INVESTMENT OPPORTUNITIES IN GHANAS AGRICULTURE

NATIONAL INVESTMENT FORUM

HON. ERNEST A. DEBRAH, MINISTER FOR FOOD AND AGRICULTURE PRESENTS INVESTMENT OPPORTUNITIES IN GHANAS AGRICULTURE SECTOR

ORDER OF PRESENTATION
Agriculture in Ghana Government Policies Agricultural Policies Investment opportunities in agriculture Doing Business in Ghana Advantages for locating in Ghana

1. AGRICULTURE IN GHANA
The agricultural sector is almost exclusively represented by smallholder activity farming on plots of less than 1.5 hectares. Productivity is generally low by international standards because of prevailing traditional low-input, shifting cultivation farming systems. The productivity of crops is also volatile because it is largely dependent on erratic rainfall.

AGRICULTURE IN GHANA cont.

Within its wide range of agro-ecological zones, where opportunities for both improved water management and irrigation exists, agriculture in Ghana possesses many natural advantages. Application of existing technologies to smallholder systems would significantly increase unit area yields for all crops.

AGRICULTURE IN GHANA cont.

There is need for the emergence of medium and large-scale agricultural enterprises financed by the private sector to transform agriculture into a highly productive and efficient sector, capable of achieving and sustaining a 6% annual growth rate over the medium term. This is crucial if broad-based agricultural growth capable of reducing poverty and accelerating economic growth is to be realised.

Land use in agriculture

Item Total Land Area Agricultural Land Area Agric. Land Under Cultivation Cultivated Area Under Irrigation Area Under Inland Waters Other Hectares 23,853,900 13,628,179 5,300,000 19,000 1,100,000 9,125,721 % 100.00 57.10 38.90 0.36 4.60 38.30

Agro-ecological zones
5 main agro-ecological zones Rain forest Deciduous forest Transitional zone Coastal savannah and Northern savannah

Agriculture in the Ghanaian economy

Dominant sector in the Ghanaian economy Employs about 60% of the labour force Contributes about 40% to GDP Accounts for over 57% of foreign exchange earnings. - Major Agro Exports Cocoa Timber and wood products Horticultural crops (Pineapple, Pawpaw, Mango, Vegetables, etc) Tuna

Agricultural sub-sectors
The sector is made up of 5 sub-sectors Cocoa Crops other than cocoa Livestock Fisheries Forestry

The non cocoa crop sub-sector

Cereals maize, rice, sorghum, millet Legumes and pulses cowpea, groundnut, beans Root and tuber cassava, yam, cocoyam, sweet potato Industrial crops cotton, oil palm, rubber, coconut Horticultural crops pineapple, mango, citrus, chilli pepper, tomatoes, other fruits and vegetables Other crops plantain, banana, ginger, etc.

Livestock sub-sector
Poultry Chicken, Guinea fowl, Duck, Ostrich Pigs Small Ruminants Sheep and Goats, Grasscutter, Rabbit Large Ruminants Cattle

Characteristics and challenges of agriculture in Ghana

Production is predominantly rain-fed Sector dominated by smallholders Smallholder farmers produce about 80% of the total agricultural production in the country Low level of technology High post harvest loses

Characteristics and challenges of agriculture in Ghana Cont.

Low value addition Women are the predominant producers of the annual crops Insufficient flow of institutional credit Inadequate supply and distribution of inputs Inadequate storage and marketing facilities Low synergy among sub-sectors of agriculture hence opportunities new industries

2. GOVERNMENT POLICIES
A series of comprehensive macro economic reforms and structural adjustment over the last few decades to move the country from a controlled system to a liberalized and free market economy. Removal of subsidies on agricultural inputs Privatization of the distribution of agricultural inputs De-regulation of the exchange rate among others Revision of the investment code to allow increased investment by the private sector.

3. AGRICULTURAL POLICIES
Overall national goal Ghana to attain a middle income status with a per capita income of US$1,000 by the year 2015 within a decentralized and democratic environment. Achievement of the national goal requires the agricultural sector to lead the process through accelerated growth.

Strategy
Modernizing agriculture through mechanization, irrigation and use of improved technologies Key objectives Food security Agricultural raw materials for industry Agricultural commodities for export Increased contribution to GDP

Public goods to be contributed by government

Irrigation facilities Improved rural infrastructure Support to research Strengthening extension services delivery Strengthening research-extensionfarmer linkage

4. TRADE AND INVESTMENT OPPORTUNITIES IN ARICULTURE

Support services Increasing the density of agric mechanization services in production areas Increasing the provision of post harvest facilities including processing Instituting standards and training for local production of tools and implements Support in and capacity building for farm business and agribusiness management and market-oriented enterprises Market intelligence research

Support services cont. Upgrading extension skills in cash crop orientation Developing appropriate agricultural financial lending packages Building stronger associations Developing industry rules and regulations Value addition to primary production Segment the agricultural sector and champion national drive to encourage corporate and individuals to invest in the sector

The crop sub-sector

Development of a strong and sustainable staple food sector responding to local and regional demand for maize, yams, cassava, cowpea and traditional vegetables. Production and marketing of horticultural products in the national, regional and European Union (EU) markets. Vast potential for significant development in the value-added and processing sectors to complement fresh production of cocoa, oilpalm, citrus, mango, cashew, cotton and coconut. Development of private irrigation facilities.

The crop sub-sector continued Production and distribution of improved seeds, planting materials and agro-chemicals (fertilizer, pesticides, weedicides)

Production of all crops, particularly rice, mango, pineapple, chillies, Asian vegatebles, tomatoes, cashew

Value addition/processing of all crops, particularly cocoa, cassava, sweet potato, tomato, pineapple, mango, maize, soybean

The horticulture industry

Supply and installation of cold chain equipment Supply of packaging material Post production services (transport, packaging, cold vans) Joint ventures Organizing small-holders into out-grower systems for production and marketing Capacity building on standards, training and certification.

The livestock sub-sector

Production and distribution of Veterinary drugs, vaccines and chemicals, feed and feed ingredients Establishment of Hatcheries for day-old chicks Breeding programmes for high quality animals Cut meat and processed meat Processing of dairy products

5. DOING BUSINESS IN GHANA AGRICULTURE

Investment Incentives
Tariffs/Non-tariffs Tariff Zero rated for agro inputs, plant and machinery Non-Tariff Observation of regulations on import/export of agro-products

Income Tax Incentives

Corporate tax 8% tax on income from export of non-traditional agro-products Tax holiday Depends on type of venture

Location Incentives Agro-processing enterprises that use local agricultural raw materials as the main input shall have corporate tax rates based on location Accra-Tema - 20% Other Regional Capitals - 10% Outside Regional Capitals - 0% Investment Guarantee Free transferability of capital, profits and dividends

Government Land Banks Government is identifying and classifying lands into Land Banks. These would be available to prospective investors depending upon their choices of location and the types of enterprises they intend to undertake.

6.Advantages for locating in Ghana

A stable political environment A sound macroeconmic policy 100% foreign ownership permitted A large Economic Community of West African States (ECOWAS) market (250 million people) Good and ever improving physical infrastructure

Advantages continued
Availability of skilled and trainable labour Competitive labour cost Quota-free access to USA and European Union markets Proximity to European Union (6hours flight time) and USA 9hours direct flight time Developed financial infrastructure Warm and friendly people

THANK YOU