More investment required to reverse agric’s declining contribution to GDP

Recently the economy recorded one of its most impressive growth rates in recent times (8.5%) last year, which is the highest in five years. However, agriculture, considered the backbone of the economy, continues to see its contribution to GDP decline – and that is worrying.

The sector’s contribution to GDP last year dropped from the 18.9 percent recorded in 2016 to 18.3 percent. A senior Global Markets researcher at the Rand Merchant Bank believes government needs to diversify investments in order to grow the economy’s size as well as strengthen it.

In her estimation, agriculture deserves more attention than it is currently getting if it is to contribute more to GDP. Her analysis is based on the fact that the Ghanaian economy has a comparative advantage in the agriculture sector, but all the focus seems to be now in the oil and gas industry.

Since the discovery of oil in 2010 some modest gains have been chalked up, but we need to diversify into areas like agriculture since not much has been attention has been given it. Government, through its ‘Planting for Food and Jobs’ programme, intends to increase investments in the agriculture sector, but the first year of implementation was bedevilled by the fall army worm infestation.

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This year, the programme is being expanded to involve 500,000 farmers and the results are expected be more positive. Like the researcher notes, a massive injection of capital and viewing agriculture as a business rather than for subsistence would see a greater contribution of the sector to GDP – and this is where focus is needed.

Modernising agricultural production to increase farm yields is one of the salient objectives of the PFJ programme, and value addition is another key objective to complement agro-industrialisation to ensure better prices for producers.

We are hopeful that the programmes being rolled out will soon see a transformed agriculture landscape with such programmes like developing and upgrading irrigation facilities in the north of the country, where agriculture is a mainstay.

The question of market is key when there are efforts at increasing agriculture productivity because post-harvest losses amount to almost half of overall production, and this requires storage facilities like warehouses and silos.

The Buffer Stock Company also suffers from lacking warehousing facilities across the country to make its role effective, since it is charged with mopping-up excess stock and offering farmers market-value prices. In fact, there are opportunities for investments along the agriculture value chain, and these must be exploited.

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