Ghana has launched an expanded network of credit guarantees and blended finance programmes targeting agricultural lenders as the sector confronts one of the highest loan default rates in the economy. The interventions arrive ahead of the 41st National Farmers’ Day celebrations in Ho, where questions about whether financing schemes can reverse decades of capital shortage will dominate discussions.
Agriculture’s non-performing loan (NPL) ratio reached 62.1 percent in 2025, more than three times the national average of 19.5 percent recorded in October, according to the Bank of Ghana. The central bank reports that although the systemwide NPL rate has declined from 22.7 percent a year earlier, credit risks in agriculture remain elevated. This disconnect between the sector’s role as the backbone of employment and its marginal access to capital has prompted government to deploy guarantees, subsidies and long-tenor loans designed to shift banks’ risk appetite.
The financing challenge featured prominently in messaging around this year’s Farmers’ Day, scheduled for December 5 under the theme “Feed Ghana, Eat Ghana, Secure the Future.” Food and Agriculture Minister Eric Opoku described the agenda as a collective responsibility and said existing financing schemes must scale dramatically if Ghana is to reduce reliance on food imports and achieve self-sufficiency.
The Ghana Incentive-Based Risk-Sharing System for Agricultural Lending (GIRSAL) stands at the centre of the government’s strategy. The scheme provides guarantees covering up to 70 percent of principal on loans issued by 38 participating financial institutions, including commercial and rural banks. Guarantees run for 12 months and can be renewed for longer-term projects. Programme officials say GIRSAL has encouraged banks to re-enter value chains they previously deemed too risky. The scheme does not cover interest payments, a design feature intended to promote credit discipline and limit moral hazard.
Farmers seeking GIRSAL-backed loans must first apply through their banks. Lenders conduct project assessments and site inspections before requesting guarantee coverage. Programme managers say this sequencing keeps lending decisions market-driven rather than subsidy-led. GIRSAL recently reaffirmed its commitment to the sector by donating GH¢50,000 toward the 41st Farmers’ Day celebration. Chief Executive Officer Nicholas Afrifa said the donation would help procure 250 knapsack sprayers to reward deserving farmers during the December 5 event.
Another financing channel, the Affordable Agricultural Financing for Resilience and Development (AAFORD) project, offers approximately US$14 million in blended finance to support production, marketing and value addition. The initiative targets farmers and processors unable to meet conventional collateral requirements. People familiar with the fund say AAFORD fills a financing gap for activities banks consider too risky or small-scale, combining concessional financing and grants to strengthen resilience against climate and price shocks.
The Agricultural Development Bank continues to provide specialised agribusiness loans, often processed closer to farms through branch visits. These products remain among the few commercial options available to producers in rural areas.
The financing discussion unfolds as government rolls out large-scale production programmes under the 2026 Budget, where agriculture has been positioned as a central pillar of economic transformation. Under the Feed Ghana Programme, government distributed 2,000 metric tonnes of hybrid maize seed, 1,000 metric tonnes of rice seed and 50,000 metric tonnes of fertiliser in 2025. Planned distribution for 2026 includes 31,000 metric tonnes of rice seed, more than 164,000 metric tonnes of fertiliser and additional agrochemicals. The Ministry expects these interventions to stabilise yields and ease food inflation, one of the strongest drivers of overall consumer prices.
Major irrigation works under the Irrigation for Wealth Creation Initiative and the Afram Plains Economic Enclave are underway across thousands of hectares. Officials say year-round production is essential to reduce import dependence and support a more stable exchange rate.
One of the flagship financing interventions is the US$500 million Oil Palm Development Finance Window, announced under the National Policy on Integrated Oil Palm Development covering 2026 through 2032. The facility will provide long-tenor loans aligned with the crop’s growth cycle and includes a five-year moratorium on principal and interest payments. Officials say oil palm’s long gestation period makes commercial loans unworkable without concessional terms. Conventional bank loans, they note, are mismatched to a crop that takes up to seven years to reach full maturity.
The facility, developed with the World Bank, development finance institutions and the Development Bank Ghana, will finance up to 70 percent of project costs. Government expects the approach to attract private investment, cut Ghana’s annual US$200 million palm oil import bill and support more than 250,000 jobs across the value chain. Smallholders are expected to benefit through an outgrower scheme linking them to nucleus estates and processors, supported by subsidised seedlings, mechanisation services and guaranteed off-take agreements.
To reduce production costs, government is rolling out Farmer Service Centres across 50 agricultural districts. More than 4,000 machines, including tractors, planters, boom sprayers and combine harvesters, will be deployed to support producers. Officials say improved mechanisation should raise productivity and strengthen farmers’ credit profiles over time. An additional GH¢200 million has been released to the National Food Buffer Stock Company to buy excess produce and stabilise incomes for crop and poultry farmers facing market gluts.
President John Dramani Mahama has directed schools to purchase locally produced rice, maize, chicken and eggs, a measure designed to guarantee demand for local producers. Although most financing debates focus on crops, fisheries and aquaculture operators are seeking more targeted credit as well. Fish accounts for about 60 percent of Ghana’s annual protein intake. Officials say access to affordable financing for hatcheries, processing facilities and cold storage is critical to meeting rising domestic demand.
The central question remains whether these interventions can meaningfully close the agriculture credit gap. Guarantees, subsidies and blended finance have widened the pool of bankable farmers. Banks say GIRSAL has reduced uncertainty and made it easier to extend credit to previously risky value chains. Some institutions report modest growth in agriculture loan portfolios after years of stagnation.
But underlying risks remain substantial. High NPL ratios, weak bookkeeping, climate variability and price shocks continue to undermine loan performance. Analysts say credit schemes alone will not suffice without improvements in irrigation, storage, logistics and market access. For government, closing the credit gap is fundamental to meeting food security goals. The Farmers’ Day theme and the scale of investment outlined in the budget highlight the urgency.
Ghana’s farm financing ecosystem is expanding more quickly than at any point in the past decade. The system of guarantees, subsidies, blended finance and long-tenor loans is becoming better aligned with the risks faced by producers. Yet questions about scale, sustainability and compliance remain. Banks are slowly increasing exposure to the sector, though cautiously. Government is supplying inputs on a scale not seen in years. But for financing schemes to succeed, farmers will need stronger records, stable markets and greater resilience to climate shocks.
Whether these tools can close the longstanding credit gap will determine if Ghana’s ambition to “Feed Ghana, Eat Ghana, Secure the Future” becomes reality or remains an aspiration repeated each year.
