Introduction & Background of Ghana’s agricultural sector
Ghana’s economy is the 4th and 7th biggest in West Africa and Africa respectively. Agriculture is a major contributor to Ghana’s economy with over 60 percent of the Ghanaian population employed directly or indirectly through agriculture. The Northern part of the country alone is endowed with 6.1 million of arable land. There are several rivers and other water bodies to support all year agricultural activities in Ghana.
Current productivity is low; the current production of maize, soya and rice are estimated at 1.5, 0.8 and 2.4 metric tons/hectare respectively, as against the potential production of these crops however is estimated at 5.5, 4.5 and 6.5 MT respectively. This is largely due to rain fed and small scale agricultural activities. Under improved water and land management conditions, these gaps can be closed. Transformation in Ghana’s agricultural landscape will require investments in modernized technological systems with focus on the entire value chain.
Statistics of food production gaps
The current rate/volumes of food importation are opportunities for investments in Ghana’s agricultural sector:
- Ghana currently spends about US$600m annually to import rice
- US$400m annually to import sugar, tomatoes etc
- The importation of vegetables is estimated at $85m annually.
- $ 5 M dollars for onion importation to Ghana from Burkina & Niger
- The market for soy is about 300,000 MT to 400,000 MT whilst the local production is less than 100,000 MT.
- Growing demand for sorghum and maize in the brewery industry.
Agricultural Value Chain Opportunities
- Rice – market opportunity worth over $600m
- Soya- Local demand for soy is 400,000 MT, less than 100,000 MT produced in view of growing demand from poultry industry
- Onions & Tomatoes- tomato and onion supply gap of 201 511 MT worth $110m
- Groundnuts- Market gap of 177 355 MT worth $320m
- Certified seeds- Supply gap of 44 639 MT of improved seeds worth $ 8m
- Barley & Maize- Potential due to growing market and brewery industry
- Sorghum- Growing market demand in view of its usage among local breweries
- Sheanut – growing demand in Asia and Europe
- Coconut- abundant in southern Ghana, and huge demand for coconut products in Europe
NB: These figures were obtained from organizations and projects including
- Financing Ghana Agriculture Project
- Market Development for Northern Ghana
- Conservation Alliance International
Non Production Investment Opportunities
- The focus here will be on logistics aimed at linking agricultural production areas in Northern to southern Ghana.
- Target crops are those of import substitution value
- The overall logistics market gap is valued at $157m
- Transportation or fleet management, maintenance, and warehousing activities
- Market gap of 23 550 tractors worth a market of over $ 800 m
Investment returns on selected value chain opportunities
- Tractor market- 36% within 5 years
- Groundnuts- 32% within 5 years
- Certified seeds- 33% within 5 years
- Rice- 58% within 5 years
- Logistics- 40% within 5 years
- Tomatoes and onions- 52% within 5 years