Agriculture is the backbone of the Ghanaian economy, playing an important role in the socio-economic development of Ghana as it contributes to ensuring food security, provides raw materials for local industries, generates foreign exchange, and provides employment to over 30% of Ghana’s workforce, and incomes. Yet agricultural growth has been slow and has not been accompanied by a growth in the manufacturing industry. insight
So how does Ghana bring about agricultural transformation to achieve national food security, power industrial growth, and improve livelihoods?
This is the main question stakeholders in the agricultural sector are asking. The two major political parties, the ruling New Patriotic Party (NPP), and the National Democratic Congress (NDC) have put forward policies for the agricultural sector. The party manifestos reveals a number of similarities between the two sides, but also key differences.
In this article, We share with you the performance of NDC’s (2013-2016) and NPP’s (2017-2020) based on publicly available data. We will also digest the policies put forward in both party manifestos, and then propose some policy options and recommendations for transforming the agricultural sector.
Agricultural Policies for the NDC’s (2013-2016) and NPP’s (2017-2020)
During the first term of the NDC (2009-2012), Ghana became self-sufficient in food production in 2010 and 2011 as total food production exceeded national demand. Cocoa production also exceeded one million tons for the first time in 2010/2011. In advancing the better Ghana agenda manifesto in 2012, the NDC promised to modernize agriculture in Ghana. Two main strategies the party outlined were the implementation of the Food and Agricultural Sector Development Policy (FASDEP) II and the expanded role of the National Service Scheme in food production. A project performance assessment report by an independent evaluation group of the World Bank published on March 6, 2017, indicated that government engagement was high with respect to identifying and meeting prior actions but the subsequent implementation of reforms was weak.
The NPP in 2016 highlighted that Ghana’s food production methods are not modern and income levels of farmers and fisherfolk remain low, thus making the sector unattractive for the youth as a sustainable means of livelihood. To ensure the sustainability of Ghana’s agricultural sector, the NPP government declared that in its four years in power, it would modernize agriculture, improve production efficiency, and achieve food security, and profitability for our farmers. The NPP also indicated that it would pursue a value-addition strategy, aimed at rapidly ramping up agro-processing and developing new and stable markets for Ghanaian products. In all, 33 key promises were made under Ghana’s agricultural sector with Planting for Food and Jobs (PFJ) being the most widely held policy. The promises were under four themes, which consist of improving production efficiency, development of products, storage, processing, and transport and marketing. In 2019, the government scored 60 percent in the agricultural sector based on IMANI Center for Policy and Education manifesto assessment tool. Next, we present the agricultural sector performance in the last 8 years in figure 1.
Agricultural share of GDP is the Gross Domestic Product (GDP) coming from the agricultural sector. This indicator provides an estimate of the relative importance of agriculture in Ghana’s economy with regard to generating national income. Also, the agriculture growth rate is the amount by which the agriculture output increases or decreases over a given period of time as a percentage of its previous value.
Agricultural Sector Performance from 2013- 2020
As shown in Figure 1, Ghana under the NDC recorded an agricultural growth rate of 5.2% in 2013 from 2.3% in 2012. The improved performance of the sector in 2013 was attributed largely to the more than projected growth of the crops sub-sector 5.9%, livestock 5.3%, and fisheries 5.8%, compared with the projected growth rates of 5%, 5%, and 2.3% respectively under the 2013 budget. In 2014, the update also notes that the agriculture sector experienced its lowest growth of 0.9% in the last eight years. The growth rate began to pick up in 2015 (2.3%) and 2016 (2.9%) under the same NDC. This performance under President John Dramani Mahama was due to the declining investment in the sector. Though agriculture has the potential to be one of the leading sectors for a more diversified economy, lack of public spending in the sector, and challenges with the regulatory framework to attract more private investment slowed down the performance of the sector under the NDC. However, the NDC increased the agricultural share of GDP from 21.7% in 2013 to 22.1% in 2014, an increase of 0.4%, and maintained the figure of 22.1% for three years. That is 22.1% in 2014, 2015, and 2016 respectively.
The NPP on winning the 2016 elections increased the growth rate from 2.9% in 2016 to 6.1% in 2017 due to the intervention of the Planting for Food & Jobs (PFJ) and others. The NPP under the leadership of President Nana Akufo Addo since January 2017 has implemented flagship programs aimed at achieving food security, job creation, and income. Despite these interventions, the agricultural sector performance reduced to 4.8% in 2018 and 4.6% in 2019. Under the 2020 budget, the agricultural sector was projected to grow at a rate of 5.4%. The COVID-19 pandemic will likely cause the growth rate to decline as well as the agricultural share of the GDP. Again, the sector’s contribution to the GDP reduced from 22.1% in 2016 to 21.2% in 2017, 19.7% in 2018, and 18.5% in 2019, a reduction of 3.6% since 2016. Though the share of the agricultural sector keeps reducing, it is known that when a country is developing, the contribution of the agriculture sector to the GDP must decline to pave way for the service, manufacturing, construction, and mining and quarry to lead. While this analogy is true, Ghana’s plan of focusing on agribusiness as a means to economic freedom, job creation, and providing raw materials for local industries has fully not been utilized. Insight Insight Insight Insight
Major Agricultural Policies going into elections 2020.
The NPP and NDC going into elections 2020 have outlined policy measures for the sector. In this section, We highlight the key policies both parties outlined in their manifesto. The ruling party NPP is promising to accelerate its efforts in modernizing agriculture along the entire value chain, including expanding the agricultural mechanization centers. The NPP is also seeking to focus on diversification of export-oriented, large scale agricultural enterprises in cocoa, palm oil, legumes, cereals, rice and horticulture, poultry, and meat for regional markets, and to promote access to finance through subscription to the Ghana Incentive-Based Risk-Sharing Scheme for Agricultural Lending (GIRSAL) program to finance and de-risk private sector investments in farming and other agricultural value-chain activities.
The National Democratic Congress, in trying to regain power from the New Patriotic Party promised to ensure the consistent annual increment of the cocoa price to make cocoa farming more attractive. They plan to increase beef cattle production by improving the production of silage, hay, and fodder banks. Constructing irrigation dams across the country, as well as completing the construction and operationalization of the Fisheries College at Anomabu are priorities to the NDC. Again, they have stated that they will work with the Poultry Farmers Association to increase capacity to meet domestic market demands and for export. To restructure rural credit and the Ghana Eximbank to improve credit to strategic agribusiness activities. Lastly, the NDC has promised to hand over the management of pre-mix fuel to pre-mix committees under the supervision of landing beach committees and align infrastructure development to key agro-productive zones. Insight Insight
Policy options and recommendations for transforming the agricultural sector
Now going back to the main question thus, how does Ghana bring about agricultural transformation to achieve national food security, power industrial growth, and improve livelihoods? It’s time to define our priorities in the agricultural sector. In the context of chronic agricultural underinvestment, enhancing agricultural sector spending could generate substantial gains in productivity, employment, and livelihood. Experiences from countries like Israel, Brazil, and China show how better expenditure targeting can drive agricultural growth. Ghana presents overall favorable conditions for agribusiness. To achieve this fully, there is the need to deepen and quicken the pace of reforms required to attract private sector investment in agribusiness. Linking farmers to markets are essential to agricultural development and rural poverty reduction is also critical for job creation. Skills development, particularly focusing on technical, managerial, and organizational skills required for agribusiness investment is critical. It is essential to promote entrepreneurship and business start-up training to create a demonstration effect to attract investors, including young people into the agricultural sector. insight insight insight insight insight insight