Ghana’s future millionaires and billionaires will not come from the oil and gas industry. They will be drawn from the agricultural industry. This is why Ghana must approach agriculture as a business rather than a way of life. Nobody drinks oil or smokes gas, but everyone consumes food. Consequently, our universities must expand their focus beyond agricultural science to include agriculture as a business.
The agribusiness sector in Ghana is a major driver of the country’s economy. According to statistics from Ministry of Food and Agriculture, the sector contributes almost 54% of Ghana’s Gross Domestic Product (GDP) and employs over 60% of the working population.
Agribusiness, simply put, refers to the business of agricultural production. It encompasses a variety of activities, including farming, seed supply, agrichemicals, farm machinery, wholesale and distribution, processing, marketing, and retail sales. In Ghana, this sector is crucial, not just for food supply but for the nation’s economic health in general.
“Agriculture has the coolest jobs in the world. Africa’s agribusiness will be $1 trillion by 2030. So, food is critical and that is what Ghana and other African countries have a comparative advantage in,” Akinwuni Adesina, President of Africa Development Bank has stated.
Currently worth over $313bn, an increase investment in the sector will bring jobs to lift millions out of poverty; most stomachs will be filled with nutritious meals, Ghana’s agricultural exports will dominate global markets, and the country’s farmers, who have borne the brunt of harsh economic conditions, will get a new lease of life as they become competitive in the global marketplace.
This is not an unreachable dreamland. A World Bank report published in 2018 argued that it could soon be a reality. The report, Growing Africa: Unlocking the Potential of Agribusiness, projects that African agribusiness including that of Ghana could be worth $1trillion by 2030. It is the latest in a string of positive reports about the country’s socio-economic development prospects, despite economic challenges. Ghana and Senegal are forging ahead with rice production. The World Bank says Ghana’s agribusiness sector is not just important for the sake of Africa but “essential for ensuring global food security.”
No magic wand
But no magic wand will cause a $313bn agribusiness sector to grow into a $1trillion behemoth. The World Bank cautions that everyone will have to work hard – governments, the private sector, farmers, and so on. However, the elements for a pole-vault jump are in place. For example, in addition to huge, untapped water resources, Ghana has more than 50% of the world’s fertile and unused land – that’s a whopping 450m hectares. Ghana uses only 2% of its renewable water resources, while the global average is 5%. The steady and increasing private sector interest in Ghana’s agribusiness is just the icing on the cake. Also, while global prices of agricultural commodities are rising due to increasing demand, supply of these commodities is slowing due to factors like land degradation and water scarcity in many communities.
“Water scarcity has become a major constraint because of competition from rapidly growing industrial sectors and urban populations,” states the Word Bank.
The World Bank report rigorously highlights many stubborn and recurring obstacles in the path of development progress. It states that “to generate the jobs, incomes and food so badly needed for Ghana’s growing population over the next 20 years, agro industries need to undergo a structural transformation”, and it calls for more concerted investment in the sector.
Infrastructural needs
Ghana’ agribusiness desperately needs improved infrastructure. Overcoming these infrastructure challenges is paramount to boosting productivity, reducing post-harvest losses, and ultimately improving the livelihoods of the farmers and the nation at large.
“Infrastructure is a high priority for jump starting agribusiness. Best bets for infrastructure are irrigation, roads, and markets,” according to the World Bank report.
The inability to efficiently move goods from farms to markets due to poor road networks and inefficient public transport systems has been a significant challenge, post-harvest losses are rampant due to inadequate storage facilities, lack of access to reliable electricity, impeding production and processing of agricultural products, among others are some of the challenges facing the agricultural sector in Ghana.
In 2010, for instance, Ghana, together with other Africa produced 1,300kg of cereals per hectare of arable land, which was about half of what South Asia produced per hectare, according to the World Bank. A major reason for that low production is African countries’ low percentage of irrigated arable land, only 3% on average compared to a 47% average for Asian countries, states the Food and Agriculture Organisation. On top of that, a lack of rural roads impedes farmers’ access to markets and increases post-harvest losses.
Although increased financing is needed in the agribusiness sector, there have been improvements lately. Even so, only 7% of Ghana’s agriculture comes from foreign direct investments, compared to 78% for Asia countries such as India. The good news is that due to rising commodity prices, “the appetite is growing among investors, private equity, and investment and sovereign funds to tap into Ghana’s agriculture and agribusiness markets”.
Partially because of the lack of infrastructure and investment, Ghana with its fertile land spends $33bn on food imports annually, including $3.5bn on rice imports. Gone are those years, in the early 1990s, when sub-Saharan country was a net exporter of agricultural products. Currently, imports are as much as 30% greater than exports.
It is astonishing that developing countries such as Brazil, Indonesia and Thailand export more food products than all sub-Saharan Africa combined including Ghana. The value of agricultural exports from Thailand (a country of 66m people) now exceeds that of all sub-Saharan Africa (a region of 800m people) including Ghana.
This situation is not sustainable, says Gaiv Tata, the World Bank director for financial and private sector development in Africa.
“Ghanaian farmers and businesses must be empowered through good policies, increased public and private investments and strong public-private partnerships.”
