Ghana: Food, agric-related items imports reach $2bn
Food and other agriculture related items reached $2bn in 2019, a report by CUTS Ghana has revealed – available data indicates that, imports of food and agriculture related items for 2021, was roughly $1.9bn.
The report titled “Improving Framework Conditions to Unlock the Potential of AfCFTA for SMEs in Ghana,” makes a critical assessment of the readiness and competitiveness of Ghanaian SMEs for the African Continental Free Trade Area (AfCFTA) agreement.
Per the report, Ghana remains a major importer of food and agricultural products with the high imports being accounted for by the underdeveloped nature of the country’s agriculture sector particularly the food processing sub-sector to meet increasing demands.
Agriculture products mostly imported are consumer ready commodities such as wheat, sugar, rice and poultry.
Globally, the top ten leasing exporters of agriculture and its related products to Ghana include Vietnam, China, USA, Belgium, Canada, Malaysia, Russia, Thailand and the UK.
The agriculture sector remains one of the important sectors in the Ghanaian economy. It employs about 44.7 per cent of the total labour force, providing employment for Ghana’s youthful and growing population.
The sector is made up of small-scale rain-fed crop and livestock farming systems with average farm size of less than 1.2 ha, accounting for about 80 per cent of total
agricultural production.
The strategic role of the agricultural sector as the backbone and driver of the economy has been recognised through government initiatives to increase investment in food and agricultural production. Initiatives embarked upon includes Planting for Food and Jobs, Youth in Agriculture, the Agriculture Engineering policy, the 2018-2021 Ghana Agricultural Investment Plan, One District, One Factory among others.
The agriculture sector grew from 2.9 per cent in 2016 to 6.1 per cent in 2017, recording a growth of 4.8 per cent in 2018 and 4.6 per cent in 2019. The sector averaged at 4.5 per cent in the first three quarters of 2020 relative to 2019 during the same period.
The sector’s performance in 2020 was boosted by the crop, fishing and livestock. The production of crops within the sector has increased over the years mainly driven by smallholder farmers, but this is marked with poor extension services, aging farmers and lack of finance for investment in better inputs.
Meanwhile, Egypt, South Africa and Morocco are said to pose the most threat to Ghana in markets in which it has the greatest exports potential under the African Continental Free Trade Area (AfCFTA) agreement.
This is because, these countries also have great export potential in nearly all of Ghana’s export potential markets and are even exporting more than Ghana in these markets.
Ghana’s greatest export potential under AfCFTA, lies in the exports of malt extract with the country projected to earn some $77.6m.
This is followed by palm oil and fractions, uncooked pasta and plain woven, all projected to earn Ghana $60.8m, $34.1m and $28.1m respectively.
Aside the aforementioned products, cocoa processing, horticulture products, fresh and processed fish, cashew nuts, natural rubber, yam, medicinal plants and professional services have also been found to be great potential for Ghana’s export diversification agenda of its non-traditional exports under the AfCFTA.
“Egypt, South Africa and Morocco pose the most threat to Ghana in markets where Ghana has the most export potential because these countries have export potential in nearly all of Ghana’s potential markets and are even exporting more than Ghana.
“In terms of competitiveness at the macro level, Ghana performs poorly in the doing business score as it currently ranks 118 out of 190 countries with most of its African peers such as Kenya, Cote d’Ivoire, Rwanda, Egypt and South Africa ranked higher. This means that the Ghanaian regulatory environment is not conducive to global trade unlike in other African countries,” stated the report.
“Ghanaian SMEs are weaker in the national environment and immediate business environment capabilities to compete, connect and to change. Survey results show that Ghanaian SMEs lack unique products, have unreliable access to electricity and ICT, incur high finance cost and few are internationally certified. Most SMEs are also challenged by institutional, legal and regulatory frameworks.
“For Ghanaian SMEs to take advantage of the AfCFTA therefore, much effort needs to be put in place to diversify or add value to their exports. Similarly, there is the need to work assiduously to improve upon the competitiveness levels of Ghanaian businesses, which takes collective efforts both from the government through providing the enabling business environment while SMEs work on their internal mechanisms,” added the report.
