Agriculture & food processing

Agriculture and food processing holds great value as it contributes to 54% of Ghana’s GDP and employs about 52% of the population with 29% in services, 19% in industry and an estimated 39% females in the farm labour force. In 2019, the value of Ghana’s agricultural sector was 11.5 billion USD and has the potential to thrive in the economy considering the climate, land relief and vegetation. Ghana’s main Agriculture activities are in horticultural crops, livestock, and fish farming, with its primary cash crops being cocoa, cashew, oil palm, pineapple, mango, cassava, tomatoes and vegetables. One of the major farming systems practiced is bush fallowing, a type of subsistence agriculture which allows cultivated land to restore its fertility over a period. With livestock production systems, Ghana mostly uses the mixed farming method and pure livestock farming system for meat production. Fish production involves inland capture and cultured fisheries. The main sources include the Volta Lake, lagoons, reservoirs, irrigation dams and other inland water bodies. Sixty percent of Ghana’s protein is obtained from fish farming and its related activities.

To promote its development, Ghana has implemented some policies and programmes that seek to sustain and ensure growth of the agricultural sector as follows: Ghana Shared Growth and Development Agenda (GSGDA I and II), Food and Agricultural Sector Development Policy (FASDEP I and II), Medium Term Agricultural Sector Investment Plan (METASIP I and II), Investing for Food and Jobs (IFJ) and The Coordinated Programme of Economic and Social Development Policies (2017-2024). Exports of agricultural products from Ghana are relatively competitive as compared to other exporting countries. The liberalized market economies have created the opportunity for horticultural producers to meet the European market requirements and diversify into other parts of Africa.

There has been an increment on food processing in Ghana by manufacturers thereby increasing exports of value-added products. Food processing is classified into two groups; domestic processing which is dominated by female workers and factory processing. Domestic agro- processors exhibit the high share of products among processed starches and cereals. The process involves using sophisticated machinery and equipment by turning grains to flour, adding sugar and salt, freezing, canning of food amongst others. About 85% of all agro-processing firms are SMEs, which, given their size, suffer more than large companies from ‘administrative-heavy’ statutory requirements, therefore have difficulty in achieving their Break-Even Point. Recognized brands such as Promasidor, Unilever, Nestle and Wilmar have made significant economic impact in Ghana due to the rise in demand of processed foods. Their price stability on the international market creates opportunities both on the local and export markets.

Ghana is very committed to supporting and protecting private investors in the agriculture sector as reflected in the policies implemented by successive governments. This is evidenced by Ghana’s performance with regards to USAID’s Agriculture climate, Legal and Institutional Framework. Ghana offers agribusinesses easy access to export markets in Europe at a lower cost than elsewhere in Africa. Agro-processing businesses are given a five-year tax holiday. There are also location-based tax rebates for agribusinesses engaged in manufacturing and custom duty exemptions for agricultural and industrial machinery and equipment imported for investment purposes. Investment opportunities exist in the areas of agriculture and agro-processing sector, technological and support services.

Despite this proactive policy to support agriculture, some sectors need to be rebuilt, such as the poultry production sector. Imports of frozen products, subsidised from their originating countries, have destroyed the poultry sector in Ghana, which was previously in surplus and exporting to the sub region. Today, local production is trying to recover, but the market is still largely dominated by imported products, supplied mainly by the United States, which has more than 40 percent of the market share, while European countries and Brazil each have a 25 percent market share.

The recent world crisis, whose negative effects on the economy in general and on developing countries in particular are accentuated by the war in Ukraine. This is weighing on the imports of countries, such as Ghana, thus heavily depreciating it’s currency the Ghana Cedi. This situation can on the other hand have a positive effect in certain sectors such as poultry production, it could reduce imports and boost exports, especially to countries in the region that are still tied to the CFA Franc and therefore have not had a depreciation of their currency.

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