President of the Chartered Institute of Bankers (CIB) Clifford Duke Mettle has called on the central bank to initiate schemes that will motivate commercial banks to help the agricultural sector boom.

The agricultural sector is projected to record its least growth rate ever -- of 0.04 percent -- this year as against a target of 3.6 percent. Mr. Mettle, speaking at the annual dinner of the CIB dubbed ‘Governor’s Day’, described this as worrying for a middle-income economy that is supposed to have the agriculture sector as its backbone for development: hence his call for the central bank to intervene.

“The Bank of Ghana (BoG) can help by introducing a concessionary tax regime for banks that maintain agreed quotas to help this sector. In doing so, the central bank can create a credit guarantee scheme that cushions banks which extend and expand credit needs to this sector.

“A similar thing to this is happening in Nigeria, where the central bank guarantees for banks who have deposited money and want to push it to these sectors (manufacturing and agriculture). This reduces exposure to the risk of losing money, and as a result banks are more inclined to support these sectors,” Mr. Mettle said.

He further emphasised the need for commercial banks to develop incentives and innovative products that will focus on developing the sector and making it attractive for people.

To achieve this, he said: “Banks will collaborate with insurance companies, which will ensure development and expansion of the agricultural insurance sub-sector as a way of militating against natural disasters and eventually encouraging banks to lend to the sector.

“We reckon that measures such as these will transform Agriculture and Industry to become sustainable means of unlocking Ghana’s food security and promoting exports to reduce pressure on the local currency,” he said.

Mr. Mettle further bemoaned the proliferation and unprofessional operations of some microfinance institutions and non-bank financial companies, adding that the professional body has devised courses and programmes to address this situation.

“We have therefore started specific and targetted courses and programmes aimed at addressing these capacity gaps. Indeed, we have initiated a project aimed at constituting a Non-Bank Financial Institution College within the Institute to handle training for this sector of the financial spectrum. We will discuss details with the central bank and all stakeholders in due course.”

The head of the central bank, Dr. Henry Kofi Wampah, in his address lauded CIB’s initiative taken to help tackle some of the challenges facing the financial sector and economy as a whole -- adding that the BoG is ready to collaborate with CIB to address the issue of unprofessional conduct and operational deficiencies of some microfinance institutions.

The Governor gave insights on some key polices that will be instituted to arrest the cedi’s continuous depreciation, which has blighted prospects in the financial sector this year.

“Modalities are being put in place to surrender portions of the export receipts from cocoa and gold directly to the market in order to improve liquidity and depth in the foreign exchange market. Notwithstanding this, the Bank will continue to be an active participant in the foreign exchange market to smoothen vitalities.

“The Bank of Ghana will come out with guidelines to ensure that all export proceeds are repatriated into the banking system in accordance with the foreign exchange act,” Dr. Wampah said.