An assessment conducted by the Development Bank Ghana (DBG) has unveilled that achieving food security in the country demands a total financing of US$1.04billion over a five-year period. This funding is earmarked for the comprehensive reform of four pivotal food value chains: namely the rice, soya, maize and poultry sectors.
On a positive note, US$686million of the required amount has been identified, leaving a financing gap of US$354million. The bank’s ‘mapping the value chain’ initiative determined that the funding will come from over 13 development partners operating within these sectors.
As part of this financial strategy, the Ghana Commodity Exchange (GCX) is projected to need seed capital of approximately US$200million to implement the proposed reforms. Dr. Kwabena Opuni-Frimpong, DBG’s Chief Economist and Head-Economic Research Department, emphasised the significance of this substantial amount, stating: “DBG acknowledges that it cannot guarantee or provide the entire sum independently”.
Dr. Opuni-Frimpong further outlined the bank’s collaborative approach, noting: “A promising avenue lies in collaborating with equity funders in the country, as has been done in Nigeria. The private sector, encompassing individuals and entities, is actively engaged in such initiatives. Exploring potential Equity Partners in Ghana could further bolster the financial backing required. Notably, government involvement is pivotal considering the national security implications associated with food production”.
The urgency of addressing food security concerns in Ghana was highlighted, with Dr. Opuni-Frimpong noting that DBG may explore ways to support GCX after internal deliberation. He emphasised the collaborative effort as essential to addressing the national security threat posed by food scarcity.
Food imports contribute significantly to Ghana’s food inflation, making food security a critical issue, as evidenced by the country’s 83rd ranking on the Global Food Security Index in 2022. Recognising the importance of concerted efforts, DBG expressed commitment to finding solutions and supporting GCX in overcoming challenges.
The outcomes of DBG’s workshops were classified into five main areas: mapping the value chain; identifying SMEs for DBG and its partners’ pipeline; policy and regulatory reforms; financing; and implementation. The bank has established six main pillars under the ‘implementation’ category, covering production-related recommendations, aggregation, warehousing, storage and trading, agro-processing, policy advocacy, capacity building, technical assistance and studies.
In alignment with DBG’s 5-year strategic plan, the bank and its key partners undertook deliberate efforts – including multi-stakeholder workshops – to address market failures in critical food supply chains of maize, soya, poultry and rice. DBG’s overarching goal is to seek consensus with stakeholders and partners for effective implementation, contributing to national growth and transformation.
