Over the last decade the relative size of the agriculture sector in Ghana, as measured by its contribution to overall economic output, has more than halved, amounting to 15.3% of nominal GDP as of the second quarter of 2019, down from 31.8% in 2009. Nonetheless, the sector retains its strategic importance as a major employer, comprising 44.7% of the labour force. Varying estimates put the percentage of households owning or operating a farm at between 44.1% and 51.5%, amounting to approximately 7.3m individuals.
Given agriculture’s crucial role in providing jobs for Ghana’s growing population, the government has embarked on significant modernisation efforts since 2017, chief among them the Planting for Food and Jobs (PFJ) initiative. This was followed in 2018 by the umbrella programme Investing for Food and Jobs (IFJ), which is focused on agriculture, food security and rural development. The sector’s current four-year plan, which runs from 2018 through to 2021, includes these programmes as well as other flagship projects such as Rearing for Food and Jobs (RFJ), Planting for Export and Rural Development (PERD), Greenhouse Villages and agricultural mechanisation.
Performance
Agriculture’s real GDP grew by 4.8% in 2018, lagging slightly behind non-oil GDP growth (6.5%) and down from the more rapid pace of sector expansion in 2017 (6.1%) and 2016 (2.9%). However, growth is expected to rebound. In its 2020 budget, the Ministry of Finance projected agriculture would expand by 6.9% in 2019. As of the second quarter of 2019 the sector was up 3.1% year-on-year; however, given the seasonal nature of the industry, this does not necessarily indicate it will not hit its growth target. Indeed, the livestock and crop segments outpaced broader growth, expanding by 5.7% and 4%, respectively. Conversely, forestry and logging, and fishing, contracted by a respective 6.5% and 2.1% year-on-year over the period.
The sector is also a major contributor to foreign exchange earnings, and an important source of revenue from non-traditional exports (NTE). According to the Ghana Export Promotion Agency (GEPA), non-cocoa agricultural export earnings increased by 34% in 2018 to $591m, compared to $440m in earnings in 2017. Agricultural products made up 21.01% of NTE earnings, an increase on 2017, when they accounted for 17.25%.
Major Staples
In 2018 virtually all of the staple food crops grown in Ghana – namely, maize, millet, rice, sorghum, cassava, cocoyam, plantain, groundnut, cowpea and soya – saw an increase in production. According to the Ministry of Food and Agriculture (MoFA), annual cassava output rose by 9.7% from 19m tonnes in 2017 to 20.8m tonnes in 2018; plantain production was up 9.6% from 4.3m tonnes to 4.7m tonnes; maize output increased by 14.6% from 2m tonnes to 2.3m tonnes; cocoyam production rose by 5.3% from 1.4m tonnes to 1.5m tonnes; and rice output was up 6.5% from 722,000 tonnes to 769,000 tonnes. The only exception to this positive trend was yams, which experienced a 5.6% contraction in production, from 8.3m tonnes to 7.8m tonnes, due to a weaker harvest.
This represents a continuation of overall growth in domestic staple crop production. Indeed, main staple crop output has been trending steadily upward in recent years, with a 6.2% average annual growth in rice output, 5% for cassava and 4.9% for maize since 2014. These consistent increases are made more remarkable by the fact that many crops have seen either a reduction or only a minor increase in the average area planted between the 2013-15 and 2016-18 periods.
Increasing Yields
These figures therefore demonstrate significant improvements in output per ha – a good indicator that programmes targeting the sector, including PFJ, have successfully improved food security and productivity by increasing the availability of inputs such as fertiliser, mechanised tools and better quality seeds. At the same time, they also hint at one of the key constraints for modern crop cultivation in Ghana: a lack of available arable land. This was not always the case, however. Between 1975 and 2013 the percentage of land cultivated for agriculture increased from 13.2% to 32.6%. At the height of agricultural expansion, between 1990 and 2000, Ghana lost an average of 135,000 ha of forest annually – one of the world’s highest deforestation rates at the time. In the current context, more efficient agricultural practices will not only continue to provide opportunities to boost production, but they will also become increasingly necessary to maintain both staple and cash crop production growth targets while the amount of land available levels off or is reduced.
The Alliance for a Green Revolution in Africa (AGRA) estimates that there are still very significant improvements to be made to raise yields of staple crops. Currently, cassava yields an average of 17 tonnes per ha, whereas AGRA estimates the potential yield at 29 tonnes per ha when farmers have access to new and better cassava varieties that exhibit greater tolerance to cassava brown streak and mosaic virus. Similar yield improvements are possible for other crops: AGRA suggests rice yields have the potential to reach as high as 5.5 tonnes per ha, compared to 1.8 tonnes at present; maize could improve from 1.8 to 5.5 tonnes per ha; and yam could conceivably more than double its current yield of 16 tonnes per ha to reach 35 tonnes per ha.
