Agric’s contribution to economy still on decline


As the country’s economy recorded impressive growth of 8.5 percent in 2017, the highest ever in five years, the sector that has been touted as the economy’s backbone—agriculture—continues to see its contribution to GDP decline.

The sector’s contribution to GDP in 2017 dropped from the 18.9 percent recorded in 2016 to 18.3 percent. The agriculture sector has seen its contribution to the economy drop sharply – from 31.8 percent in 2009 to 18.3 percent last year.

The situation is more disheartening when compared with the other two main sectors of the economy—industry and services.

Industry’s contribution to the economy grew from 24.3 to 25.5 in 2017, while the services sector maintained its dominance by recording 56.8 percent in 2016 and 56.2 percent in 2017.

The situation is even more dispiriting when analysed on quarterly basis, as the agriculture sector contributed 12.7, 12.5, 23.3, and 22.9 percent respectively from the first quarter through to the fourth in 2017.

During the same period, the industrial sector contributed 26.8, 26.5, 24.3, and 24.8 percent respectively, whereas services recorded 60.5, 61, 52.4, and 52.3 percent respectively.

Agriculture’s woeful decline has been largely blamed on the lack of finance from both government and financial institutions to support farmers and investors alike in the sector.

Despite government introducing its flagship Planting for Food and Jobs programme in 2017 to increase investment in the sector and help boost it, its impact—at least from the figures above—shows little was achieved.

The Planting for Food and Jobs programme was bedevilled by the fall army worm invasion, which affected some 113,000 hectares of farmlands and completely destroyed about 15,000 hectares.

Government, however, allocated GH₵1billion to the programme in the 2018 budget. An additional US$39million loan agreement was signed in March this year between government and the African Development Bank (AfDB) to increase investment in the sector.

Again, in the 2018 budget government unveiled what it calls the ‘Marshal Plan for Agriculture’ aimed at revamping the abysmally-performing agriculture sector to make it truly the backbone of the economy.

Some of the initiatives under the plan include registering a total of 500,000 farmers under government’s flagship Planting for Food and Jobs programme, and also recruiting 2,700 extension agents to support it.

Again, government will distribute 200 tractors and matching implements, as well as 1,000 power-tillers and walking tractors to enhance agric-mechanisation.

To address the challenges of irrigation, government will in 2018 continue to facilitate and promote double-cropping by constructing 50 small dams and dugouts – making available an additional 147ha of irrigable land for crop production.

In addition to the aforementioned, the Akufo-Addo Programme for Economic Transformation (AAPET) will establish a GH¢400million fund to de-risk the agriculture and agribusiness sector through sustainable agriculture financing and crop insurance schemes.

The AAPET is aimed at mobilising and leveraging public, private, and public-private partnership investments; modernising and transforming agriculture; and developing major infrastructure projects that support the agricultural zones of the country and industrialisation agenda of government.

It will also support the development of agribusiness start-ups through the establishment of a grant funding facility and abolish duties on some agricultural produce processing equipment and machinery.

Leave a Reply