Among the many overlapping crises that the world currently grapples with, the hike in global food prices caused by the Russia-Ukraine war has threatened food security and halted global efforts to end hunger.
According to World Bank data, about one billion people worldwide are unable to afford a meal since onset of the Ukraine crisis, which has consequently caused a considerable increase in food prices.
I imagine that one of the various ways to manage prevailing hikes of global food prices is to scale up food production in order to strengthen food security; but in our part of the world, how do we go through with this when our agricultural sector seems to begin and end with farming?
It is not enough to farm…
Reflecting on an article by Sophie Edwards on ‘Why Food Funding can’t just focus on farming’, here is my perspective based on experience in international trade and business development, with specific reference to Ghana.
To begin, the food value chain in Ghana has generally evolved over time, giving more opportunities for value addition. However, I find that in spite of the potential in Ghana’s food value chain, areas such as food processing and packaging are currently not being harnessed enough – due to a number of pertinent reasons including low investment capital and insufficient level of financial and technical support to smallholder farmers.
From my interaction with foreign investors, the common denominator of Ghana’s under-utilised agricultural sector is mostly a lack of strong motivation to increase investment – due in part to the nature of doing business in the country, and the latter’s poor and unstable macroeconomic performance…. which has been further aggravated by the recent Russia-Ukraine conflict and COVID-19 pandemic.
According to the World Bank Doing Business database, Ghana’s doing business score decreased from 60.4 in 2019 to 60.0 in 2020, representing a change of 0.4 percent. This average score represents the challenges associated with doing business in the country. These challenges range from starting a business, securing construction permits, property registration and getting electricity, just to mention a few.
The low investment capital in Ghana has greatly impacted the food value chain, with relatively more focus on farming and little to no motivation for value addition. This is unfortunate, because tapping into the area of value addition through food processing and packaging could go a long way in ensuring national food security and improved economic growth and development.
How can we progress?
While regulations governing foreign direct investment need to be adequately enforced, there is a need to capitalise on digitalisation to streamline processes for doing business in order to boost investor confidence.
Capitalising on global partnerships between the public and private sector will also help mobilise private finance and capital to increase the flow of foreign direct investments into the country.
Moreover, bilateral and multilateral trade negotiations with Exim banks should be strengthened, in order to come up with strategies and investment solutions that create an attractive environment for foreign direct investment in Ghana.
Finally, what better way to improve the country’s food value chain than to scale packaging production? It is common knowledge that most entrepreneurs dealing in consumer goods often import packaging solutions from China; but what if we can invest in the sustainable production of packaging in Ghana to make food production more affordable?
This will ultimately reduce imports and go a long way to ensure food affordability.
Sophie Edwards was right about this: we are losing a lot of money by not exploring the food processing and packaging sectors of the food value chain in Ghana; both in terms of government’s expenditure on imports and the untapped financial returns caused by inadequately harnessing the full potential of Ghana’s food value chain.
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