Cocoa
Ghana retains its position as the world’s second-largest cocoa producer after Côte d’Ivoire. Cocoa is the most important export revenue-earning crop for the country, with $2.2bn worth of cocoa beans and cocoa products exported in 2018 and the same projected for 2019. The cocoa industry remains a highly regulated environment. The government-owned Ghana Cocoa Board (COCOBOD) acts as the regulator, price-setter, and sole buyer and marketer of cocoa beans. In this capacity, COCOBOD purchased 811,250 tonnes of cocoa at the end of the 2018/19 crop year, which closed in September 2019. In 2019/20 cocoa production is projected to reach 850,000 tonnes.
Global cocoa prices remained virtually unchanged in 2019 compared to the previous year, at $2312 per tonne. Given these relatively low prices, the government had to forfeit its share of the free-on-board price in export duty payments for the second consecutive year in order to protect cocoa farmers from price volatility. With mounting concerns about cocoa farmers’ ability to maintain a living income and continue cultivating the crop, COCOBOD raised the producer price of cocoa in 2019 from the 2018/19 figure of GHS7600 ($1470) per tonne – or GHS475 ($92.01) per bag – to GHS8240 ($1600) per tonne and GHS515 ($99.76) per bag, representing an increase of 8.42%.
Côte d’Ivoire and Ghana, which together account for more than 60% of global cocoa exports each year, have also taken joint action to gain more power over the global cocoa market. In March 2019 the two countries decided on new standards for cocoa beans, and in June 2019 they reached an agreement on a cocoa floor price of $2600 per tonne. The agreement stipulates that, starting from the 2020/21 season, cocoa buyers will pay an extra $400 per tonne as a living income differential for cocoa farmers to bolster smallholder income.
Poultry & Livestock
As with staple crops, all of the main livestock populations – cattle, pigs, sheep, goats and poultry – recorded production increases in 2018. The pig population saw the largest relative growth, rising by 3.6% from 816,000 in 2017 to 845,000 in 2018. Poultry stock, meanwhile, recorded the smallest increase, up 2% from 75.3m to 76.9m birds – most of which were chickens. In the first and second quarters of 2019 the livestock subsector posted the highest growth of any subsector, at 5.5% and 5.7%, respectively.
The aforementioned RFJ programme was launched in June 2019 with the aim of developing a more competitive and efficient livestock industry that will increase domestic meat production, reduce imports of livestock products and contribute to improving the livelihood of actors in the livestock value chain. Between June and November 2019 the RFJ distributed 7500 improved breeding stock of sheep to 750 farmers in the Upper West, Northern and Oti regions, while 30,000 cockerels were provided to 3000 farmers in the Upper West, Eastern, Ashanti, Northern and Greater Accra regions.
Horticulture
The principal fruits and vegetables cultivated in Ghana are pineapple, citrus, banana, pawpaw, mango, tomato, capsicum, okra, aubergine and onion. Among those, pineapple, mango and banana have been primarily produced for export. Jerry Parkes, CEO of Injaro Investments, which invests in small- and medium-sized enterprises along the agricultural value chain, told OBG that other products with high potential remain undercultivated. “There is a lot of potential for growth in the production of horticultural products, in particular capsicum, ginger and butternut squash.”
In an effort to strengthen horticultural agri-businesses, the MoFA started a Greenhouse Villages programme in Dawhenya in 2017, helping to construct greenhouses and train youth in greenhouse technology so they can set up their own greenhouse businesses. In 2019 a second greenhouse village with a commercial production unit and training centre was completed in Akumadan in the Ashanti Region. The construction of a third greenhouse village facility in Bawjiase in the Central Region was projected to be completed and operational by end of 2019. Each centre is designed to have the capacity to train 90 students.
Bananas
Among Ghana’s horticultural products, banana remains the standout revenue earner. In 2018 exports were up 120.5%, to a value of $85.5m. This follows a trend of consistent growth, starting from $11m in export earnings in 2009. The majority of banana exports have been directed to the EU, where Ghanaian exporters can take advantage of tariff-free and quota-free access. According to GEPA, there are two major exporters and producers of banana in the country – Golden Exotics and Volta River Estates – both of which are located in the Eastern Region. GEPA notes that in many parts of the country, the topographic and climatic conditions are optimal for large-scale cultivation. Côte d’Ivoire and Cameroon are other major banana exporters in the region, producing between four and five times as much as Ghana – a target that may be achievable with sustained development of banana cultivation.
Fisheries
Fish is one of the most important sources of protein in Ghana, providing 60% of protein needs. Annual per capita fish consumption is higher than the global average of 20 kg, at approximately 23 kg. Since 2013 Ghana has relied on marine fish supply, which constitutes an average of 72% of all fish consumption. However, with marine and inland fish production declining by 12%, from 419,181 tonnes in 2017 to 367,868 tonnes in 2018, the Ministry of Fisheries and Aquaculture Development (MoFAD) issued a warning in late 2019 that drastic measures are needed to halt declines in marine fish stock. Without increased monitoring and regulation, such as a planned biometric canoe identification card, the Ministry of Finance warns Ghana could become a net importer of fish by 2025.
