Ghana is 65 years old and congratulations to all Ghanaians. 65 years is such a long time for the existence of any entity. Over the years, Ghana has seen progress in its economic, social, religious, cultural, and indeed all aspects of national life. However, situated in the context of the COVID-19 pandemic, the nation’s economy is going through considerable challenges. The three major sectors of the economy are Agriculture, Industry and the Services sector. It is worthy of note that among the three sectors of the economy, the agriculture sector is often described as the backbone of the nation’s economy. But the question that still begs answers is, how has the sector as the backbone been positioned so that its full potential can be realised, after 65 years of independence?
2.0 Contribution of Agriculture to the economy of Ghana
Since independence, the Agriculture sector has been acknowledged as the mainstay of the economy. Therefore, it goes without saying that the sector is significant to the socio-economic development of the country in many ways.
Firstly, the contribution of agriculture to the GDP of Ghana is the third highest. Though the sector’s share of GDP has dwindled over the years, its contribution cannot be overemphasised. For instance, according to data available from the Ghana Statistical Service(GSS), as shown in the figure below, the share of agriculture to the country’s GDP has decreased from 50% by the 1970s to about 20% in 2021. Thus currently the share of the sector is 1/5th of the size of the GDP. The decline has been largely attributed to an increase in the shares of the services and the industry sectors of the economy.
Fig 1 Sectoral contributions to the GDP; Source: Sourced from National Accounts of GSS
Similarly, Agriculture is an important sector in relation to providing employment in the country. It currently is the second-largest employer, employing over 30 per cent of the nations labour force as shown in the figure below.
Fig 2: Share of employment by sector: Source https://www.statista.com/statistics/447530/employment-by-economic-sector-in-ghana/
The sector is important in ensuring the macro-economic stability of the country particularly with respect to inflation and foreign exchange rates. The Ghana Statistical Service indicates that inflation currently stands at 15.3 per cent of which food inflation, which is mainly driven by the agriculture sector constitutes about 17.4 per cent. In the same vein, the sector is an important contributor to the foreign exchange earnings of the country. Particularly, Cocoa has been a key major foreign exchange earner to the Ghanaian economy over the years. In recent times the rise in non-traditional export (NTE) such as Cashew, Shea nuts/butter among others is further strengthening the contribution of the sector to improving the foreign exchange earnings of the country.
3.0 Challenges confronting the sector
Despite efforts by successive governments since independence to improve the sector, there is still a huge potential that remains untapped. The level of contributions to the economic development of Ghana as well as its huge potential remains largely untapped because of several constraints.
A major challenge confronting the sector is low productivity and output. For instance, even though the sector’s share of GDP has declined to 20 per cent, there has not been a corresponding decline in the number of people employed in the sector.
Furthermore, access to water has been a major constraint when it comes to the improved performance of the sector. The Food and Agriculture Organisation (FAO) estimates that Ghana’s potential irrigable land amounts to 1.9 million hectares. This potential, however, remains largely undeveloped. Only 1.6 per cent, or 31,000 hectares is under fully controlled irrigation – one of the lowest percentages in Africa. ( FAO, Facts Sheet on Ghana).
Access and usage of critical inputs is another constraint in the sector. Key farm inputs such as fertiliser, seed and chemicals are still a major challenge to many farmers. Particularly farmers in the rural communities have difficulties accessing these inputs. Though the usage of certified seed, fertiliser and other chemicals has seen increases, sustaining such remains a challenge. For instance, fertiliser has seen a surge in prices owing to what’s happening in the global market for the product. The current disruption in the supply of these essential inputs at the global level if not well well addressed could pose serious challenges to the farmers. There are still bottlenecks in distributing subsidized inputs to farmers, especially those in the rural communities, women, youth and persons with disabilities(PWDs).
Another area of concern is Mechanisation. The need for mechanisation in the farming process is of prime importance. Therefore, there is a need to increase access to mechanisation services to improve farming in the country. Ghana’s Agriculture policy is hinged on a modernised agriculture culminating in a structurally transformed economy and creating jobs. The various mechanisation centres in the districts need to be well resourced and made to function properly.
Another issue is access to affordable credit which is the most critical issue when it comes to access to funds for farming purposes. Many farmers in Ghana, particularly smallholder farmers, struggle to access credit for farming. In instances where they get these credits, the interest rates are prohibitive. Given the risks associated with the sector, many financial institutions shy aware from lending to the sector.
Another major challenge is government commitment to the agriculture sector. The Malabo declaration as well as the comprehensive Africa Agriculture Development Programme(CADEP) demands that African countries invest about 10% of their national GDPs into Agriculture. African governments were also to grow their agricultural GDPs by at least 6 per cent per anum by the year 2025. Over the years these targets have not been met.
4.0 Recommendations and Way-forward
Therefore, as a way forward there is the need for serious steps to be taken to ensure that the sector is contributing to the development of Ghana. To this end, the following steps are being proposed for consideration by the Government.
The first step is the strengthening of farmer group organisations. Over the years the concept of farmer cooperatives has not been well utilised. If well organised, farmer cooperatives have the potential to address some of the shortfalls in the sector. To this end, there is the need for the Government to resource the department of cooperatives which will, in turn, strengthen farmer groups across the country to improve their access to essential services as well as their productivity.
The second step is massive investment in the sector by both the Government and private sector. There are serious shortfalls in infrastructure for irrigation, post-harvest technology, roads network for agricultural purposes. Which calls for more public investment in the sector. Going by the Malabo declaration, the government should be spending a minimum of 10 per cent of the national budget on the agriculture sector.
Also, there is a need to improve productivity in the sector in research and development. The levels of support to the research bodies needs to be increased. In this regard, it is desirable the various polytechnics and agriculture training colleges are well resourced to find appropriate solutions to the many challenges that smallholder farmers face. There is a need for intensification of the introduction of scientific methods in farming. These improvements would contribute to ensuring that what is produced meets both local and international standards.
Finally, there is the need to create the needed market for the produce, thanks to the emergence of the African Continental Free Trade Area( ACFTA). Earlier schemes like the ECOWAS Trade Liberalisation Scheme( ETLS), have shown that an Africa-wide market is no longer a pipe dream. It is important to guard against foreign imports which compete with the local produce whilst leveraging on this big market that is open for the Ghanaian agricultural produce.
In conclusion, since independence, Ghana’s Agriculture has seen progress. However, there is the need to modernise the sector radically. The sector holds the potential to leapfrog the economy of the country. With the right commitment from all actors: government, private sector, donors among others, Ghana has the potential not only to be self-sufficient in food production but to feed the entire sub-region and drive the socio-economic development of the nation.
Source: Emmanuel Wullo Wullingdool
Policy Advocate and Consultant: Agriculture, International Trade, and Investment