Absa Bank Ghana LTD and the International Finance Corporation (IFC) have announced a $50 million unfunded risk participation facility to support the cocoa sector in Ghana. The facility will enable Absa Bank Ghana LTD to extend financing to selected Licensed Buying Companies during the cocoa buying season. This partnership aims to sustain reliable market access for over 139,000 smallholder farmers whose livelihoods depend on the sector.
The facility is supported by the Private Sector Window of the Global Agriculture and Food Security Program. It will finance purchases of traceable cocoa from farmers across Ghana and support more sustainable farming practices aligned with the Paris Agreement on climate change. The partnership was announced at a ceremonial signing program held at the World Bank office in Accra on September 16.
According to Managing Director of Absa Bank Ghana LTD, Edward Nartey Botchway, the partnership with IFC will help finance Licensed Buying Companies to purchase traceable cocoa throughout the buying season. This will protect reliable market access for farmers and support the people who feed the economy. Absa Bank Ghana LTD believes in using its expertise and capital to build a cocoa value chain that is productive, sustainable, and resilient.
The partnership deepens Absa Bank Ghana LTD's support for one of Ghana's most important export sectors. It strengthens the bank's ability to finance Licensed Buying Companies that purchase cocoa from farmers and connect production to the market. By combining Absa Bank Ghana LTD's local market knowledge and financing capability with IFC's development finance expertise, the partnership will increase funding for a cocoa value chain that supports livelihoods, export earnings, and economic activity across farming communities.
The cocoa sector is a significant contributor to Ghana's economy, supporting thousands of farming households and anchoring the country's export economy. The sector faces challenges, including fluctuating global prices and climate change. The partnership between Absa Bank Ghana LTD and IFC aims to address some of these challenges by providing financing for sustainable farming practices and supporting reliable market access for farmers.
The partnership between Absa Bank Ghana LTD and IFC is expected to have a positive impact on the lives of over 139,000 smallholder farmers. By providing financing for Licensed Buying Companies, the partnership will help ensure that farmers have a reliable market for their cocoa. This will contribute to the economic stability of farming communities and support Ghana's economic growth.
The collaboration between Absa Bank Ghana LTD and IFC demonstrates the importance of partnerships in supporting sustainable development in Ghana. The partnership will not only increase funding for the cocoa sector but also support sustainable farming practices and contribute to Ghana's economic growth. Key aspects of the partnership include increasing financing for Licensed Buying Companies, supporting sustainable farming practices, and contributing to the economic stability of farming communities.
Key points
- Absa Bank Ghana LTD and IFC partner to provide $50m facility to expand financing for Licensed Buying Companies purchasing traceable cocoa from farmers across Ghana.
- The partnership aims to sustain reliable market access for over 139,000 smallholder farmers whose livelihoods depend on the cocoa sector.
- The facility will support more sustainable farming practices aligned with the Paris Agreement on climate change.
