GTIS Quarterly Progress Report: FINANCING GHANAIAN AGRICULTURE PROJECT (USAID FinGAP)

The project aims to facilitate agriculture-related finance and investment to target value chains in northern Ghana to improve food security for the poorest populations in Ghana. USAID FinGAP engages a broad range of Ghanaian Financial Institutions (FIs) and Business Advisory Services (BAS) providers, providing training and technical assistance to these actors, and supports risk mitigation interventions to facilitate large-scale finance and investment to actors operating in the rice, maize, and soya value chains in Northern Ghana that have strong links to smallholder farmers. The project tracks and assesses outcomes for its FIs and BAS providers, specifically the level of finance and investment facilitated by these actors, as well as overall sales figures generated by participating firms. The program mandated performance management tools and indicators are not explicitly geared towards ascertaining the full range of impacts that emanate from its assistance to the program ultimate beneficiaries, namely small, medium including large enterprises (SMiLEs) and smallholder farmers. This internal performance assessment aimed to reveal the firm-level impact generated among these actors. The findings of this internal performance assessment demonstrate significant benefits to SMiLEs and smallholder farmers as a result of receiving increased access to finance and investment from USAID FinGAP. SMiLEs and smallholder farmers directly and indirectly benefiting from USAID FinGAP report increased profits, gross revenues, and labor utilization. For example, smallholder farmers and SMiLEs in the maize and rice value chain increased profits by 25% and 12%, respectively, from 2013 to 2016. SMiLEs also increased their profits for maize by 64% and for rice by 55% during the same period. The assessment also finds that challenges persist in the agricultural sector where these SMiLEs and smallholder farmers operate. These challenges include the continued need to improve farmer resilience and ability to cope with threats and shocks, particularly those related to rainfall patterns. Limited access among farmers to assets such as mechanized farm equipment and affordable inputs such as fertilizer also remains a challenge. Additionally, inequalities between women and men remain entrenched in traditional gender stereotypes, with women being less comfortable speaking in public and speaking up for their own business interests and feeling they have less decision-making power than men. The performance assessment sought to identify and understand outcomes at the firm and smallholder levels, building on the USAID FinGAP 2015 Gender Impact Analysis. The assessment aimed to answer the overarching question of what have been the business/firm-level influence of project interventions on smallholder farmers and small and medium agribusiness enterprises outcomes. The assessment targeted firm-level impact on a variety of value chain actors, including beneficiaries directly and indirectly affected by the project. The project interventions affected the overall household/farm income/profitability in maize, rice, and soy production, with smallholder farmers and SMiLEs in the maize and rice value chain increasing profits by 25% and 12%, respectively, from 2013 to 2016. The project interventions also affected labor utilization by assisted farmers/firms, with SMiLEs hiring on average 13% more laborers across the 642 enterprises from 10,272 workers in 2013 to 11,556 in 2016. Additionally, the project beneficiaries invested earnings gained via project interventions, with 40% of smallholder farmers investing in agriculture-related businesses with their savings, 30% investing in their children's education, and 11% improving their homes. The assessment also found that SMiLEs decreased soya production by 41% and reported an average decrease of profits 68% from GH¢ 62,612 to GH¢ 20,271. Only 35% of SMiLEs received business advisory services in the past 12 months, highlighting the need for continued support to these actors. The assessment highlights the importance of addressing inequalities between women and men in the agricultural sector, with women being less comfortable speaking in public and speaking up for their own business interests and feeling they have less decision-making power than men.