UNCTAD/ ECOWAS REGIONAL WORKSHOP FINANCING BIOFUELS WITH
SPECIAL EMPHASIS ON JATROPHA AND CDM ACCRA 13 -14 NOVEMBER,2006
Not an official UNCTAD document
SUPPORTING THE DEVELOPMENT OF JATROPHA FARMS WITH MICROFINANCE FOR
JOB AND WEALTH CREATION, REDUCTION IN URBAN DRIFT.
BY
DR. J. KOFI AGYEKUMHENE
Chief Executive Officer
MICROFINANCE AND SMALL LOANS CENTRE, ACCRA, GHANA
Mr. Chairman, Honourable Ministers from the Sub -Region, Distinguished Workshop
Delegates, Members of Media Fraternity, Ladies and Gentlemen, all protocols observed.
INTRODUCTION
I deem it personally a privilege for me to participate in this very important workshop and, even, have the opportunity to present a paper on a critical subject which bears on an economic production strategy that has considerable significance on the various initiatives and efforts being made at the struggle against poverty in our respective countries. In Ghana, our effort at economic development in general and poverty reduction, in particular, are based on three major frameworks, notably, New Partnership for Africa Development (NFPAD), the Millennium
Development Goals (MDG) both of which are subscribed to by Africa Union nations and
Ghana Poverty Reduction Strategy, now Growth and Poverty Reduction Strategy (GPRS II) which is confined to Ghana alone. These development frameworks, in the immediate to long term perspectives, have similar objective profiles which culminate in reducing poverty and deprivation.

overall development and production requirements of the subsector. MASLOC's mandate is to enhance the development of a sustainable and decentralized microfinancial system, promote coordination and collaboration among stakeholders and ensure judicious or prudent administration of the Fund which has been created. In this process, jatropha production is one of the key activities to be supported and, hopefully, it would provide jobs that will keep our youth in their respective communities and thereby enhance the reversal of urban drift. It will at the same time offer alternative livelihood to women.
DISTURB ING ECONOMIC SITUATIONS IN SUB REGION
In our resolve to address the plight of the poor, Mr. Chairman, distinguished delegates, ladies and gentlemen, the next important considerations we need to take into account is the prevailing situations commonly crippling our various economies in the Sub Region and explore how to exploit the opportunities currently unfolding to us to abate them.
The West Africa sub-region is one of the well endowed in the world with rich minerals, oil and other natural resources. With a population size of about 250 million people, it has a huge market potential. However, harnessing this potential to its optimum economic use has been elusive because of structural difficulties in the economies of member states - near total dependence on energy imports, the lack of food security, low incomes, to mention a few.
With a per capita income below $500, the huge population hardly translates into an equally large market. This grave situation has been further aggravated by energy crisis facing many nations. The structure of the labour force of most economies in the sub-region is biased towards agriculture, which itself ranks to be among the lowest in productivity in the world.
This is because agriculture is largely rain-fed, dominated by small-scale farmers and hardly mechanised. Fertilizer usage per capita is also very low because of scarcity of foreign exchange to import the products. Due to such constraints and challenges, financial institutions find the agricultural sector unattractive and the resultant lack of credit facilities to the sector further compounds the problem.
ECONOMIC OPPORTUNITY AND PROSPECTS THROUGH ]ATROHA
The issue in point is whether or not this gloomy situation can ever be prevailed upon to bring hope to our people. The response is positive. The land-mass of the sub -region presents a big

