Ghana has the potential to become an important global food basket producer. This presentation serves as a teaser to the bigger picture

1. GHANA
“Unlocking Agricultural
Values”
December, 2013
John Aggrey
john_aggrey@outlook.
com

2. HIGHLIGHT SUMMARY
Subject
Sector
Overview
Sub-sectors
Investment
Incentives
Highlights
• It contributes about 23% to GDP (2012) and grew at a rate of 0.8%(2011)
• Contributes about 45% of all export earnings.
• Government is focused on accelerating the modernization of agriculture to
transform the economy through the continuous introduction of technology
, improved seeds, agric mechanization and investor participation
•
•
•
•
•
Crops
Cocoa
Livestock
Fisheries
Forestry
• Exemption from customs import duties on plant and machinery
• investors can have 100 % ownership in local companies and joint start-ups
• incentives for agro-processing activities, including a 5-year tax holiday from
start of operation
• Tax rebate for using local raw materials
• Guarantee of unconditional transfer through any authorized dealer bank of
dividends and net profits
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3. EXECUTIVE SUMMARY
The Government of Ghana is committed to increasing private sector
development and agricultural capacity to realize its vision of Ghana as a
prosperous middle-income country by the year 2020.
The Food and Agriculture Sector Development Policy (“FASDEP” II) includes
plans to modernize the agriculture sector through strengthening value
chains, enhancing productivity, improving quality standards, and promoting
public-private partnerships.
The identified basic problems of the agriculture sector include: reliance on rain
fed agriculture and low level and relatively inefficient irrigated agriculture; low
level of mechanization in production and processing; high post-harvest losses as a
result of poor post-harvest management; low level and ineffective agricultural
finance; poor extension services as a result of several institutional and structural
inefficiencies; lack of ready markets and processing; low performing breeds of
livestock; poor feeding of livestock; high cost of feed for poultry; poor livestock
housing and husbandry management; competition from imports and poor postproduction management of livestock products; over-fishing of natural waters;
undeveloped fish value chain (e.g. inadequate supply systems for fingerlings and
feed) and lack of skills in aquaculture.
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4. EXECUTIVE SUMMARY
The sector offers a unique set of advantages to interested investors, including
large plots of arable land, ecological zones that make the country suitable for the
production of a diverse range of commodities (maize, rice, oil palm, chili, cashew
and among others), a strong enabling environment for investment, and
established export channels to Europe and the United States
Strategies in policies and private sector-government participation to improve
agricultural performance should therefore focus on aggressive investments to
address these constraints and to improve agricultural productivity and enhance
market access.
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5. THE STATE OF THE AGRICULTURE SECTOR IN GHANA
It is difficult for African economies to be competitive in global agriculture markets
due to agriculture subsidies in the U.S. and Europe, efficient farming practices in
Brazil and Argentina, and the scale of rice production in Thailand and Vietnam.
In terms of staple crops, Ghana is largely a net importer. Not surprisingly, global
maize production is dominated by the United States, which offers generous
subsidies to corporate farms in the Midwest, and Brazil and Argentina, which have
some of the most efficient agricultural processes in the world.
Rice quality is rated on a scale of 1 to 5, with 1 being the highest quality. Rice from
Southeast Asia receives a 2.4 on average. In contrast, Ghanaian rice receives a 4.7.
As a result, Thai and Vietnamese rice are popular in the urban areas, where
customers are less price-conscious (even though the difference in price is not
huge).
Other top rice importers include the United States and Pakistan.
Ghana is highly competitive in one key cash crop – cocoa, for which it controls
24.5% of the world market – and involved in the importation of several others
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6. REGULATORY BODIES AND PRIMARY ROLES
INSTITUTION
Ministry of Food and Agriculture(
“MOFA”)
Ministry of Health (“MoH”)
Ministry of Trade and Industry
(“MOTI”)
Food and Drugs Board (“FDB”)
FUNCTION
• To promote sustainable agriculture and thriving agribusiness through
research and technology development, effective extension and other
support services to farmers, processors and traders for improved
livelihood.
• Provision of a strong and effective advocacy role in inter sectoral action
in the health delivery.
• Provide framework for the regulation of food, drugs and health service
delivery and practice.