More investments needed
It is not as if Ghanaian leaders need any convincing about the need for more investments in agriculture, but more actions must match their words. In 2003, the New Partnership for Africa’s Development (NEPAD), an African Union framework for the continent’s socioeconomic development, launched the Comprehensive Africa Agriculture Development Programme (CAADP) “to eliminate hunger and reduce poverty through agriculture”. By signing on to CAADP, Ghana and most African governments agreed to invest at least 10% of their national budgets in agriculture and to raise agricultural productivity by at least 6%. Through CAADP, Africa is slowly but steadily moving forward. Countries such as Ghana, Ethiopia, Rwanda and others have placed agriculture at the top of their development priorities list.
Martin Bwalya, the head of CAADP, says that over the past years, Ghana and other 40 countries have either signed the compact or finalised investment plans while 13 others have yet to sign up to CAADP. However, the NEPAD report highlights that just nine out of Africa’s 54 countries have since 2014 met the target of 10% of budget allocation, while another group of nine are currently spending between 5% and 10%. Ghana missed the target, according to the report.
To commemorate 10 years of CAADP, African leaders declared 2014 the year of agriculture and food security in Africa. With African agriculture growing at 4%, the leaders hope to build on that momentum in the coming years. Even these modest gains are commendable, analysts believe. They are a “strong contrast to what many acknowledge to be inadequate or even nonexistent national strategies that previously governed Africa’s agricultural sector”, according to the Brookings Institution, a Washington-based think tank.
Hennie van der Merwe, CEO of the South Africa-based Agribusiness Development Corporation, adds that “Ghana and other African nations are currently experiencing a revival in terms of its focus on agribusiness, not only to increase food self-sufficiency, but also to create jobs and economic activity, specifically in rural areas”.
The World Bank concurs: “Côte d’Ivoire, Kenya and Zimbabwe all have been successful exporters in terms of market share… Ethiopia, Ghana, Mozambique and Zambia stand out as African success stories in terms of significant increases in export market shares since 1991.”
Land problems
Political commitment and investment aside, another lingering problem is land allocation and acquisition. Farmers in many Ghanaian communities cannot expand their farming because they have limited access to land, and discriminatory laws sometimes prevent women from gaining ownership. The World Bank report addresses the need for judicious and equitable land allocations, stressing that such allocations shouldn’t threaten people’s livelihoods.
Land purchases also need to follow ethical standards. For example, buyers should pay fair market rates after consultation with local communities.
“Governments and investors must also put in place effective environmental and social safeguards to reduce potential risks of agribusiness investments, especially those associated with large-scale land acquisitions by investors,” the Oakland Institute, a US-based think tank institute advised.
Taking the ICT route
Experts generally agree that technology, particularly information and communication technology (ICT), will boost agriculture. In an earlier report titled ICT for Agriculture in Africa, the World Bank listed ways in which ICT could support agriculture at every stage: pre-cultivation (crop and land selection, access to credit, etc.) crop cultivation and harvesting (land preparation, management of water, fertiliser and pest control, etc.) and post-harvest (marketing, transportation, packaging, food processing, etc.). Geographical information systems can be used for land-use planning and climate change adaptation, for example, the Bank stated. Already farmers in Ghana, Kenya and Zimbabwe have deployed ICT in ways that have increased their income and productivity.
Decades ago, farming in Ghana was primarily an occupation of trial and error. The introduction of ICT, however, has drastically changed farmers’ approach to agribusiness. Today, technology permeates every facet of farming operations, from crop planting to harvesting, processing, and marketing.
With the ubiquity of mobile phones in Ghana, farmers can now access vital agricultural information anytime and anywhere. They receive weather forecasts, market prices, and farming tips via text messages or mobile applications. In addition, the internet offers farmers a wealth of resources, including access to online training programs and global agricultural trends. This connectivity helps farmers make informed decisions and stay competitive. Furthermore, satellite imagery and GPS technology enable farmers to monitor crop health, manage resources efficiently, and improve yield.
“The use of ICT in agriculture has opened up a world of opportunities for farmers in Ghana. Technology has become an indispensable tool in the modern farmer’s toolbox.” – Philip Abayori, a Ghana Agric Chamber President has stated.
In Kenya, farmers are also using ICT in other ways: to share new production processing and marketing skills; to trace mangoes via a system that connect farmers to global consumers; to garner important information that improves forest governance, among others.
Agribusiness is a booming industry teeming with vast opportunities for those willing to roll up their sleeves and dig in. In essence, it’s about how agricultural products are produced and distributed.
There’s a revolution happening in the world of agribusiness, and it’s being driven by two things: artificial intelligence (AI) and big data. AI and big data are more than just buzzwords. They are technologies that have the potential to transform the way we farm, making agribusiness more efficient, effective, and environmentally friendly. AI can help farmers make precise decisions about planting, fertilising, and harvesting. It can analyse soil conditions, predict weather patterns, and even help in pest and disease detection. On the other hand, big data is all about making sense of the massive amounts of information we now have at our fingertips. For agribusiness, this is a game-changer. Big data can help identify patterns and trends that would be impossible for a human to spot.
Such is the importance of technology to agriculture that recently the International Fund for Agricultural Development, the UN agency dedicated to poverty eradication in developing countries, called for policy innovations to make technology the main driver of African agriculture. There is still some distance to cover to realise the dream of a $1trillion agribusiness.
