Ghana’s 1 District, 1 Factory (1D1F) initiative, the primary economic development program under President Akufo-Addo, is greatly pushing for increased production of cash crops in attempts to reach the goal of having total exports valuing USD 10 billion by 2020. While small in comparison to Ghana’s primary cash crops of cocoa, nuts, and tomatoes, 1D1F is placing greater focus on the avocado market, as unprecedented world demand has been making this green fruit gold.
Despite not being a primary agriculture focus in the past, Ghana is nonetheless still moderately established in the avocado market. Ghana is the 35th largest global producer of avocados, producing over 9,000 tons in 2016. Ghana is the 12th largest producing country in Africa; Kenya is the largest African producer.
After observation of the profitability of this market, the Ghana EXIM Bank has allocated funds of GHS 44.3M for the establishment of a 500 hectare avocado plantation in the Suhum District. This investment is projected to create 3,000-5,000 jobs, direct and indirect, and result in a revenue of GHS 575 Million. The majority of avocado plantations in Ghana are located in the southwest regions of the state.
Along with the plantation, this investment also covers the creation of a processing plant for both domestic markets and export.
Prior to this investment, only approximately 2,000 hectares were devoted to avocado agriculture in Ghana, almost exclusively farmed small scale. Despite this, production rates were still increasing notably. From 2012-2017, Ghana’s avocado production has increased by 6.74%.
The profitability of this market is greatly due to the spike in the trendiness of avocados in countries such as the United States, whose avocado consumption per capita has increased by over 400% in the past 20 years. As demand has been increasing faster than supply, the world price of avocados has been increasing dramatically. For the year 2017, in certain parts of the world, the wholesale price of avocados increased by over 125%.
Production increases have been worldwide, attempting to supply the ever-growing demand. In just 15 years, the total world imported quantity of avocados leaped from 315,262 tons in 2001 to 1,913,875 tons in 2016. The top global producers are Mexico, Dominican Republic, and Peru, which collectively account for over half the annual global market value.
Avocado production can be a problematic process as erratic rainfall patterns and droughts caused by climate change have presented significant challenges to many growers. Other issues are that trees may also take up to 5 years before producing fruit and that like all primary commodities, they are subject higher world price volatility.
The avocado market is as an excellent place to place investments and spur growth. Ghana’s climate is well suited for increased production and with the current global market, it can prove very profitability, especially if trends continue in mass consuming countries
By: Andrew David (Intern)