• Responsible for trade and industry policy formulation, monitoring and
evaluation.
• The principal agency responsible for coordinating and monitoring the
implementation of private sector programmes and activities
• charged with the regulation of food, drugs, Food supplements, herbal
and homeopathic medicines, veterinary medicines, cosmetics, medical
devices, household chemical substances, tobacco and tobacco
products.
Ghana Export Promotion
Authority(“GEPA”)
• GEPA is the National Export Trade Support Institution of the Ministry of
Trade and Industry (MOTI) responsible for the facilitation, development
and promotion of Ghanaian exports.
Ghana Standard Authority (“GSA”)
• It undertakes testing and inspection services of all products
• Has the mandate to offer product certification approval
• Destination inspection of imported high risk goods
Ghana Free Zone Board (“GFZB”)
• The GFZB was established by an Act of Parliament to enable the
establishment of free zones in Ghana for the promotion of economic
development, to provide for the regulation of activities in free zones
and for related purposes, organizing market missions to enable
Ghanaian exporters meet prospective overseas buyers.
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7. INDUSTRY OVERVIEW
Industry breakdown
Sub-sectors
Agricultural performance as measured by the value of
Agricultural Gross Domestic Product (“AgGDP”) over the
period 2007-2012 increased from GH¢5.3 billion in 2007 to
GH¢6.6 billion in 2012.
Agricultural Sub-sectors
7.1%
7.6%
11.1%
It contributed to about 45% of all export earnings.
59.9%
Ghana remains a major net importer of agricultural food
products, with imports of approximately 1 billion and
exports of about $100 million in 2011.
14.3%
Crops
Source: MOFA,GSS 2012
Fisheries
Livestock
Agricultural Growth Rate
•
•
•
•
•
•
•
Farm inputs availability
Fertilizer subsidies
Investment incentives
Land acquisition
Inadequate farm inputs
Loan access
Low investor relations
Agric. % Growth Rate
9
7.4
% Growth Rate
Challenges
Forestry
Source: MOFA, 2012
Key Trends
Drivers of
Growth
Cocoa
7.2
5.3
4
0.8
-1
2007
2008
2009
2010
2011
1.3
2012
Source: MOFA, 2012
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8. RICE
Overview
Top rice exporters to Ghana (2005-2010)
 The value chain for rice in Ghana is divided into two
main channels: the local rice and the imported rice
value chain.
 Rice imports are subject to an import duty of 20%.
 Per capita consumption of rice in 2010/2012 is
estimated at 25.83 kg.
 Rain-fed rice production contributes 84% of total
current production, generating average paddy yields
of 1.0 - 2.4 metric tonnes per hectare.
 while irrigated production accounts for just about
16% of production but produces the highest average
paddy yields of 4.5mt per hectare.
2.38% 1.95%
0.99%
Thailan
d
Vietnam
21.60%
36.19%
USA
Pakista
n
India
30.36%
Togo
Source: UNCOMTRADE
Source: MOFA
Production
Major Importers
Annual variations in Rice Production
600,000
Royal Bow
Company Ltd
Olam
Cereal Investment
Co. Gh. Ltd
491,603
500,000
400,000
463,975
485,500
2011
2012
391,440
300,000
CCTC
Ezal Trading Gh.
Ltd.
200,000
100,000
0
2009
Source: UNCOMTRADE
Source: MOFA
2010
Rice Prod (MT)
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9. OIL PALM
Overview
Top African Oil Palm Producers, 2011/2012
 According to MASDAR’s 2011 Oil Palm Master Plan
Study for Ghana, “the projected domestic national
demand for fresh fruit bunches (FFB) was 6.7 million mt
in 2011 while local production for that year was only
estimated to be 3.7 million mt.
 In Ghana some of the major players include in
SIAT, Wilmar International and NORPALM.
 Palm oil is 5-10 times more productive than other oil
bearing crops and has the lowest requirement for
inputs of fuel, fertilizers and pesticides per tonne of
production.
 Palm oil presently accounts for a 21% share of the
global edible oil market.
