Summary
The government of Ghana is looking to create 1.5 million new jobs in agriculture in the next 2 years. Calls have been made to direct bank financing into agricultural investments. Yet systemic weaknesses beyond the agricultural sector need to be addressed if sourcing of local agricultural products is to increase. Policy interventions may also be needed to strengthen the functioning of local agricultural supply chains, with policy experiences elsewhere in Africa potentially holding important lessons.
According to press reports the newly elected government in Ghana is looking to reduce the food import bill and ‘create 1.5 million jobs in the next two years’, through investments in food security. According to the newly appointed Minister of Food and Agriculture, Owusu Afriyie Akoto, ‘the target is to create 750,000 jobs in the coming season on the farms and then next year we are going to double that to 1.5 million jobs’. The programme, to be launched in April 2017, is focused on ‘raising the output of corn, vegetables, rice and other crops’, through government provision of training, improved seeds and fertilizer to small farmers. Considerable priority is attached to reducing Ghana’s reliance on imports, given the annual food inflation rate of 9.7% in 2016 was largely driven by imported price inflation.
Meanwhile the General Agriculture Workers Union (GAWU) has appealed to the government of Ghana to ‘use policy tools to compel commercial banks in the country to cede a substantial portion of their loan portfolio to the agriculture sector’. This, it is felt, could address the current ‘low investment in the agriculture sector’, raising the productivity of local farming.
In terms of Ghana’s agro-food sector trade with the EU, between 2009 and 2015 the value of EU exports grew more than 3-fold (+220%). This was a substantially higher rate of growth than the value of overall EU exports to Ghana, which grew only 73.4% over the same period.
By 2015 food and agricultural exports accounted for 12.55% of total EU exports to Ghana, up from a share of 9.88% in 2009 (having peaked at a 13.33% in 2013, prior to the collapse of world dairy market prices and the introduction of what proved to be temporary restrictions on poultry meat imports into Ghana in 2014).
Value of Selected EU agro-food exports to Ghana 2009-2015 (€ ‘000)
| % share | 2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | % change | |
| 02 Meat & edible offal | 22.0 | 24,708 | 37,560 | 69,516 | 80,936 | 94,004 | 71,223 | 83,970 | +240% |
| 22 Bev & spirits | 15.8 | 25,829 | 39,748 | 54,797 | 76,634 | 89,518 | 65,912 | 60,487 | +134% |
| 03 fish & crustaceans | 12.7 | 7,104 | 22,929 | 20,382 | 33,912 | 38,297 | 23,015 | 48,472 | +582% |
| 04 Dairy produce | 10.1 | 3,615 | 24,837 | 28,863 | 31,304 | 40,794 | 36,775 | 38,713 | +970% |
| 19 prep of cereals | 8.1 | 17,212 | 27,308 | 32,224 | 35,867 | 44,524 | 28,554 | 30,857 | +79% |
| 15 Animal & veg fats | 7.1 | 14,991 | 23,943 | 25,764 | 29,706 | 30,412 | 21,826 | 26,927 | +80% |
| 10 Cereals | 4.9 | 7,734 | 13,964 | 17,868 | 21,353 | 15,346 | 16,527 | 18,612 | +140% |
| 23 residues & waste | 3.9 | 3,041 | 6,681 | 14,810 | 13,196 | 19,473 | 13,833 | 14,766 | +386% |
| 11Prod Milling indust | 3.0 | 16,402 | 13,350 | 14,377 | 17,307 | 17,872 | 8,498 | 11,329 | -31% |
| 21 Misc edible prepar | 3.0 | 5,556 | 8,430 | 10,970 | 9,642 | 10,289 | 8,152 | 11,313 | +104% |
| …. | |||||||||
| 07 Edible Veg | 0.8 | 885 | 1,391 | 1,441 | 2,097 | 3,494 | 2,764 | 2,891 | +227% |
| 08 Edible fruit | 0.3 | 346 | 466 | 406 | 584 | 729 | 572 | 1,236 | +257% |
| Sub-Total 01-24 | 173,241 | 266,694 | 331,956 | 408,379 | 455,431 | 331,025 | 381,629 | +220% | |
| 01-24 % total | 9.88% | 12.4% | 11.35% | 11.30% | 13.33% | 10.64% | 12.55% | ||
| Total exports | 1,754,258 | 2,149,737 | 2,925,936 | 3,613,401 | 3,416,392 | 3,111,675 | 3,041,201 | +73% |
Source: EC, Market Access Data Base, http://madb.europa.eu/madb/statistical_form.htm
In value terms, three of the four most important categories of EU food and agricultural exports to Ghana in 2015 grew in excess of the 220% rate of growth between 2009 and 2015. Exports of meat and edible offal grew 240%, while exports of dairy products and fisheries products grew 970% and 580% respectively. In 2015 these 3 product categories accounted for 44.8% of total EU food and agricultural exports to Ghana, up from 20.4% in 2009. EU exports of edible vegetables and edible fruit also grew in excess of the average level of growth in value of EU food and agricultural products, at 227% and 257% respectively (from €885,000 to €2,891,000 and from €346,000 to €1,236,000 respectively).
