GAWU urges mandatory lending to agric sector

THE General Agricultural Workers Union (GAWU) of the Ghana Trades Union Congress (TUC) is advocating a national policy that will compel banks to invest a certain portion of their loan portfolios in the agricultural sector.
The Deputy General Secretary of GAWU, Mr Edward Kareweh, told the GRAPHIC BUSINESS in an interview that the sector was being marginalised in terms of policy focus, hence the need for the government to intervene through policy directions.
Should the government heed the call and implement it, Mr Kwareh believes banks that did not abide by it should have their licences revoked and forced out of the sector.
 “We are calling for a more serious reflection on the policies and development strategies of this country and the level of coherence of these policies and strategies,” he said.
The union’s comment is premised on recent data from the Ghana Statistical Services (GSS) on the contribution of the various sectors to Gross Domestic Product (GDP) for the second quarter of 2015.
Data from the GSS showed that the services sector maintained the lead in its contribution to GDP, accounting for 59.6 per cent. It was followed by the industry, which contributed 29.6 per cent to the period’s total productivity.
Agriculture, however, contributed 10.6 per cent; the lowest among the three sectors. 
The GDP measures the value of final goods and services produced in the country.
GDP for the second quarter of the year 2015 grew by 3.9 per cent (year-on-year) compared to 2.6 per cent recorded for the second quarter of the year last year.
State of agriculture
In terms of growth, agriculture grew at negative 0.1 per cent between April and June this year.
The livestock sub-sector recorded a year-on-year growth rate of 13.4 per cent, while crops and cocoa sub-sector declined by negative 5.6 per cent.
Mr Kareweh said the place of agriculture could be determined by looking at first, its overall contribution to GDP and that of other sub-sectors.
“If we take the contribution of the agric sector in relation to other sectors, it suggests that as the size of the economy increases, agric takes a smaller proportion. This means the services sector is six times bigger than agric and industry three times bigger,” he said.
According to him, the figures also suggest that there has been an abnormal development trajectory.
Under normal circumstances, he said the services sector should not be leading in growth, given that the country was home to dozens of raw materials that could have been used to industrialise the economy.
“The growth of the services sector is predicated on the growth of agric and industry and if the two sectors are not growing and the services sector is growing, then there is a misnomer. This means that the services sector is servicing imports rather than agric or industry,” he said.  
Currently, Ghana’s economy is considered an agrarian one, with much of the labour force — almost two-thirds — being in the agriculture sector.
Data further reveal that more than 70 per cent of the rural population is into agriculture.
Mr Kwareh said a decline in growth in the agricultural sector, therefore, signified that the country’s policy direction was not working.
“There is a policy failure because we are supposed to have irrigation agriculture but we continue to do rain-fed, which is erratic. That underscores our inability to fashion out measures to address the agriculture challenges,” he said. GB
writer’s email: ama.baafi@graphic.com.gh
Pull Quote
We are calling for a more serious reflection on the policies and development strategies of the country and their level of coherence.
Key Note
Experts have said government should make it mandatory for commercial banks in the country to set aside a proportion of their assets to support the growth of the agricultural sector.GAWU urges mandatory lending to agric sector