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Afriyie Akoto tells government  – Increase investment in smallholder farmers

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The immediate-past Minister of Food and Agriculture, Dr. Owusu Afriyie Akoto, has urged the Government of Ghana and its development partners to increase investment in smallholder farmers since they are the driving force behind the sustainability of the country’s food security and nutrition.

According to him, increased investment in smallholder farmers would further boost food production where there would be enough to feed families across the country and export the surplus to earn foreign exchange.

In the view of the Cambridge University scholar, the rising population of the African youth should serve as a wake-up call to successive governments in the African continent, especially, Ghana, to prioritize increased investments in smallholder farmers that accounts for 90% of the country’s agricultural output.

Addressing the public as the Distinguished Guest Speaker at the launch of the 70th anniversary celebration of the Faculty of Agriculture, Kwame Nkrumah University of Science and Technology (KNUST), the former two-term Member of Parliament (MP) for Kwadaso Constituency noted that rising global tensions over the Russia-Ukraine war and the recent Israeli-Gaza conflict threaten Ghana and the continent’s food security outlook.

He said we can only look within for food sufficiency in medium to long-term.

The solution to this seemingly threat, he noted, is to look within for food sufficiency in medium to long term, emphasizing the opportunities smallholder farmers would bring to the country with increased investments in them.

“The more the threats of the looming global crises unfold, it becomes increasingly clear that Ghana’s political independence, economic transformation and the survival of its youthful population would depend on robust economy that has agriculture as an unconditional priority”, he noted.

He added “It is encouraging to note that an increasing youthful population yields higher levels of consumption which must directly convert to advantages that boost local food production and Ghana’s economy as a whole. To this end it is imperative to support smallholder farmers who continue to produce some 90% of our national food requirements”.

On June 28, 2023, the Word Economic Forum reported that in regions of the world with a young population and a high number of commodity-dependent countries, such as in Africa, investment in small and medium-sized agribusinesses (agri-SMEs) with processing capacity creates much-needed economic opportunity, reducing migration and building prosperity for future generations. In Africa alone, SME’s provide an estimated 80% of jobs across the continent, thereby, powering growth.

Smallholder farmers make up an incredibly important piece of the global food system — the Food and Agriculture Organization of the United Nations estimates that around 35% of the world’s food comes from farms with less than 5 hectares in size.

However, these farmers receive only 0.3% of global climate funding, and they’re consistently the ones hit hardest by climate shocks such as floods and droughts.

The FAO estimates that “Increasing investment in smallholder farmers is essential to realizing the future we want”.

According to Dr. Akoto, the Ghanaian smallholder farmer is a potential resource waiting to be tapped into, believing that more investments in their farming activities hold the key to Ghana’s agricultural transformation drive.

Highlighting some of the successes he made when he was in the helm of affairs as the Minister for Food and Agriculture, Dr. Akoto said the right investments he made in improved seeds and fertilizer to support smallholder farmers led to record annual growths in the agricultural sector in Ghana.

“In the period 2017 to 2021, the Government invested Gh₵2.6 billion in subsidy to procure and distribute 1.4 million MT of fertilizer and 93,192 MT of improved seeds to over 1.7 million farmers. The number of extension officers was doubled from 1,450 to more than 3,000 to strengthen the link between science and the farmers. The Government of Canada made a strategic contribution by donating 300 pick-up vehicles and 3,000 motorcycles to promote extension services to farmers.

These investments in 2017-2021 generated farm output worth Gh₵47.5 billion at the farm gate. This represents a huge economic rate of return on public expenditure of GH₵2.6 billion under the Planting for Food and Jobs Programme”, he explained.

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Cross border interoperability: Governor calls for effective collaboration between regulators, financial institutions, others

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The Governor of the Bank of Ghana, has called for effective collaboration between regulators, financial institutions, mobile money operators, FinTech innovators, and other stakeholders in Africa, saying, it is crucial to address technical challenges, ensure regulatory compliance, build trust, and drive the scalability and sustainability of cross-border mobile money and other interoperability initiatives.

According to him, by fostering a collaborative ecosystem, Africa can harness its FinTech advancements to unleash the full potential of interoperable mobile money systems, benefiting both individuals and countries across the continent.

