Printer Friendly

Tapping the potential of agriculture to drive growth.

Agricultural development in Ghana is one of the most important factors in combating poverty and achieving prosperity across all sections of society. Growth in the agricultural sector is two to four times more effective than any other sector in raising incomes in poor communities, according to the World Bank. And although the sector's share of gross domestic product (GDP) has decreased in recent years, it continues to be vital to growth, still accounting for around one-fifth of GDP.

The World Bank's Third Ghana Economic Update proposes that, with the right reforms, agriculture can be a "significant driver of growth and employment".

Small-scale producers dominate the sector and account for about 80% of overall agricultural production, including both crops and livestock.

The share of the agricultural sector in total GDP fell from 30.4% in 2010 to 18.9% in 2016, according to figures from the Ghana Statistical Service (GSS) published in 2017.

In 2016, the agricultural sector expanded marginally to a growth rate of 3.0%, compared to 2.8% in 2015. Crops accounted for 14.6% of nominal GDP, with cocoa being the dominant crop, according to the GSS report.

The effects of climate change on the sector cannot be ignored, specifically the high rainfall and extreme drought experienced by the Northern region. This adds an additional challenge to transforming Ghana's agricultural sector.

However, government's commitment to investing in technologies and establishing new policies to protect and support the industry are promising. President Nana Addo Dankwa Akufo-Addo has also pledged to revolutionise agricultural through the Planting for Food and Jobs (PFJ) policy to create more than 750,000 jobs and motivate farmers to grow staple crops such as maize, millet and beans.

As a tropical country with three main agricultural zones (the forest vegetation zone and the coastal and northern savannah zones), producing a wide variety of crops and able to sustain a range of livestock, Ghana is well-positioned to become a leading agricultural producer.

However, with a number of crops and segments performing well below capacity, there is significant opportunity for greater investment from the private sector.

Overview

Ghana is one of the world's largest cocoa producers and the crop is Ghana's largest agricultural export, with production standing at around 800,000 tonnes annually. As in most cocoa-producing countries, Ghanaian cocoa is grown by small-holder farmers.

In 2018, the Ghana Cocoa Board (COCOBOD) announced that it expected to boost cocoa production from around 800,000 to 1 million metric tonnes from ahead of its five-year production target because innovations in the industry are yielding results. Other leading exports are fresh and tinned tuna, shea nuts, cashew, fish, yams, banana and pineapples.

The cocoa industry in Ghana is vital to the strength of the formal economy and it employs 1.5 million people in production and transport. In recent years, the government has encouraged the development of the non-traditional agricultural sector in order to diversify the country's export base. It has also implemented policies that add value to Ghana's raw agricultural products like cocoa, as well as cotton and oil palm among others. In recent times, intensive efforts have been made by government to process some of these products. For example, the volume of cocoa beans processed locally has doubled in the last decade.

Ghana's primary cash crops include: cocoa, beans, palm oil, pineapples, cotton, tomatoes, bananas, citrus fruits, coconuts, tobacco, cashew and fresh vegetables.

Ghana's production of cotton is concentrated in the three northern regions and provides income to a large sector of the peasant farmer population.

Tomato is the most important vegetable in Ghana and a primary cash crop; annual production has doubled over the last 30 years.

Coconut and cashew production in Ghana is mainly a smallholder activity, while citrus fruits, grape, ginger, mangoes, banana, avocados, guava, and pineapples are cultivated on a large scale. Annual production of citrus and pineapple is estimated at over 20,000 and over 60,000 metric tonnes respectively.

Attractions

Agribusiness in Ghana is attractive for a number of reasons:

* Diversity of commodities due to diverse agro-ecological zones; this allows for easy diversification of farm production systems

* A well-endowed network of water bodies which can be tapped for irrigation

* Comparative advantage in the production of roots and tubers can be built on to enhance food security and increase agricultural trade

* A well-established agricultural research system (e.g. CRIG, CSIR, agricultural colleges and universities) has contributed successfully to crop improvement (e.g. cassava, maize, rice, cowpea, etc.)

* Relative proximity to Europe (six hours direct flight) as an export destination compared to competitors in Southern Africa and Central and South America

* A flourishing horticultural sector with a knowledgeable private sector(e.g. established associations such as the Ghana horticultural and vegetable growers association)

* Relatively cheaper fresh agricultural products for processing

The government is keen to make Ghana a leading agro-industrial nation and is therefore implementing programmes such as the Ghana Commercial Agriculture Project (GCAP) and West African Agricultural Productivity Programme (WAAPP) to increase agricultural productivity and investment. Many agricultural businesses are tax-exempt for the first five to 10 years of operations.

Incentives and Benefits

* There are exemptions of import duties on imported plant, machinery or equipment and agro inputs such as fertilisers, weedicides and pesticides

* Five-year tax holiday for the cultivation of horticultural crops, cash crops, fish farming, poultry and farming livestock other than cattle

* Ten-year tax holiday in the case of cattle farming/ranching

* Ten-year tax holiday in the case of farming tree crops (e.g. coffee, oil palm, shea-butter and coconut)

* Agro-processing companies established in Ghana will enjoy a five-year tax holiday from the date of commencement of business. After the initial five-year tax holiday period, agro-processing companies that use local agricultural raw materials as their main inputs shall have corporate tax rates fixed according to their location (Accra and Tema--25%; all other regional capitals--25%; outside regional capitals--25%)

* Timber processing companies have corporate tax rates based on their locations (Accra and Tema--25%; all other regional capitals--18.75%; located outside regional capitals--12.50%)

* Companies producing cocoa by-products from cocoa waste also enjoy a five-year tax holiday from date of commercial production

* Companies engaged in the processing of waste products enjoy seven-year tax holiday from date of commercial production.

* Cocoa farmers / producers' incomes are exempted indefinitely from taxes

* The law also permits farming losses to be carried forward for five years of assessment

* The Ghana Investment Promotion Centre Act 865 also provides for automatic quota incentives and benefits

Caption: A woman cleans ginger to sell at Agbogbloshie market in Accra
COPYRIGHT 2018 IC Publications Ltd.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 2018 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:AGRICULTURE; Ghana
Comment:Tapping the potential of agriculture to drive growth.(AGRICULTURE)(Ghana)
Publication:African Business
Geographic Code:6GHAN
Date:Oct 1, 2018
Words:1087
Previous Article:Gold Fields in Ghana--25 years of providing leadership in sustainable gold mining.
Next Article:Exploiting potential for growth.
Topics:

Terms of use | Privacy policy | Copyright © 2019 Farlex, Inc. | Feedback | For webmasters