Aquaculture
Declining marine and inland fish stock has prompted significant investment in aquaculture. As a result, aquaculture production increased more than 10-fold in 2009-18, from 7500 tonnes to 76,620 tonnes. While this helped fish exports post a gradual increase in recent years, the trend was reversed in 2019 due to an outbreak of disease that devastated fish farms along Lake Volta in March of that year. Aquaculture production plummeted by 32%, though MoFAD has since implemented a series of interventions that are expected to bring production back up to 69,620 tonnes by December 2020. In addition to these emergency measures, MoFAD piloted the Aquaculture for Food and Jobs initiative, which involved training youths in modern aquaculture production methods, and providing extension services to small and medium-sized fish farms. The programme will be extended through 2020 and will be accompanied by the construction of an aquaculture training centre in Dawhenya that year.
Programmes
With the understanding that significant improvements in agricultural productivity are needed to raise real incomes, the government developed the IFJ programme as part of the job-creation focus of the Medium-Term National Development Policy Framework. Its core objective is to modernise the agrifood system through campaigns including the PFJ, the RFJ, PERD, Greenhouse Villages and agricultural mechanisation. Other initiatives that are related to achieving the IFJ’s objectives but are not fully embedded in the programme include One Village, One Dam (1V1D); One District, One Factory; and One District, One Warehouse.
The IFJ’s projected four-year expenditure is GHS9.54bn ($1.9bn), with spending to increase yearly as programmes are rolled out. In 2018 some GHS1.1bn ($213.1m) was spent, of which GHS408m ($79m) was provided by donor partners. The largest share was directed to crop and livestock production and productivity improvement, at GHS530m ($102.7m). In 2019-21 this category is slated to see GHS1bn ($193.7m) in additional investment annually, along with similar spending on mechanisation, irrigation and water management. GHS1.5bn ($290.6m) in donor funds and GHS1.9bn ($368m) in MoFA resources have been secured, leaving a funding gap of GHS6.1bn ($1.2bn) still to be closed.
Technology
Innovations in agricultural technology have begun to address many of the structural challenges that have constrained sector growth, including access to credit. Agriculture in Ghana remains dependent predominantly on smallholder farmers, a key segment that has historically had little to no access to credit, financing and information. This in turn has limited productivity, market access and the ability to scale operations. According to census data from the Ghana Statistical Service, fewer than 2% of rural households had access to finance in 2018, with smallholders having even less access than larger farms. Of the available agricultural credit, the bulk is reserved for input, supply, trading and agro-processing activities in urban areas.
A number of ICT firms have entered the market with products to address some of these limitations. Esoko, Farmerline and AgroCenta, for example, provide market intelligence data to help farmers address the price they face at the point of sale. These platforms also offer weather data and forecasts, farming advice and financial tips. In 2018 Esoko expanded its services to include access to both pensions and insurance.
Underdeveloped insurance offerings have also made it difficult for farmers to manage risk, although here too responses have emerged in recent years, including the Ghana Agricultural Insurance Pool (GAIP). “Insurance is still in a nascent phase, but the GAIP has demonstrated that disease, weather and fire insurance for farmers can be a feasible product to help reduce risk for agri-businesses,” Parkes told OBG (see Insurance chapter).
As agri-tech has demonstrated in other markets, emerging technologies, including artificial intelligence and the internet of things, can aid in crop selection, avoid pest infestations, and address the challenges of high post-harvest losses and climate risk. Remote sensing techniques could also help model the post-harvest decay of products during transport.
Public actors are similarly pursuing digitalisation. In 2019 COCOBOD began developing an integrated cocoa farmer database, with farmers registered biometrically. The project will be completed by end-2020, and the information collected about cocoa activities is expected to help design improved policy interventions.
For now, less sophisticated solutions are having a positive impact, with mobile money helping to facilitate the ease of transactions and mitigate the risk of theft for cocoa farmers (see ICT chapter).
Irrigation
The 1V1D initiative is the government’s main effort to reduce dependence on natural rainfall and allow for year-round farming. Its objective is to provide small-scale irrigation to communities in the north, and switch from a supply-led approach to a demanddriven one. In 2019 the Ghana Irrigation Development Authority completed construction of the 15-ha Piiyiri Irrigation Dam, the 16-ha Guo Irrigation Dam and the first phase of the Mprumem Irrigation Dam. Projects are also under way in Tamne and Mprumem that will allow for a further 375 ha of irrigation farming. Small earth dams for livestock water needs and crop production are similarly being constructed in 14 communities across the Upper West, Upper East, Northern and Savannah regions. In total, some 5000 ha of land is planned to be made available for high-value crops through micro- and small-scale irrigation projects.
Outlook
Increased investment in the agriculture sector as part of the IFJ programme has ensured consistent growth in staple crop production. This trend is set to continue, strengthening food security and providing employment opportunities. With both public and private investment in warehousing, logistics, trade and agri-tech expected to ramp up in 2020, some of the obstacles that have traditionally limited the development of cash crop value chains could be alleviated. This in turn should help accelerate efforts to promote agricultural diversification and ease reliance on cocoa as the dominant export crop (see analysis). However, this is not expected to come at the expense of growth in the cocoa sector, as the recent cooperation between Ghana and Côte d’Ivoire places both nations in a strong position to maintain their chocolate market dominance.
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