The costing of the project has been divided into two major parts - the plantations development, which is the main reason we are gathered here today, and the manufacturing operations. The strategy to develop the plantations will differ from country to country.
However, it is estimated in Ghana to cost up to $700 for a hectare. In this regard, the total estimated cost of developing the 12.8 million hectares will come to about $9 billion. This is the initial, one time development cost.
Additional expenses of about $5 billion will be made on farm maintenance, crop harvesting and warehousing and fertiliser application each year, starting from the second year. On the other hand, the total revenue from the plantations is estimated at $20 billion per annum.
This is expected to be realised when the plant matures twelve months after planting.
One can easily conclude that if this project, is implemented, will lift the per capital income, enhance agricultural yields, increase employment and enhance the achievement of wealth creation goals in the sub-region. One could also easily imagine the hurdles which must be overcome to successfully implement the project, the main obstacle being funding. It sounds like a hypothesis now, but this can easily be brought into fruition if we are appropriately oriented to pursue the cause with determination.
PHYSIC NUT PRODUCTION APPROACH IN GHANA
In Ghana, a two pronged policy approach has been adopted in pursing of our goal. This is line with the international protocols indicated earlier as well as GPRS I and II. The adoption of Microfinance and physic nut production or jatropha cultivation as a strategic package is informed and guarded by our rich experience in cocoa production. Whereas agriculture has been the mainstay of our economy for over a century now, cocoa production by the so called peasant farmer has been the backbone for our exports and for the matter, foreign exchange earnings and the overall socio-economic development. Currently, Ghana is the second largest
2 www.inf.ora (import bill on fuels)
3 Assumption 1 person to 2 hectares at advanced stage figure will double to 12.8 if one person manages 1 hectare

commercial and outgrowers systems are to be adopted. It is planned that each District
Assembly will develop between 500 to 2 000 hectares of farm depending on availability of land. As much as possible, the minimum size of a block may not be less than 50 hectares.,
Provision of inputs and other services will be centrally planned around the block farms. After the initial investment in developing the block, the entire farm will be partitioned into plots of one to two hectares and assigned to the indigenous or settled youth for maintenance and harvesting. Outgrowers will also be encouraged within the community. Large scale commercial farmers will be equally given the same opportunity as the block farms with regard to the outgrower system. In both the block and outgrower systems, consideration is given for cultivation of other food or cash crops side by side. Other alternative livelihood and income generation activities such as bee keeping, grasscutter, mushroom and snail production will be introduced. The entire operations are to be backed by both extension and research technologies mainly provided by the Ministry of Food and Agriculture, as well as the
Ministry of Lands, Forestry and Mines, supported by Ministry of Local Government Rural
Development and Environment as well as the research institutes. Marketing arrangements have also been planned around the block and commercial farms. In this regard, it is intended to introduce or replicate similar arrangements for marketing cocoa. The infrastructures and facilities will be positioned in or close to the large block or commercial farms within a predetermined enclave. Of course, both production and marketing of the nuts will be private sector driven. Implementation is commencing within the next four weeks as MASLOC has already released funds through MLGRD for the first batch of 29 District Assemblies to operate.
Mr. Chairman, the decision to forge ahead with the programme demanded three cardinal assurances. First and foremost, the Anuanom technology, achievements and experiences are convincing enough for adopting as a nation to embark upon large scale cultivation. Secondly, the Government, through its line Ministries and MASLOC, had to provide the assurance that resource will be made available for development of the farms for the first phase of the programme if the processing machinery and equipment for the nuts as well as the market for the products can be guaranteed. Thirdly, the funding agencies on the other hand, wanted assurance that the raw material base will be certainly available before any financing commitment would be made. Ultimately, Government committed to embark upon facilitation

availability of resources for development and their effective management, Africa can produce enough bio-crude oil for the benefit of the entire world to abate the energy crises related to diesel oil.
CONCLUSION
Mr. Chairman, in the words of a prominent United Nations official "'*Jatropha is a salvation to
African economies and a blessing to the whole world". The realization of this vision, no matter how it is viewed, will be a win win situation between African countries on one hand and all other nations on the other. Accordingly, the creation of a Bio-Fuel Fund for Africa to achieve this economic feat and progress for the benefit of the entire world needs the goodwill and active support of our development partners, funding agencies, international banks and investment houses to mention a few. Here is a platform for multi-national cooperation both north south-and south-south for the welfare of all nations. It is accordingly incumbent on our Governments to spare no effort for the realization of this objective in line with MDG goals of:
i) Eradicating extreme poverty and hunger ii) Forging global partnership for development.
The vision is clear and the message is directed to us all. It is a challenge we should overcome at all cost. Our decision at this important workshop must accordingly initiate action for its realization.
On this note, Chairman, I wish the delegates continued fruitful deliberations and positive outcomes that will enhance the achievement of our noble cause.
Thank you for your audience and God bless you all.