Parliament approves US$150 million concessional facility loan for AMSECs project


After nearly an hour of deliberations and debate on a motion on the Finance Committee’s report, Parliament has approved a US$150,000,000 concessional credit agreement between Ghana and the EXIM Bank of India for the strengthening of the Agricultural Mechanisation Service Centres (AMSECs) project.


Chairman of the Finance Committee and Member of Parliament for New Juaben South, Dr. Mark Assibey Yeboah, stated on the floor of Parliament that agriculture contributed 44.7 percent to the country’s workforce, according to a Ghana Living Standard Survey conducted in 2014.

Dr. Assibey-Yeboah informed the house that the challenges affecting the agriculture sector include declining agricultural productivity, unprofitability of farming due to high costs of operations, low access to various services along the value chain and limited marketing information.

He again added that the provision of  well-organised and commercially viable agricultural mechanisation services are inadequate due to high initial capital investment.

Dr. Assibey-Yeboah pointed out that the AMSEC initiative is to assist in providing mechanisation services to small holder farmers in each Metropitan, Municipal and District Authorities (MMDAs)  who cannot afford their own machinery due to financial and other farming constraints.

He explained further that there is the need to continue to strengthen the existing AMSECs as well as establish new AMSECs in order to increase their coverage across the country.

*The Finance Committee’s report on the loan facility agreements*

The objective of the loan is to finance the Agricultural Mechanisation Services Centres project by improving the availability and timely access to affordable agricultural equipment and mechanised services in the country.

Under the financing terms of the credit, interest rate covers 1.5 percent and the Grant Element represents 36.85 percent.

The Repayment Period is 20 years, moratorium is 5 years and maturity is 25 years.

In the committee’s report, the Agriculture Minister informed the committee that most of the machinery and equipment at the AMSECs are tractors and through the credit facility, the government will extend the mechanisation to all parts of the agriculture chain including ploughing, planting, fertilizer application and harvesting.

The committee’s report revealed that as a result of high demand for machinery in certain areas of the  country, some of the machinery had been over-used, thereby leading to their breakdown.

Per the report, the government would sell the machinery to the AMSECs at concessionary rates. There would also be a financial arrangement for centres buying large number of machinery.

The machinery  will be given at concessionary rates in order to reduce rent charges and also to ensure that farmers can procure the centre’s services whilst the centres stay competitive.

On procurement of machinery, the Agriculture Minister informed the committee that the machinery would be procured from India and that, the ministry has developed specifications for the various items.

Source: GhanaJustice/S.Ayisi


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