Ghana’s budget allocation to the agriculture sector is still below 10 percent, after a decade’s pledge to reach the 10 percent Maputo target, report reveals.
According to the report, Ghana’s budget expenditure on food and agriculture experienced double-digit growth by 11 percent over 2004-2018. However, in real terms, public expenditure on food and agriculture over the period was abysmal.
Accounting for inflation, currency depreciation and demographic factors, Ghana’s expenditure on agriculture in real terms experienced negative growth. Specifically, real growth rate per capita of expenditure on food and agriculture was -4 percent.
The report revealed that at current rates of population growth, high inflation, rapid currency depreciation, there is need for countries to commit more resources to achieve a sustained growth in real expenditure on food and agriculture per capita.
Despite signing the Comprehensive Africa Agricultural Development Programme (CAADP), which sets the goal of investing 10 percent of the national budget on the agricultural sector, Ghana still lags behind in reaching the target.
The agreement signed by African countries in 2003 was in pursuit of an agricultural growth rate of 6% each year.
Although a recommitment to the Maputo declaration became necessary in 2014, evidence suggests that Ghana is still unable to meet the 10 percent allocation target. Within the period, only Malawi has been able to reach the target in every year, and Mali in some years.
Across 13 selected sub-Saharan Africa economies, total government spending on food and agriculture averaged around 6 percent, below the 10 percent target.
Factors that account for unfulfilment of pledge towards 10% allocation
Recounting the factors that are contributory to such a long period of unsuccessful expenditure on food and agriculture pertains to the available fiscal space and implementation issues.
Like most African countries, Ghana’s fiscal space for a sustained increase in agriculture expenditure is fairly narrow. According to the International Monetary Fund (IMF) Ghana’s annual growth of tax revenue from 2016-2019 was roughly 12 percent. This means that the rate of growth in food and agriculture expenditures is very close to the revenue. Thus, making it difficult to increase the share of expenditure and sustain commitments.
This is essentially no different from that of sub-Saharan Africa. Accordingly, the average annual growth of tax revenue (excluding grants) in the countries captured in the report during the 2004–2018 period was 16 percent, according to International Monetary Fund (IMF) data.
Thus, with the growth rate of food and agriculture averaging 13% over the period, this makes it entirely difficult for countries to sustainably allocate the targeted amount of expenditures to food and agriculture.
In 2019, research on Ghana’s 10 percent allocation on agriculture showed inconsistencies in Government’s expenditure share. The report noted that while Ministry of Food and Agriculture (MOFA) 2013 and 2017 figures indicated that Ghana has been close to achieving the CAAPD budget target and even surpassed the target for years, it was found out that the approaches used were inconsistent.
The estimated agricultural expenditures as a share of total expenditures from 2013 and 2017 ranged from 6.7%–21.2% in 2001-2011 and 5.8%–7.5% in 2012-2015. These figures indicated an average of 9.2% over 2001-2015
The two notable problems that were found were issues with definition of Agriculture used by MOFA compared with that of the African Union guidance note (AU-NEPAD 2015).
Another problem identified showed that MOFA’s calculations included expenses from Cocobod, whose treatment should have been different. Moreover, the government’s total expenditure (GTE) also suffered underestimations for so many years in the MOFA reports.
While the Government boasts of improving the agriculture sector with programmes such as the Planting for Food and Jobs (PFJ) and revamping the agriculture sector, this finding reveals that the resources committed do not solve the problems and that a lot needs improving as highlighted.
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