Agric takes centre-stage

Dr. Joe Abbey, Executive Director, Center for Policy Analysis, has warned government to pay critical attention to the manufacturing and agricultural sectors as the focus may shift towards the oil and gas sector.

“There are signs that all is not well for the country’s agricultural and manufacturing sectors, and that when we enter the oil economy they will lose their performance.”

Current data released from the GSS estimates economic growth rate of 5.9 percent in 2010, compared to government’s end-of-year target of a 6.5 percent growth-rate.

However, officials of the Ministry of Food and Agriculture (MOFA) are optimistic that government’s interventions in the agricultural sector are landmark concepts aimed at revamping the agricultural sector, considered as the mainstay of the economy.

Speaking to the B&FT, the officials said: “government's interventions in the agricultural sector coupled with the level of food production going on nationwide, indicate that the country is on course to revamp the agricultural sector - which is the main driver of the economy.”

Government increased budgetary allocation for the Youth-In-Agriculture programme by 500 percent, raising the amount from GH¢10 million in 2009 to GH¢60 million this year.

This is to encourage medium and large-scale food production among the youth, especially in areas of comparative advantage, to triple food production within the next three years.

Government has also established agriculture mechanisation centres throughout the country to assist in the acquisition of tractors at affordable rates for groups and individual farmers to maximise production.

The Ministry is as well embarking on extensive production of rice and maize in some strategic locations in the country.

To this end, an amount of GH¢3.6 million has been provisioned to support the procurement of machinery and equipment to support farmers who are into rice production.

Farmers who are into the production of crops such as maize, rice, sorghum and soya beans in seven regions of the country - namely Northern, Ashanti, Brong-Ahafo, Central, Volta, Upper East and Upper West - are also benefitting from the budgetary allocation. Fourteen thousand hectares of land are expected to be cultivated under this initiative.

Additionally, approximately 41 dams are being rehabilitated in the three Northern Regions to support dry-season farming.

The agriculture sector, which recorded the lowest growth of 1.2 percentage points below targetted growth of 6.0 percent, relinquished its position as the largest contributor to the economy from a share of 36.5 percent to 35.6 percent of total Gross Domestic Products (GDP).

The relatively low growth of the sector can be explained by the downward review of the crops and livestock subsector from the targetted 7.0 percent to 5.0 percent.

The manufacturing sector, too, shows marginal growth after its negative growth in 2009. The provisional growth estimate is one percent for the sub-sector.

The figures state that the services sector contributed 36.1 percent to GDP, compared to 35.6 percent by the agriculture sector. Industry’s contribution was 28.3 percent, but however recorded the highest growth of 7 percent - better than the 6.1 percent growth of the services sector and 4.8 percent recorded by the agric sector.

“This review took into account actual data for the first half of 2010, which are extrapolated to cover the whole year. Provisional estimates therefore give the expected performance of the economy at the end of the year by annualising actual data for some months of the year,” the GSS stated in its release.

Performance of the sectors

Industry
The overall growth of the industrial sector is 7.0 percent and it contributed 28.3% to GDP. The mining and quarrying sub-sector grew more than projected (10.5%), with all the minerals recording positive growth.

Manufacturing shows marginal growth after its negative growth in 2009. Provisional growth estimate is 1% for the subsector.

Electricity production and distribution increased by 17.7%, whilst Water production and distribution grew by 3.3%, yielding an overall subsector growth of 13.3 %.

The source of increase in electricity production was from a 9.2% growth in hydro-generation and 38.3% increase in the output of the thermal generators.

Exports of electricity for the first half of 2010 constituted 11.5% of total production. Also, road and building construction activities are on the increase - showing a provisional growth of 7.9%.

Services
From the provisional estimates, this sector has the largest share in GDP (36.1%) - displacing agriculture as the largest contributor to GDP. Growth of the sector is 6.1%.

The Finance, Insurance, Real Estate and Business Services sub-sector recorded the highest growth of 13.9%. Of the activities in the sub-sector, Business service activities (consultancy and other professional services) recorded the highest growth (38.7%).

All the other sub-sectors in the Services sector had reductions in growth compared to projected growth figures. The largest drop in growth can be found in the Wholesale, Retail Trade and Hotels and Restaurants sub-sector. The provisional growth is 3.5% compared to the projected growth of 8.0%. Transport and Communication sub-sector growth has not been revised due to the delay in data response.

Agriculture
The sector recorded the lowest growth, 1.2 percentage points below targetted growth of 6.0%.
The sector relinquished its position as the largest contributor to the economy from a share of 36.5% to 35.6% of total GDP (at factor cost).

The relatively low growth of the sector can be explained by the downward review of crops and livestock sub-sector from the targetted 7.0% to 5.0%.