Guinea
3%
Ghana
6%
Liberia
2%
Cote
dÍvoire
16%
Nigeria
46%
Congo DRC
10%
Cameroon
10%
Sierra
Angola Leone
3%
2%
Benin
2%
Source: MASDAR, 2012
Of the 17 major vegetable oils traded on the international market, palm oil is the most important
Global Consumption (million tonnes)
60
50
49.05
42.15
40
30
24.05
16.65
20
12.95
8.71
10
7.42
5.33
4.82
4.03
3.1
0
Palm Oil
Soybean Oil Rapeseed Oil Lard & Tallow Sunflower Oil
Source: UNCOMTRADE
Others
Butter
Palm Kernel
Oil
Cottonseed Groundnut Oil Coconut Oil
Oil
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10. CASHEW AND SHEANUT
Overview
Highlights
In total, more than 80,000 metric tonnes of raw cashew nut
was exported in 2011.
On the processors side, Ghana has an installed processing
capacity of about 18,000 metric tonnes.
The prospects of Ghana's cashew production is high
because the country can rake in between US300m and
US400 if increases cashew production from the current
50,000 metric tonnes to 200,000 tonnes annually.
With the global demand for shea butter in the Western
world, it has become a hot commodity.
Production was more than 20,000 metric tonnes of
raw cashew nuts in the year 2012, with its production
largely centred in the Brong-Ahafo Region.
It is used in food products such as chocolates. Confectioners
use it as a cocoa butter equivalent to give chocolate a higher
melting point and a smoother texture. The butter is used in
popular chocolate bars such as Milky Way and Kit Kat.
he country is considered to be the hub for trading
cashews from neighbouring countries, including Cote
d’Ivoire and Burkina Faso.
EXPORT EARNINGS OF CASHEW AND SHEA NUT AS AGAINST OTHER COMMODITIES
175,000.00
150,000.00
146,716.33
125,000.00
100,000.00
75,000.00
50,000.00
33,451.53
29,056.76
16,946.04
25,000.00
16,519.17
12,922.09
12,481.42
0.00
Cashew
Sea Food
Sheanut
Banana
2011
Source: GIPC, Ghana Statistical Service, 2011
Pineapple
Coffee
Yam Products
2010
10

11. BANANA
Corporate Overview
EU Imports from Ghana (ton)
The Ghanaian banana industry has a significant
advantage in that most of the banana farms were put in
place only a few years ago.
In 2010, bananas represented 47.7% of Ghana’s fruit
exports value to the EU market.
With the decline of the pineapple industry, the banana
sector ensures a sustainable alternative and constitutes an
important source of employment and
incomes, contributing to the social and economic
development of the country.
It is also a foreign exchange earner that contributes to
Ghana’s balance of payments.
60,000
52,631
2010
2011
46,232
50,000
40,000
53,167
33,404
30,000
20,000
10,000
0
2007
2008
Source: EU- Ghana Trade Reports
WHY INVEST
Competitiveness component
extension of current plantation areas to improve productivity of commercial (exporting) banana growers;
housing for banana workers and
(water, electricity, health, education);
their
Social component
families, including
access
to
basic
commodities
and
services
Agricultural component
increasing local capacities to provide the sector with quality inputs and resources (technology, research, development and extension
partnership with private sector;
Investment component
general investment promotion; land administration improvement; services and infrastructure provision for banana developments or
extensions including cold storages.
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12. INVESTMENT CLIMATE AND INCENTIVES
Investors can have 100% ownership in local companies and joint start-ups.
Exemption from customs import duties on plant and machinery, equipment
and accessories imported exclusively and especially for establishing enterprises
Multilateral Investment Guarantee Agency (MIGA) membership – Ghana’s
signature of the World Bank’s MIGA convention guarantees coverage against
non-commercial risks
Additional incentives for agro-processing activities, including a 5-year tax
holiday from start of operation
Location incentives –After the initial 5-year tax holiday period, agro-processing
enterprises that use local agricultural raw materials as their main inputs will
have corporate tax rates based on location
LOCATION
Accra-Tema-20%,
Other Regional Capitals-10%,
Outside Regional Capitals-0 %,
Throughout Northern, Upper East, Upper West Regions –0%
Source: Ghana Investment Promotion
Council
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13. THANK YOU