An agricultural economist at the University of Ghana, Dr Kwadwo Tutu, is worried that the country’s declining agricultural sector poses serious threat to economic development.
Economic growth, he explained, would be stunted with a structure that had agriculture’s share of Gross Domestic Product (GDP) declining from 50 per cent about a decade ago to 19 per cent in 2015.
“If the share has gone down so much and service sector has increased from 20 per cent to over 50 per cent, then we are a ‘kwashiorkor’ economy because basic development theory will tell you that you first grow with agriculture and when productivity goes up, it transfers into manufacturing before services sector comes in. Now suddenly, agric is primitive and clearly it is not a priority and that is dangerous,” he said at a post budget analysis forum in Accra.
The Ministry of Finance (MoF) and the Institute of Financial and Economic Journalists (IFEJ), organised the forum aimed at giving media and civil society organisations some perspectives on the budget statement.
State of agriculture
Agriculture grew at -0.1 per cent between April and June 2015. Data from the Ghana Statistical Services (GSS) on the contribution of the various sectors to GDP for the second quarter of 2015 shows that the services sector maintained the lead in its contribution to GDP, 59.6 per cent and was seconded by industry, 29.6 per cent. Agriculture contributed 10.6 per cent.
The GDP measures the value of final goods and services produced in the country. Developing Ghana’s agricultural sector has generated debate since the 2016 budget was presented.
In the 2016 budget, an amount of GH¢501.5 million has been allocated for the implementation of programmes and activities in the agriculture sector. Out of this, GH¢322.1 million is Government of Ghana (GoG) funding, GH¢4.1 million is internally generated funds and GH¢175 million is from development partners.
Development constraints
According to Dr Tutu, the lack of a national long term development strategy had contributed to the decline of the agric sector, saying that it was only such a plan that would inform the kind of share the economy would have in the next 10 years.
“So now if you have an aggregate of several projects and at the end of it you say rice is going to grow this much, what tells you the kind of growth that you are expecting from agric is going to fit into a plan which in the next 20 years will give you what you want. So we are like somebody in an ocean without a compass,” he said.
Dr Tutu said Ghana was developing under energy and attitudes (incompetence, mediocrity, inefficiency, indiscipline and corruption) constraints that were borne out of lack of enforcement of law and order, and which translated into the achievements of budget targets.
“Unless these are addressed all that we are talking about is useless because there is no way you can hold what you put in the budget as real,” he said.
He said it was important that Ghana took a critical look at production and productivity, storage and marketing, processing and technology.
“The vision of agric is using science and technology to modernise agriculture. For instance, what proportion of cocoa is being processed to know if it is increasing our processing capacity or not. These things we don’t find it in the budget and unless we do that, we get a congregation of programmes and projects and outputs which doesn’t tell us where we are going, whether we are making progress or not,” he said.
Mechanisation
A Principal Agriculture Engineer at the Ministry of Agriculture, Ms Catherine Amegatcher, said the reduction in budget allocation was a worrying trend.
She said efforts by the ministry over the years to source funding to procure machinery for farmers along the entire value chain had been a challenge.
“One of the things that the ministry is trying to do now is to promote mechanisation and machinery. This is one key thing that is necessary but as we speak now, some of these things are not possible because funding has not been available because the entire allocation has been slashed,” she said.
She said though in a rudimentary stage, plans were advanced to make mechanisation services available to farmers, especially those who could not afford to buy machinery.
The ministry, she said, had instituted Agriculture Mechanisation Service Enterprise Centres (AMSECs) in all the 216 districts, where there would be a range of machinery to cover the whole value chain – starting from land preparation to harvesting.
At the moment, there are 89 of such centres in 62 districts.
A Director at the Real Sector Division at the MoF, Dr Oku Afari, said agriculture was basically a private sector affair so government’s role was to facilitate and create the right environment for it to thrive. GB
Pull Quote
The lack of a national long term development strategy had contributed to the decline of the agric sector.
Key Note
Experts have said that government should make it mandatory for banks in the country to set aside a proportion of their assets to support the growth of the agricultural sector.
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