Gov’t will consider cocoa sector liberalisation

The government will seriously consider fully liberalising the country’s cocoa sector to significantly augment the crop’s annual production beyond the one million metric tonnes target; Minister designate for Food and Agriculture, Dr Owusu Afriyie Akoto has pledged.
 

“The idea of liberalisation is a good one because ideologically, it is something that in principle that we will look at it as part of the measures we want to take in other to increase cocoa production.

“Cocoa in Ghana is a very sensitive subject. It is a very conservative arrangement that we have from cocoa, so one have to tread very carefully if one wants to change the way things are done. But it is a suggesting which is attractive and something that is worth and considerate and are worthy to increase production,” DrAkoto told Appointments Committee of Parliamentary.

This, he said, is to ensure that the country’s cocoa production level is increased to the level of that of the Ivory Coast within the next four years.

“The challenge is to bring up our production to the level of Ivory Coast," Akoto said, adding that the targets could be achieved within the next four years.

Presently, Ghana Cocoa Board (COCOBOD), the industry regulator supply hybrid seedlings and fertilisers tofarmers.

Ghana’ the world’s second-biggest cocoa producer, produced between 850,000-900,000 metric tonnes for the 2015-16 season that began October -- up from production in the previous season of about 740,000.

 Ramping up cocoa production

Though Ghana has the same land area for cocoa production as the Ivory Coast, Ghana’s total output is half that of our western neighbour and the highest cocoa producer in the world.

Dr Owusu Afriyie Akoto said: “Ghana has the same land area as Cote D’Ivoire regarding cocoa production--1.7million hectares--yet our production is not up to half of that of Cote d’Ivoire. Our production has been about 800,000 metric tonnes, but Coat D’Ivoire’s production has been between 1.6million -1.7million metric tonnes. So it means that their productivity is twice as much as Ghana.”

The poor production, Dr Akoto notes that, is purely down to underinvestment in the cocoa sector. “You cannot based on this statistics, say that the Ghanaian farmer is lazy.

The Ghanaian farmer as I know it is the hard working persons you can find anywhere in the world. The difference between Cote D’Ivoire and Ghana is that public resources are streaming into the cocoa sector compared to Ghana where we have been cutting back. There has been the disinvestment in agriculture.

“All the resources that are required regarding the last eight years when the government of the NDC took over nearly 4 % of a total allocation of a budget was going to the Ministry of Food and Agriculture for agriculture development. That figure has steadily declined to 1.1% in 2014 and 2015,” he added.

 The Member of Parliament for Kwadaso Constituency told the Committee that the Akufo-Addo-led administration would prioritiseagric investment. 

“The government of President Akufo-Addo is determined to make agriculture a priority sector regarding public investment. Already we are attracting the world’s attention due to the policies and what they have heard we want to do with regards to the agric sector.”

Available data from the Ghana Statistical Service (GSS), indicate that agriculture remains the leading employer, employing 44.7% of the workforce compared to 40.9% for the services sector and 14.4% for the industry.

The sector’s contribution to GDP declined from 21.5% in 2014 to 20.2% in 2015. However, it inched up to 24.8 in the third quarter of 2016.

Again, growth in the agricultural sector shrunk from 4.6% in 2014 to 2.5% in 2015.

Professor of Finance and Dean of the University of Ghana Business School, Joshua Abor, recently observed that the sector, though beset by a lot of risks, has a lot of financing opportunities that make business sense.

Leveraging these opportunities, he said, will take a collaborative effort between government, financial institutions, development finance institutions and actors in the agriculture value chain.

“There is the need for capacity-building programmes to strengthen the capacities of agricultural financial institutions and imbue farmers and agric entrepreneurs with the requisite knowledge to make the right financing decisions,” he said.

Given the incentives promised by the new administration, some investors have expressed interest in the sector.

“Last week, a group came from South Africa, I sent them out to the field to Afram plains, to Kintampo and other places and they came back very excited based on the assurances that I gave them that this government is going to support the sector with infrastructure, roads and so on and all that, and they are coming back with a boatload of cattle, young cattle, sheep and goat.

Not only that, people have come from America, they are very interested to invest based on what they have heard that we are doing and determined to do,” Dr Akoto told the Appointments Committee.