.
Just last week, the country successfully went through completion of the Second Review of the IMF programme by the IMF Board.
The Board reaffirmed the generally strong program performance and clear signs of emerging economic stabilization.
However, noting substantial downside external and domestic risks, they underscored the importance of steadfast reform implementation to entrench macroeconomic stability and debt sustainability while fostering sustained growth and poverty reduction.
Sustaining macroeconomic stability requires the Bank of Ghana to continue to ensure that the BOG keeps an eye on inflation.
When inflation declines to comfortable levels and interest rates begin to decline, demand and supply for SME loans will pick up and be a key driving force supporting growth.
Let me also add that the Bank of Ghana recognizes the potential role of SMEs in Ghana and in this light has commissioned a study in collaboration with the Development Bank of Ghana and The University of Ghana Business School to better understand the constraints of the SMEs to formulate targeted policies to ensure growth.
The objective of the study is among others, to ascertain the economy’s SME credit demand needs, the supply of liquidity by these SME and how FINTECHs could be leveraged to scale up lending by the SMEs.
Last week, the University of Ghana presented preliminary findings of the research work based on over 500 SMEs surveyed, results of which has shed light on some of the burning issues of the industry.
I am positive that the current positive developments in the economy together with our survey findings, when implemented effectively together with sustained improvements in the overall macroeconomic conditions should benefit the SME sector in the long run.
In what follows, I will discuss some specific innovations that Bank of Ghana has implemented in recent years to support the SME sector.