15 June 2012

Ghana: MPs Halt 'Gargantuan' Nine Million Loan

Members of Parliament from both sides yesterday stood their grounds and halted a $9 million loan being pursued by the government to finance agriculture in the country.

The Ministry of Food and Agriculture is seeking parliamentary approval for financing agreement between the Government of Ghana and the International Fund for Agriculture Development for an amount of SDR 5,590,000, equivalent of US$9,000,000 for the Rural and Agricultural Finance Programme (RAFiP).

The purpose of the loan, according to its seekers, the Ministry of Food and Agriculture, headed by Mr. Kwesi Ahwoi, was to build the capacity of ARB Apex Bank, rural and community banks and Rural Microfinance Institutions.

However, the MPs argued the loan facility was not in the best interest of the country, since it would not go directly to the farmers who deserve it. The loan, the MPs argued, is a "stinking credit facility," and the earlier the government stopped pursuing it the better.

Expressing their displeasure about the credit facility during its consideration stage on the floor of the House, were Dan Botwe, MP for Okere, Edward Doe Adjaho, First Deputy Speaker and MP for Avenor/Ave, Osei-Kyei Mensah-Bonsu, Minority Leader and Papa Owusu-Ankomah, MP for Sekondi.

Leading the onslaught was the MP for Okere, who urged the House to reject the loan facility. He argued that the intent of the loan facility was insulting for the House to approve it, due to the difficulties some farmers in the country had to go through in accessing finances for their agriculture production

"We are contracting a loan to build the capacity of people to wear more suits and ties, at the expense of the poor farmers, why can't the banks use their end of year profits to build their own capacities," the Okere MP fumed.

He could not fathom why the government made such a move and not contract loans to enhance the activities of the poor famer, who had to struggle day-in-and-day-out to finance his produce.

"These same rural banks are already giving loans to our illiterate farmers and petty traders with interest rates, sometimes ranging from 45 to 50%, and so why do we take loans to spend on these officials, on how to do what they are already doing," the Okere law maker quizzed.

Also commenting on the credit facility was Dominic Nitiwul, MP for Bimbilla. To him, some members had earlier spoken against contracting the said loan at the committee level and, therefore, could not understand why the government has failed to change its ways.

According to him, the move was not in the best interest of the country and advised the government to put the plight of farmers close to its heart, before considering the credit facility.

Papa Owusu-Ankomah, MP for Sekondi, who doubles as a member of the finance committee of parliament, could not also understand the need to contract loans to build on the capacities of 'suit and tie wearing' staff of financial institutions at the expense of the poor farmer.

Following the stiff opposition from the MPs, the First Deputy Speaker, Edward Doe Adjaho, who was in the seat directing the affairs of the House decided to defer the approval of the fund for the leadership of parliament to do more consultation on the facility.

He cited an example of a similar facility that was approved in 2001 by Parliament that was to be used to finance a project to determine the level of poverty in the country, questioning why the need for such a facility, when poverty level was obvious to determine.

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