Sources:
(1) ‘Ghana government looks to create 1.5m farming jobs in two years’, 1 February 2017
http://www.freshplaza.com/article/170267/Ghana-government-looks-to-create-1.5m-farming-jobs-in-two-years
(2) thecattlesite.com, ‘Union urges govt to compel banks to allocate funds to agriculture’, 10 January 2017
http://www.thecattlesite.com/news/50630/union-urges-govt-to-compel-banks-to-allocate-funds-to-agriculture/
(3) EC, Market Access Data Base
http://madb.europa.eu/madb/statistical_form.htm
(4) Namibia Trade Forum, ‘Namibian Retail Sector Charter’, 10 March 2016
http://www.ntf.org.na/pdf/Retail_Charter_Document.pdf
| Comment and Analysis As the joint FAO/OECD review of West African food systems posted in December 2016 has pointed out, systemic weaknesses in most agricultural value chains in regard to ‘underdeveloped marketing … transport infrastructure, and erratic electricity supplies’ often encourage agro-processors, retailers and wholesalers to rely on imports (see companion article, ‘How can West African agro food sectors benefit from rising yet changing domestic food demand?’). These systemic weaknesses outside of the agricultural production sphere, need to be addressed, if local agricultural supply chains are to function more efficiently.In terms of marketing, if local supplies of agricultural products are to be encouraged then the government will need to set up a programmes of measures aimed at strengthening the functioning of local agricultural supply chains. In this context, recent patterns of growth in EU food and agricultural exports to Ghana could be closing off certain high value commercial opportunities. For example, the expansion of EU fruit and vegetable exports, when combined with the growth in the supermarket sector in serving coastal urban markets in Ghana, could limit opportunities for local producers in serving local high value horticultural supply chains. Similarly the phenomenal growth in EU exports of poultry meat and more recently dairy products, is undoubtedly closing off opportunities for the development of local animal feed supply chains. The development of local feed supply chains serving the poultry sector, have the capacity to generate a far higher level of employment opportunities than in poultry and meat production itself. Policy experience elsewhere in Africa in regard to strengthening the functioning of local horticultural supply chains (notably in Namibia) could be relevant in this regard. This experience highlights the importance of: a) Supporting farmer organization to strengthen the position of primary producers in the supply chains. b) Promoting targeted dialogues between traders, retailers and producers on: the type of products where higher value local production could most realistically be developed; the quality issues which need to be addressed; and volume and delivery schedule requirements in line with evolving consumer demand. c) Establishing closed internet based data bases, for traders, retailers and producers, which dynamically monitor the demand and supply situation and link up retailers and traders with local producers. d) Targeted investment to overcome logistical bottlenecks in the effective functioning of local supply chains. e) Deploying public policy tools (including the allocation of import licenses) to influence the procurement practices of traders and retailers, by incentivising the progressive expansion of local sourcing, in line with the development of local supply capacities. Where these types of integrated programmes have been implemented the results, in terms of increased local sourcing, can be impressive. In the case of Namibia local sourcing of horticultural products which could realistically be produced in Namibia increased from 5% to almost 50% in a ten year period. In some products full self-sufficiency was even attained, with exports now being developed. However there are fears the provisions of EU economic partnership agreements could bring into question the trade dimension of these integrated sector initiatives. In Namibia this has seen an intensification of dialogue efforts along the supply chain. A Retail Sector Charter has been developed and is now under implementation which seeks to secure voluntary buy-in from local retailers, traders and the hospitality sector to an expansion of local sourcing, within the realistic limitations which exist locally. This Retail Sector Charter approach seeks to root expanded local procurement in corporate social responsibility programmes, with other aspects of government policy being utilised to incentivise responsible corporate practices, in the light of national aspirations to create jobs and reduce the import bill (see companion article ‘Namibia’s Retail Sector Charter and the Strengthening of Local Supply Chains’). |
| Key words: West Africa EPA Tags: West Africa EPA, Cereals, Poultry, Dairy, Horticulture |