Agriculture and Agro-Processing Business

Sector Overview
From Ghana’s total land area of 23.9 million hectares, about 57% is suitable for agricultural purposes. Agriculture contribution to GDP over the years has shown a steady reduction from 35.4% in 2006 to 34.3 in 2007 and to 33.59% in 2008. The growth rate of the sector however doesn‘t show any clear trend. The growth rate reduced from 4.5% in 2006 to 4.3% in 2007 and increased to 5.17% in 2008.

The total volume of processed products exported in 2008 was 14,840,535mt. Products exported during the year included cocoa paste, baby food, wheat flour, tomato paste, dried pepper, groundnut paste, maize flour, yam flour, coconut oil, gari, prepared coffee and dried, smoked and salted fish.

The country is classified into three main agriculture zones. The forest vegetation zone consists of parts of Western, Eastern, Ashanti, Brong-Ahafo and Volta Regions. The northern savannah vegetation zone includes the Upper East, Upper West and Northern Region while the coastal savannah includes mainly the Central, Greater Accra and parts of Volta Region.

The northern savannah zone is the largest agriculture zone. Most of the nation’s supply of rice, millet, sorghum, yam, tomatoes, cattle, sheep, goat and cotton are grown in the region. In recent times, mango and ostrich commercial farms are also gaining footholds in the northern zone.

The coastal savannah is notable for rice, maize, cassava, vegetables, sugar cane, mangos and coconut, as well as livestock. Sweet potato and soybean crops are viable in this agro–ecological zone, under irrigation. The lower part of this zone is drained by River Volta. Together with other streams and lagoons, these water resources present opportunities for fish farming or aquaculture.

In the forest zone where rainfall is plentiful, cocoa, coffee, oil palm, cashew, and rubber are cultivated as is the majority of plantain, banana and citrus supplies crops.

The major strengths of the sector include a diversity of commodities, well-endowed drainage basin, a well-established agricultural research system and a relative proximity to the European market.

The Market
Cocoa has historically been a key economic sector and a major source of export and fiscal earnings. Ghana is the second largest cocoa-growing country in the world. A total export of cocoa for 2009/2010 is 566,761 tonnes, and exports for 2010/2011 are 773,387 tonnes of cocoa was exported generating revenue of US$1,544,370,920. The volume of cocoa processed locally accounted for 124,625,041mt. Ghana processes between 18% and 22 % of its cocoa output into liquor, paste, and butter for export markets, while all other cocoa is exported in its raw state.

The total export of non-traditional Agriculture Products for 2009 was 293,197,463 kg amounting to US $ 150,859,274. The leading non-traditional products were Fresh or chilled tunas, Shea nuts, Cashew, Fresh or chilled fish, yams, Banana and Pineapples. Ghana commands a great share of the African quota of EU market in fruits and vegetables export. Other leading processed agricultural export products were processed tuna, cut fresh pineapples, other prepared fish and tomato paste.

Contribution to National GDP and Growth Rate
Agriculture contribution to GDP over the years has shown a steady reduction from 34.7% in 2007 to 33.59 in 2008 and increased slightly to 34.07% in 2009. The growth rate of the sector however doesn‘t show any clear trend. The growth rate reduced from 4.5% in 2006 to 4.3% in 2007 to 5.14% in 2008 and increased to 6.19% in 2009.

Investment Opportunities
Provision of agricultural inputs such as improved seeds and agrochemicals including fertilizers, pesticides and herbicides, Veterinary drugs, vaccines and chemicals; animal feed and feed ingredients are also required.

Opportunities exist in the processing of agricultural products such as cereals (maize, rice, millet) starchy crops (yam, cassava, Sweet potato, plantain), legumes (carrots, cabbage, garden eggs, tomato), fruits (pineapple, pawpaw, banana, mango), industrial crops (rubber, sugarcane, cotton, oil palm, coconut, cocoa, coffee), livestock (cattle, pigs, poultry, sheep) and fisheries (tuna, tilapia, catfish). Rearing of silk worm for the production of raw silk.

Additionally there is a need for the processing of dairy products as well as the supply of machinery to establish hatcheries for day-old chicks.

Floriculture offers a lot of opportunities as Ghana’s climate and topography make the country suitable for the cultivation of a number of exotic flowers. Species such as heliconia, caribea, celosia, curcuma, gladioli, hibiscus, roses, ornamental palms and ferns perform well under natural conditions. There is potential in the national, regional and European Union markets.

Investment opportunities exist in the agro processing industry to add value, reduce post-harvest losses, promote price stability and expand demand for local agricultural produce, for example, with the processing of cocoa beans into cocoa products and fruits into fruit juices among others. Developing irrigable land through irrigation is another key area. While Ghana has a potential irrigable area of 346,000 hectares, only 10,000 hectares have been developed.

Technological and support services also require investment. Key areas are in the supply and installation of cold chain equipment, packaging and factory building technology In the distribution field, companies are required to provide post-production services in transport, packaging and cold vans.

There are further opportunities in standards, training and certification; capacity building for management and market-oriented enterprises; market intelligence research and in the development of agricultural finance and insurance. Investment opportunities exist in the production of agricultural inputs such as fertilizers, pesticides and fungicides.

Technology and services in the agricultural sector which include irrigation, heavy equipment hiring (i.e. hiring of tractors ploughs, harrows and combine harvesters etc) provide investment opportunities. Investment opportunity also exists in the storage industry. Inadequate and inappropriate storage facilities are constraints to agricultural production thereby contributing to high post-harvest losses and low returns for farmers and processors.

Incentives and Benefits
The business of converting crops, fish or livestock produced in Ghana into edible canned or other packaged products other than in their raw state enjoy a tax holiday of 3 years from commencement of commercial production. Agro-Processing businesses established in Ghana after 1st January 2004 enjoy a five year tax holiday from the date of commencement of business. Companies producing cocoa by-products from coca waste also enjoy 5 years tax holiday from date of commercial production.

Companies engaged in the processing of waste products enjoy 7 years tax holiday from date of commercial production. Incomes from cocoa for cocoa farmers are exempt from income taxes.

The law also permits farming losses to be carried for five years of assessment. There are also further location-based incentives for agro-processing enterprises. Please consult our website for updates on these locations and tax rates. There are exemptions of import duties on imported plant, machinery and equipment.

Tariff incentive – zero rated for agro inputs, plant and machinery. Non-tariff incentive – observation of regulations on import/export of agro products.

Ghana High Commission, New Delhi
Honorary Consulate, Mumbai

Honorary Consulate, Kolkata