No processors for mangoes … British company bucks out

Charles Benoni Okine reports on the situation with the EDAIF mango development project meant to among other things boost Ghana’s non-traditional exports.

Mangoes expected to be harvested from more than 4,000 acres of land in parts of the northern region stand the risk of going bad due to the lack of local and foreign processing companies to buy the produce.

Strenuous efforts being made by the Export Development and Agricultural Investment Fund (EDAIF) to attract prospective processors to buy and process the mango into juice for local consumption and for export is also not yielding any results.

Speaking at a forum in Accra, the Board Chairman of EDAIF, Professor Alex Doudo, expressed regret that the British produce buying company, Minor, Weirs and Willis which had earlier reached a marketing partnership deal with EDAIF to purchase Ghanaian mangoes under its mango development project is backing out of the deal.

“They wanted us to sign a direct agreement with them but we declined on grounds that EDAIF is not permitted by law to do so and referred them to our mother ministry but they insist they want to sign with us”, he said.

Professor Doudo said the situation has compelled EDAIF to scout for prospective local processors on its roadshow throughout the country but that has not yielded any results, making the situation dire.

On his part, Dr Abdul-Nashiru Issahaku, acting Chief executive Officer of EDAIF, told the Graphic Business in an interview after the forum that efforts are being made by EDAIF to ensure that monies were advanced to interested persons to buy processing plants to be able to harvest the mangoes.

“We are entering into an agreement with the Export Import Bank (EXIM Bank) of Ghana to take then risk off the prospective processors so they can go for the EDAIF loan”, he said.

One major issue with businesses people as far as sourcing loans EDAIF funds from the banks is the issue of collateral which the banks demand and which most of the borrowers are unable to provide.

Borrowers have also argued that the banks have often described them as too risky to deal with, and that Dr Issahaku explained “is why we are trying to get EXIM on board to take the risk as per its mandate”.

EDAIF provided funds for the cultivation of more than 5,000 acres of mango in the Brong Ahafo, Volta, Upper East, Upper West and Northern regions a couple years ago.

That was intended to give meaning to the government's plans to champion mango cultivation in the Savannah areas and other parts of the country as a mechanism to increase farmer incomes and combat rural poverty.

Already, EDAIF is reported to have invested more than GH¢11.7 million in the project and its goal is to ensure that a total of 20,000 acres of mango plantations are cultivated by 2013.

Background

The Export Development and Agricultural  Investment Fund (EDIF) has reached a marketing partnership deal with British produce buying company, Minor, Weirs and Willis, to purchase Ghanaian mangoes under its mango development project.

The agreement, would have ensured a ready foreign market for Ghanaian farmers and was also expected to generate a total revenue of GH¢46 million by 2013 and increase to about GH¢184.2 million by the close of the project in 2017.

EDAIF is to investing GH¢52.24 million over the next five years to boost the cultivation of 20,000 acres of mango for export in the savannah regions of the Northern, Upper East, Upper West, Volta and Brong Ahafo Regions.

The venture was in line with government policy to turn the five regions into a mango production hub.

The deal was expected to give mango producers and exporters a ready market for their produce.

Under the deal, Minor, Weirs and Willis, was expected to provide a large foreign clientele ready for Ghanaian farm produce, which meet the standard of the UK market.

Ghana has the potential to produce about 300 different kinds of farm produce out of the 600 product lines of the British company.

As part of the project, key infrastructure along the mango value chain, such as pack houses and processing facilities, would be provided.

Meanwhile, at the forum, stakeholders who included small business owners expressed misgivings at the treatment meted out to them by the banks.

They insisted that the banks continued to label them as risky and, therefore, denied them loans to either expand or recapitalize their businesses.

Consequently, they called on EDAIF to share some of the risk with the banks so they can lend to them without much reservations.

In his response, Dr Issahaku said now that the Fund was in discussion with EXIM Guarantee to take part of the risk, things might fall in shape.