Giving remarks at the Africa Prosperity Network 2024 Symposium on Retail Payment Interoperability, he said the need for a robust framework that enables seamless cross-border payment in Africa has remained central to most recent policy, development, and financial inclusion discussions.

This, he added underscores the enormous constraint faced on the continent and the quest for concrete actions to promote cross-border payment systems to achieve our shared aspirations

“We are living in a time where most African’s first interaction with the financial sector may be through their smartphones. We are also living in a time where Africa’s cross-border payments are costly, where sending $100 could end up being only $40 received in some of the most expensive corridors. You would agree with me that these two scenarios present an optimal opportunity for scaling up cross-border transactions on the continent. The good news however is that our financial future is filled with possibilities, and at the forefront of these advancements lies the interoperability of our payment systems”, the Governor continued.

He stressed that the concept of interoperable mobile money systems holds enormous potential for the establishment of comprehensive cross-border payment interoperability in the short-medium term.

As such, an efficient cross-border payment interoperability system can deliver seamless payments between buyers and sellers across African countries, as well as provide extensive inclusivity in expanding access to payment and financial services for the youth, vulnerable groups, and striving entrepreneurs.

‘This notwithstanding, achieving cross-border interoperable mobile money systems would require harmonised regulatory frameworks, consistent technical standards, and robust infrastructure. In addition, strong public-private partnerships, involving mobile network operators, financial institutions, FinTechs, and regulators would address technical challenges and ensure regulatory compliance”, the Governor intimated.

Other strategies that would ensure the adoption and long-term system reliability of cross-border payment interoperability, he said, include customer education and trust, scalability, and system sustainability, as well as inclusive access, which is essential for all segments of society, including rural and underserved populations.

He concluded on a positive note, saying, the foundational elements necessary to implement this idea of cross-border payment interoperability are partly in place in some African countries. These include regulatory sandbox programmes, progressive regulatory frameworks, and a dynamic FinTech sector, eager for growth opportunities. However, what may be lacking is collaboration among stakeholders

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Bank of Ghana clarifies role of FinTechs in remittance space

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The Bank of Ghana has clarified the role of FinTechs in the remittance space.

In an explainer on the remittance framework shared on the Bank’s social media handle, the Bank emphasized that the local FinTech companies authorised by the central bank do not mobilize FX from abroad.

Rather, it is the Money Transfer Organization based abroad that receive remittances from abroad.

The mobilized funds are then paid into the nostro account of the local partner banks with the FinTechs involved in the downstream payment to beneficiaries.

However, recent comments by some market watchers had wrongly blamed FinTechs for withholding FX abroad.

This erroneous impression is corrected by the BOG in the explainer. The confusion seems to stem from the mixing up of the role of MTOs and FinTechs. Watch the explainer.

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IEA advocates for extended term for BoG Governor to ensure continuity

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In a bold move aimed at bolstering Ghana’s economic stability, the Institute of Economic Affairs (IEA) is making a strong case for crucial amendments to the Bank of Ghana Act 2016.

Central to their proposal is the extension of the Governor’s tenure, ensuring continuity and independence from presidential terms.

Speaking at a Stakeholders’ Forum themed “Reviewing the Bank of Ghana’s Act to Promote Transparency, Accountability, and Effectiveness,” Senior Scholar Prof. Alexander Bilson Darku from the IEA emphasised the critical importance of safeguarding the Central Bank from governmental influence over the Governor’s terms and conditions.

He asserted that maintaining this autonomy is essential for upholding the effectiveness and independence of the regulatory institution.

“We began by examining the composition of the Bank of Ghana’s board, the governor’s appointment process, and the regulatory framework governing government lending limits,” he said.

“There was a consensus on the necessity for Ghana to carefully consider aligning the term of the Bank of Ghana Governor to overlap that the of President to ensure continuity and effectiveness in governance,” he added

Prof. Alexander Bilson Darku further explained that: “substantial discussion focused on enhancing the independence of the Bank of Ghana and its ability to effectively promote price stability, exchange rate stability, and economic development through sound policy measures”.

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