Government to support Volta River Estates Limited
Government to support Volta River Estates Limited
Akwamufie (Eastern Region) 19 Aug. '99
The government will support the efforts of the Volta River Estates Limited (VREL), sole exporter of banana in Ghana, to secure a 7.5 million-dollar loan to expand its plantation by 150 hectares.
Mr J. H. Owusu-Acheampong, Minister of Food and Agriculture, who gave the assurance on Wednesday said as the leader in the banana sector, the company must succeed for others to emulate.
He gave the assurance in response to an appeal made by Mr Jorge Calvo, Managing Director of VREL, during a visit to Akwamufie to find out how the company was faring after rainstorm destroyed its 100-hectare plantation at Akuse, last February.
The company has more than 300 hectares of land under cultivation.VREL has appealed to the government to guarantee the loan it was contracting from ASN Bank of Netherlands.
Part of the loan would be used to cultivate a 90-hectare plantain farm and also support a 120-hectare farm for out-growers.
Mr Owusu-Acheampong said since it is a concessionary loan with a low interest rate and an eight-year re-payment period it falls within the International Monetary Fund's (IMF's) regulations, therefore, the government could guarantee it.
"We need to discuss this at Cabinet level and in Parliament to seek approval.
However, I believe if you send a letter of intent from the Ministry of Finance it would facilitate the process".
Mr Owusu-Acheampong, who was accompanied by Dr Francis Ofori, Director of
Crop Services, said the government is committed to the out-grower scheme, which helps small-scale farmers to benefit from the experience of large-scale ones.
He announced that a meeting had been planned for experts to work out modalities for out-grower schemes to improve agricultural production.
The Minister said VREL's programme for out-growers in banana and plantain is very important for Ghana to make an impact on the banana market and ensure the availability of plantain on the market throughout the year.
"We have to increase production because we hope to resolve the EU (European Union) licence problem soon."
He explained that since plantain is usually planted as a cover crop for cocoa, its production has gone down with the reduction in rate of cultivation of new farms.
Mr Owusu-Acheampong praised VREL for its healthy farm practices and use of modern technology, adding: "Ghana needs more of these farms."
Mr Calvo said he was encouraged by the government's positive response because the loan is crucial to the survival of the farm.
Following the rainstorm the company's production capacity fell from 8,000 boxes of exports a week to 2,000 boxes.
The company also found it difficult to pay its workers until the intervention of the Agricultural Development Bank.
Mr Calvo said exports have, however, increased to 3,000 boxes and expressed the hope that by December it would rise to its former level.
He said with the expansion, the company would improve its presence on the banana market and thanked the government for the assurance.
Dr Ofori urged the company to link up with the Ministry's extension officers for exchange of skills and knowledge.
VREL, which started large-scale production of bananas in 1988, suffered a major setback in 1991 when the black leaf spot disease attacked the crop.
In 1993, it revived its operations and started exporting banana to the European market.
This was, however, short-lived as the European Union promulgated the Banana Protocol, which denied it direct access to their market as a non-traditional exporter.
In view of this, the company pays a penalty of about 4.5 dollars on every box of about 18 kilograms it exports to the EU.
With the support of Max Havelaar Foundation of the Netherlands its banana is promoted as an environmentally friendly product and it recently received a certificate as Africa's number one Banana Fair Trade Producer.
The benefits of the certification include giving workers 25 per cent share holding, improved free medical care and above average salary earnings.
It has over 800 workers.
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Return to top Market index slumps
Accra (Greater Accra) 19 Aug. '99
A string of losses in the share price of three equities on the Ghana Stock Exchange (GSE) on Wednesday sent the GSE All-Share Index tumbling by 11.8 points and wiping off the 6.75 points it gained on Monday.
The All-Share Index closed at 778.32 points and brought the change of the year to date to negative 10.37 per cent.
Total shares traded on the market slipped slightly to 154,900 compared to the 166,200 during the last trading.
Demand for shares dropped sharply to 191,000 against 1.02 million last Monday while offers also went down 1.69 million from 1.78 million offers.
Market capitalisation under the burden of the huge loss in the market index dropped to 3,264 billion cedis from 3,283 billion cedis registered when trading opened on Monday.
In the broader market, three equities declined. They are Ghana Commercial Bank (GCB), Guinness Ghana Limited (GGL) and Mechanical Lloyd Company (MLC).
GCB lost 103 cedis to end at 790 cedis while GGL and MLc lost 10 cedis each to finish trading at 1,005 cedis and 180 cedis respectively.
The following are the last prices of listed equities:
ABL 400
AGC 18,700
ALW 2,600
BAT 410
CFAO 40
EIC 1,990
FML 1,249
GBL 1,550
GCB 790 -103
GGL 1,005 -10
HFC 750
MGL 220
MLC 180 -10
MOGL 16,000
PAF 290
PZ 840
SCB 21,060
SPPC 180
SSB 1,980
UNIL 1,950
UTC-E 125
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