Honouring the Malabo declaration; Ghana’s quest to increase private sector investment in food and agriculture

Accra, Ghana. Thursday December 13, 2019.

High-level national dialogue

Government of Ghana’s inability to effectively communicate its policies in agriculture to private enterprises has been identified as one of the key reasons accounting for minimal private sector investment in agriculture. 

This was revealed at a high level national dialogue on promoting investments in food and agriculture. The meeting, organized by Food and Agriculture Organization FAO, Ghana’s Ministry of Food and Agriculture MoFA and Alliance for a Green Revolution in Africa AGRA brought together government officials and the private sector to brainstorm on how government and the private sector can work together to increase investment in agriculture. 

Agriculture as the sure means of eradicating poverty and hunger is undisputed, but the needed financing to ensure this is possible remains a huge challenge for Africa. 

2014 in Equatorial Guinea, the African Union Commission met to review and develop specific goals dubbed the Malabo Declaration as a follow up on the Comprehensive Africa Agricultural Development Programme (CAADP) launched in 2003. One of those goals is to enhance investment finance in agriculture. To make this a reality both governments and the private sectors must be committed to invest in agriculture across the value chain.

 “The transformation that is so much desired for the Ghanaian economy can be driven by the agricultural sector through a well-coordinated strategic investment approach were public investments and its associated enablers garners and promotes private investment in multiple folds.” Says Assistant Director General for FAO, Dr Abebe Haile-Gabriel.

Up until 2005 Agriculture was the highest contributor to Ghana’s Gross Domestic Product. Now is 18.9 percent, third on the list after services and industries. Though the growth in the sector has been slow it still employs about 50 percent of the country’s work force making it imperative for a massive investment drive leading to substantial transformation. 

With the advent of Planting for Food and Jobs Ghana is witnessing an infusion of public funds into agriculture like never been seen before according to the Owusu Afriyie Akoto Ghana’s minister for Food and Agriculture. 

The program which initially focuses on bringing improved seeds and fertilizers to farmers at half price is bringing a lot of attention to the agriculture sector and the domestic private sector in particular is being encouraged to cease these opportunities to invest.

The ministry of Food and Agriculture together with the Central Bank of Ghana is also rolling out the Ghana Incentive Based Risk Sharing System for Agricultural Lending (GIRSAL) “to remedy the lower lending to agriculture because of risked and perceived risks linked to agriculture”

Despite these and more interventions by government, the domestic private sector is not convinced. 

They belief government’s initiatives over the years in agriculture have been unsustainable, says Nana Osei Bonsu, CEO of Private Enterprise Federation, “Instead of allowing private sector to do, government is implementing. These are the ones that don’t survive. There is no sustainability in multiple of government interventions over the years.”

 Osei Bonsu is also not pleased with GIRSAL which seeks to protect the lender but not the investor.  

Angela Danson is director of Policy Planning Monitoring and Evaluation Directorate (PPMED) of the Ministry of Food and Agriculture. She says contrary to what the private sector beliefs, PFJ is not directly being implemented by the Ministry of Food and Agriculture. She says the distribution of seeds and fertilizer under the program is a partnership with private seed and agrochemical companies. National Buffer Stock Company is also a private enterprise focused on providing storage and market access under PFJ she says.

Danson explained that Planting for Export and Rural Development (PERD) and the greenhouse villages’ project will all eventually be handed over to the private sector.

“These are some of the interventions that we are doing…and I want to stress again that it is the demand pool that these interventions are trying to create and once the demand is created and opportunity opens up government will find and exit strategy” She says.

Among the private sector’s concerns about investing in food and agriculture were uncontrollable risks such as unpredictable climate and low yields, difficulties in land acquisition for long term investment, rigid regulatory environment, the absence of accurate data to help with strategy. There are also the lack of technology innovations to attract the youth and the domestic private sector’s lack of long term financial pool. 

For effective partnership to be achieved going forward the private sector was urged to coordinate their activities so they can engage government effectively.

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