Ghana’s persistent shortage of bank credit to agriculture may have less to do with farmers’ inability to repay loans and more to do with the infrastructure gaps that make agricultural investments risky and difficult to finance.
This is the view advanced by Sitsofe Mensah, a policy analyst at IMANI Africa, who believes the country must rethink its approach to agricultural financing by addressing the structural challenges that undermine the sector’s ability to attract commercial credit.
In his analysis centered on agriculture financing ahead of the 2027 Budget presentation, Sitsofe Mensah argues that banks are not necessarily refusing to finance agriculture simply because farmers default.
He believes that rather, inadequate physical and digital infrastructure is contributing to the very risks that eventually make agricultural loans go bad.
A Sector That Contributes More but Receives Less
According to data presented in Mensah’s analysis, based on Bank of Ghana records, illustrates a glaring imbalance. Over the past 25 years, agriculture’s share of commercial bank credit has averaged just 5.7%, despite its significant contribution to the economy.
For instance, at the end of 2025, agriculture accounted for 22.8% of Ghana’s GDP and employed about a third of the workforce, but received only 4.3% of commercial bank loans.
The situation worsened in August 2026, when agriculture’s share of total bank credit reportedly fell to 3.1%, even as commercial banks extended nearly GH¢33 billion in additional credit to the economy.
In the analyst’s view, this suggests that improving macroeconomic conditions alone cannot guarantee that affordable credit will reach productive sectors.
Infrastructure Gaps Make Agricultural Lending Risky
The central problem, he argues, is the difference between financing businesses with predictable cash flows and collateral that can easily be recovered, and financing agricultural enterprises exposed to multiple operational risks.
He cited a scenario where an importer bringing frozen poultry or packaged rice through Tema Port, for instance, may offer banks inventory held in a bonded warehouse, digitised customs records and a relatively short repayment cycle.
On the other hand, he observes that agricultural businesses face a different reality. Limited irrigation exposes farmers to unpredictable rainfall, poor feeder roads make transporting produce difficult, and weak land documentation complicates the use of farmland as collateral.
These challenges increase production costs, disrupt supply chains and make it harder for farmers and processors to generate the reliable cash flows needed to repay loans.
The analysts also points to delayed payments to institutional food suppliers, including those serving the Free Senior High School programme, as another source of uncertainty for businesses supplying the agricultural value chain.
The State Must Fix What Makes Agriculture Unbankable
The implications extend beyond individual farmers. When banks perceive agricultural lending as excessively risky, they are more likely to direct funds towards sectors where repayment is faster and collateral easier to recover.
He advocates that government must address the conditions that produce these risks rather than treating loan defaults as an isolated problem.
“We do not starve agriculture and manufacturing because they default. They default because we starve the physical and digital infrastructure that makes them bankable.”
In the view of the analyst, agricultural financing cannot depend on lower interest rates alone. Investment in irrigation, feeder roads, reliable land records, digital systems and timely government payments must become central to the country’s strategy for making agriculture commercially viable and attractive to lenders.
