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Article - November 14, 2014

Of all the investment opportunities available right now in Africa, agribusiness offers one of the most dramatic examples of how development can spread prosperity and improve the quality of people’s lives.

The World Bank estimates that Africa’s food markets could create $1 trillion of business opportunities by the year 2030. Food production, which currently accounts for more than 50 per cent of the continent’s total economic activity, could triple with access to more capital, technology and modern farming techniques, according to the World Bank’s figures. The continent holds nearly half of the world’s total area of fertile uncultivated land, some 450 million hectares that are not forested, protected, or densely populated, it estimates.

Ghana, a country blessed with an extraordinarily conducive climate and an abundance of fertile land, encapsulates this transformative potential. Already the world’s second-largest source of cocoa and a significant producer of rice, cassava, peanuts and corn, Ghana is currently seeking financing for a variety of agribusiness projects, including a $6 million fertilizer production plant, a $6 million rice storage warehouse and dozens of similar initiatives.

“More than 67 per cent of our workforce is in agriculture and more than 60 per cent of household income of lower income groups is spent on purchasing food. So benefits from investments in agriculture and agro-processing are more readily distributed among society,” explains Michael Abu Sakara Foster, Executive Chairman of Sakfos Holdings, adding that this “makes it a natural place to start to begin pushing investments that favour empowerment of our youth in order to make it a dividend for our economy and Ghana in the future.”

Ghana has also received significant support and financing from multilateral institutions like the World Bank, which is currently implementing the five-year, $100 million Ghana Commercial Agriculture Project (GCAP).

The benefits of developing local agriculture can be seen in the output from some of Ghana’s best-known food brands. “We make every effort where we can to utilize local raw materials and ingredients for our products, be it through local farmers or local suppliers,” says Anthony Grendon, Managing Director of Accra Brewery Ltd (ABL). “The more we develop this opportunity the more we grow the symbiotic relationship.”

“Developing agribusiness helps to develop the rest of the economy and we have committed to do so through local material sourcing of inputs for our products,” adds Peter Ndegwa, Managing Director of Guinness Ghana Breweries. “Two years ago we had a very high import content of about 90 per cent; we have moved this down to 60 per cent through dedicated focus on our intent. In the long term our goal is to have our products made from 60-70 per cent local content.” Producing these kinds of locally sourced products can have a major impact across Ghana’s agricultural sector, officials say.  “Currently Ghana exports raw materials, we need to shift that paradigm in order to add value and create more jobs,” says Joe Tackie, CEO of the Office of the President’s Private Sector Development Strategy II. “The government is very important in this sense as it provides the right environment.”  

A glimpse of how this process is impacting the country can be seen in emerging sub-sectors. “We have programmes to work hand in hand with the private sector,” says Clement Kofi Humado, Former Minister of Food and Agriculture. “The agro-industry is coming up. The processing of nuts, of cereals and the like, is now catching up. There are also a lot of financial services developing around agriculture.”

The establishment of the National Commodities Exchange, meanwhile, will help Ghana tap into opportunities in the region and help open up its markets to the world. “The creation of the exchange will be a game-changer, adds Mr Tackie. “It will position Ghana as a hub and a crop centre in West Africa.”