Farmers and fishermen have hailed the decision of the Agricultural Development Bank (ABD) to list on the Ghana Stock Exchange (GSE) to raise the needed funds to recapitalise the bank to enable it effectively support the agricultural sector of the economy.
At a stakeholders’ consultation with the management of the bank in Accra yesterday, the farmers urged the state-owned financial firm to go ahead with its intended Initial Public Offer (IPO) that is geared towards raising some GH¢300 million to fund growth and revamp the operations of the bank to make it competitive.
“We think this bank needs to be strengthened. We have come to a consensus that we have to support the bank to be able to achieve its aim,” said Philip Abayori, President of the National Farmers and Fishermen Award Winners Association of Ghana (NFFAWAG).
“We hope that management would do their best to ensure that all the difficulties or bottlenecks and all that needed to be done are done to make sure this IPO process goes through smoothly,” he added.
The farmers and fishermen have in the past expressed concern about their inability to access the needed funding from the bank to boost their business. But after the management of the bank explained to them that ADB had always supported agriculture and agribusiness, with at least 32% of the bank’s loan portfolio being held by the agric sector.
The challenge is raising enough money to meet their expectations.
Mr Stephen Kpordzi, Managing Director of ADB, who, with other top management staff, engaged the farmers and fishermen on the bank’s readiness to float shares on the stock market, said with the current ownership structure as a state-owned, ADB is unable to access medium- and long-term funds that exist elsewhere, for example from financial institutions like the IFC and CDC.
“They do have lines of credit for agriculture and Small and Medium Scale Enterprises. You can access between five- to 15-year lines but they will not deal with a 100% state-owned organisation. They like to deal with a private sector.”
Currently, the Bank of Ghana (BoG) owns 48% of the bank, with the rest being owned by the government.
BoG is offsetting all its shares, because it cannot be a regulator and an operator at the same time. Government also seeks to whittle down its shares in the institution.
Mr Kpordzi told the farmers and fishermen that the bank, in going forward, will commit resources to agriculture because about 60% of the Ghanaian populace are in agriculture business, advising those in the sector “to see agriculture as a serious business rather than the usual subsistence farming.
“We need to find a way by getting people to understand that with proper funding made available, we can finance agriculture and make it profitable.”
The MD urged the farmers and fishermen to buy into the intended IPO so as to give them the necessary leverage in the workings of the bank.
Contributing to the discussion, Patrick Kwame Ahiabu, Secretary of the Ghana Tomatoes Federation, said the decision by the bank to list on markets was a laudable idea, and urged all to support the move.
“This is a laudable idea. It is an opportunity some of us have been yearning for so that we can also own a part of the bank. You need to speed up the process,” he told the ADB management.
The farmers were pushing for a 20% stake in the bank, but Mr Kporzdi said this was subject to approval by the shareholders.
<<Print>>