World Bank values Ghana’s agriculture sector at $12.1bn

Ghana’s agriculture sector, according to the World Bank Group, commanded a total value $12.1 billion in 2019.

According to the Bretton Wood institution, the sector’s contribution to Gross Domestic Product (GDP) for the same year was 17.3 percentage points recording an annual average growth rate of 5.2% between 2017-2020.

Adding that, some 44.7% of the country’s total labour force was employed in the agric sector in the same year.

The increased value of the sector per information contained in the quarterly newsletter of the Ghana Investment Promotion Centre (GIPC), follows several government interventions in the sector aimed at increasing productivity and modernising the sector.

“Between 2017 and 2020 the government has invested about GH₵1.9 billion into the sector under its flagship Planting for Food and Jobs (PFJ) initiative aimed at increasing productivity and modernising the agric sector by providing inputs, improving infrastructure, and strengthening the market structure for the sector,” said the GIPC.

“Taking governments persistent investments into the sector with the aim of attaining self-sufficiency, this sector holds immense opportunities for investment in agric-technology such as greenhouse farming, logistic and infrastructure provision, irrigation schemes, agro-processing as well as marketing,” added the GIPC.

In a related development, the GIPC in its quarterly newsletter attributed the $874 million foreign direct investment recorded for the first half of 2021 to the Ghana CARES programme and the timely roll-out of government incentives amid the pandemic last year, which prompted a quick recovery of the economy.

“Overall, Ghana’s upbeat half year FDI performance has varied marginally from the globally anticipated slowdown in FDI flow. Perhaps unsurprisingly, the steady performance can be attributed to the activation of the Ghana Covid-19 Alleviation and Revitalization of Enterprises program as well as the timely roll-out of several government incentives which prompted a quick recovery of the Ghanaian economy.

“Nonetheless, the United Nations Conference on Trade and Development (UNCTAD), observes that the Covid-19 pandemic has had a significant impact on global FDI flows, as global FDI decreased by a third to $1 trillion in 2020, considerably below the ten-year trough experienced during the global financial crisis.

However, UNCTAD anticipates that Global FDI flows are likely to recover some ground in 2021, with a 10 to 15% growth. But the pace of economic recovery and the probability of pandemic relapses, as well as the possible impact of recovery spending packages on FDI and policy pressures, are all elements that will influence investment prospects.

“As the nation’s lead Investment Promotion Agency, the Ghana Investment Promotion Center remains optimistic about maintaining the upbeat performance while moving forward in a new and innovative way. Furthermore, attracting investments under the Ghana Covid-19 Alleviation and Revitalization of Enterprises (CARES) initiative will continue to be a priority to the GIPC in order to guarantee that Ghana’s economic recovery is inclusive, with benefits flowing to all sectors of the economy,” stated the GIPC.

Of the total $874 million investments, the Foreign Direct Investment (FDI) component amounted to $829.29 million, while the local component accounted for $44.72 million. This is an increase 32.15% over the FDI value of $627.52 million recorded in the first half of 2020

Out of the 122 projects registered, 94 were newly registered projects and 28 were upstream projects.

The total initial capital transfers also amounted to $47.76 million for the first half of 2021.

Sector breakdown of projects

Out of the 122 projects registered, the services sector, with 63 projects, recorded the highest number of projects. It was followed by manufacturing with 24 projects. General Trading and Building and Construction followed with 18 and 6 projects respectively.

The oil and gas sector, as well as export trade sectors, recorded five projects each. The agriculture sector also recorded a project.

In terms of the FDI values, the services sector recorded the largest value of $597.63 million. This was followed by the manufacturing sector with FDI value of $98.74 million.

The general trading, as well as building/construction sectors, recorded FDI values of $41.87 million and $22.63 million respectively.

Employment to be generated

A total of 8,931 jobs are expected to be generated by projects registered with operations at full capacity. 8,091 (90.59%) of these jobs would be for Ghanaians, whilst the remaining 840 (9.41%) will be for non-Ghanaians, per GIPC records.

Registered wholly Ghanaian owned projects

A total of 27 wholly Ghanaian owned projects with total estimated investment amount of $669.64 million were registered for the first half of 2021. These projects were registered for the agriculture, building & construction, general trading, manufacturing and services sectors.

Regional distribution

In terms of regional distribution of the projects registered, nine regions directly benefited from the 122 projects.

96 projects, representing 78.69% of the projects registered, are in the Greater Accra region.

The other regions are the Ashanti and Western regions with eight and nine projects respectively. Bono, Central and Eastern regions registered two projects each and Ahafo, Northern and Upper West with a project each.

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