Brong-Ahafo, Northern

GOVPAMA

A female-dominated value chain oriented umbrella group is seeking for US$4.6m to improve access to mechanization systems for its members to increase productivity

Investment needed: $3,500,000–4,638,262

USAID FinGAP Environmental Risk Review completed
Business Type
Aggregation, Production
Deal Type
Debt
Financing
Cap-Ex, Working Capital
Value Chain
Soy

Market Opportunity

Demand for soybean and maize is strong, creating lucrative business opportunities for players along these value chains. Moreover, the Government of Ghana broiler revitalization project has provided market opportunity for farmers to increase production through use of effective and efficient systems. However, the pace and scale of agricultural investment is constrained by limited access to financial and technical resources among supply chain partners, particularly smallholder farmers. In order to take advantage of the market opportunities in maize, soybean, small holder farmers require access to high yielding and quality seed, mechanized land preparation, production and postharvest facilities. The Ghana Organic Vegetable Producer and Marketing Association (GOVPAMA) is playing that role profitably. There is opportunity for GOVPAMA to increase its capacity to reach out to its members to facilitate timely access to these services to take up the growing market opportunity.

Investment Opportunity

GOVPAMA is an umbrella group of approximately 56,000 members, over half of which are women, who are active in the production, storage, processing and marketing of cereals, legumes and vegetables. GOVPAMA supports its members to increase productivity by providing them with production and postharvest mechanization services, and supply of inputs such as organic fertilizers. Collectively, GOVPAMA members are cultivating a total of 18,000 acres of maize and soybean, and approximately 1,000 MT of rice for the domestic market.

GOVPAMA has a stable market for their goods. There is market for all GOVPAMA’s produce and products on all major marketing centers in the country. It continues to explore new markets, especially medium to large scale soybean and processing companies. It has signed contracts with some of them including 3,000 MT soybeans to Ghana Nuts Limited, 20,000 MT maize and 10,000 MT soybeans to Naaflim Company Limited, a poultry farmer, among others.

Moreover, there have recently been requests from some of the major supermarkets to supply them with some of their produce. The Government of Ghana broiler revitalization project has also provided another market opportunity for GOVPAMA to increase its production to meet the consequential demand for maize and soybeans as feed for the poultry farms.

In order to better serve their members, and tap into new market opportunities, GOVPAMA is seeking funding for investments in irrigation, tractors and accessories, purchase of a harvester, haulage trucks, and warehousing facilities.

Investment Required

GOVPAMA is planning total investments of over US$3m – US$5m made up of assets and working capital. These financing are expected to be obtained through debt and equity financing depending on availability, interest rates and the repayment terms. Out of the total investment cost of US$4,638,362, it is expected that US$3,404,000 will be financed with loan from a financial institution. US$ 1,234,362 is financed from GOVPAMA’s equity and this is in the form of mainly existing investments including farmlands, farming tools and cash of US$ 1,262. The Debt to Equity Ratio is 2.67 of 73.4% debt to 26.6% equity.

BAS Needed

GOVPAMA could benefit from Business Advisory Services to help them obtain a loan from a financial institution.

Environmental Considerations

An environmental assessment has been undertaken by the Environmental Protection Authority (EPA) and USAID-FinGAP, without any negative determinants identified.

Supporting Initiatives

There are a number of donor and government initiatives which support the feasibility of this investment, including: Savanna Accelerated Development Authority, Northern Rural Growth Project, USAID-ADVANCE II and USAID-Agriculture Technology Project.

Contact Info

GOVPAMA, Nana Yaw Aduebo II, Board Chairman, +233 (0) 249 796 601; (0) 549 392 090; (0) 506 900 2543; govpama188@yahoo.com