Fertliser subsidy under threat

Even before the poor targeting challenge is resolved, the Fertilizer Subsidy Programme (FSP) is facing uncertainties in funding. Ama Amankwah Baafi reports

The sustainability of the Fertiliser Subsidy Programme (FSP) initiated in 2008 to help farmers increase fertiliser usage and productivity is under threat, following uncertainties over financing if the current World Bank support for the programme dries up.

With the support of the World Bank, the government has steadily increased subsidies on fertilisers from a little over 43,000 tonnes at GH¢20 million in 2008 to 173,000 tonnes at GH¢117 million in 2012. A total of 180,000 tonnes is expected to be subsidised this year for farmers.

Although the volumes of fertiliser seem to be rising by the year, they are still insufficient, as more people go into farming with existing farmers using more fertiliser.

The Ministry of Food and Agriculture, which responsible for the implementation, however, does not have its entire budget request to ensure that the fertiliser subsidies are carried out fully.

This is mainly because the dedicated donor funds had not been disbursed, leaving the cost for the whole of last year’s subsidies in arrears.

Only 39 per cent of the MoFA’s budget was approved in the 2013 budget, thus making it difficult to undertake certain programmes.

Thus the budget deficit the government runs has led to perennial shortage of subsidised fertiliser and this is gravely affecting food crop farmers, particularly in the Upper East and Upper West regions of Ghana, according to the Peasant Farmers Association of Ghana (PFAG).

To compound issues, a World Bank facility under which the FSP is being funded would soon end and calls are being made for alternative funding. The bank has announced a shift in focus of its funding for the government.

Each programme funding would be results-based and the World Bank would therefore conduct a sector review before committing funds. The next review is expected next year.

The Deputy Director in charge of Budget at the Ministry of Food and Agriculture, Mr Daniel Ohemeng Boateng, said fertiliser suppliers had not been paid since last year and this may be impacting on supply. 

“We want government to set aside a separate fund to manage the FSP if it is to be sustained,” he said at a two-day advocacy programme on the 2013 budget statement and the expectations for 2014 in Accra.

The Institute of Financial and Economic Journalists (IFEJ) organised the forum with support from STAR Ghana, an advocacy grant organisation. It was to afford civil society organisations, stakeholders and the media the opportunity to provide inputs in addressing Ghana’s economic challenges assess the government’s adopted approach in managing challenges and offer suggestions on the way forward for the 2014 fiscal year.   

The President of the National Farmers Award Winners Association, Mr Philip Abayori, said if the fertiliser subsidy was having the desired impact then food should have been cheaper, but the situation on the ground was different.

The deviation, he said, could be as a result of poor targeting of the subsidy, as they subsidised products either fell in wrong hands or persons colluded with suppliers to divert the product.

Mr Abayori reiterated calls for the inclusion of farmers who are the targeted beneficiaries of the programme, saying it was unimaginable for policy makers to make and implement policies without consulting the targeted beneficiaries.

“Though there is the FSP, farmers have never attended any meeting on it. Why are we farmers not on the FSP committee. We only hear and buy from suppliers,” he said.

The PFAG has said fertiliser was a key determinant of high crop yields, for that reason, as part of efforts to ensure the country became food secure, farmers’ access to fertilisers should be of interest to all.

It had on several platforms called for certain taxes to be dedicated to improving agricultural productivity, particularly the FSP.

The association said the areas to tax should include three per cent of bank’s profit; a percentage of Value Added Tax (VAT), Communications Services Tax, contributions from lottery revenue and a percentage of oil and gas revenue.

The Programme Coordinator, Ms Victoria Adongo told the GRAPHIC BUSINES in a separate interview that the farmers found it difficult to plant at the appropriate time and complained bitterly. 

Due to the artificial shortage by some dealers the subsidised product could sell at a higher price of GH¢60 instead of about GH¢51, whereas in the open market unsubsidised fertiliser such as NPK sells between GH¢68 and GH¢70.

Smuggling across our borders also contributes to the shortage because our neighbours do not subsidise fertiliser and so these unpatriotic citizens get better money from their activities.

This came to light when STAR Ghana sponsored some IFEJ-member journalists to ascertain the impact of budget statements and implementation on communities in the hinterland.

The PFAG has also asked for strict enforcement of the law against smuggling and punishment for persons caught trying to smuggle fertiliser outside the country. 

In the 2013 Budget Statement and Economic Policy, the continuous introduction of technology to improve agricultural production remained the main focus of government policy interventions.

These interventions include the adoption of livestock production technologies, agricultural mechanisation, irrigation development, fertiliser subsidy, seed improvement, quality standardisation, and the implementation of modern buffer stock management techniques.

Under the fertiliser and seed subsidy programme in 2012, 300, 000 farmers benefitted from 170,000 metric tonnes (mt) of fertiliser and 20, 000 kg of improved seeds of maize, rice and soyabean.

According to the budget, for the 2013 financial year, the Ministry of Agriculture will continue with its mandate to implement programmes and projects in the Medium Term Agricultural Sector Investment Plan (METASIP).

It said government would also coordinate the procurement and distribution of In addition to the 180, 000 tonnes of subsidised fertiliser expected to be distributed to farmers this year, MoFA also plans to launch a web-based software for the smooth implementation and management of the subsidy. GB

Writer’s email: ama.baafi@graphic.com.gh
    

Climate change puts Ghana's agric at risk

Ghana may be worst hit by the impact of Climate Change (CC) if adequate measures are not adopted to contain the brunt, according to a report by the Environmental Protection Agency.

The report cautioned that the current low yields than projected being experienced in the agric sector had been attributed to the effects of climate change.

It warned that yields in the agric sector are expected to further decrease, which may likely affect the vulnerable and the poor.

The report termed the Policy Advice Series 2 highlights the negative effects of climate change on the agricultural sector in Ghana.

The UN Framework Convention on Climate Change (UNFCCC), in Article 1, defines climate change as: ‘A change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods’.

Historical data for Ghana from the year 1961 to 2000 clearly shows a progressive rise in temperature and decrease in annual rainfall. In Ghana, CC is manifested through rising temperatures, declining rainfall totals and increased variability, rising sea levels and high incidence of weather extremes and disasters such as flash floods (Minia et al. 2004).

Agriculture accounts for about one-third of Gross Domestic Product (GDP); 28.3 per cent (2011 est.) and employs more than half of the workforce, mainly small landholders. The sector grew by 2.8 per cent against a target of 5.3 per cent in 2011 (2012 Budget).

Irregular rainfall pattern is a feature of CC with particularly damaging consequences, such as droughts and flood and these are predicted to get worse over time.

According to the EPA Policy Advice Series, which have been developed to enhance understanding and appreciation of CC and disaster risk issues, by policy makers and senior technocrats and to support them to take urgent and needed decisions, agriculture and food security are interrelated and thus, CC induced unsustainable livelihoods will result in negative consequences on food security, poverty, health, education, gender equality and environmental degradation.

Agricultural production’s dependence on rainfall is a significant hindrance to the developments of the sector in Ghana. The use of irrigation to counter the effects of poor rainfall is particularly low across the country.

Agriculture is highly sensitive to temperature and rainfall and yields are plummeting and will continue to do so. Major challenges in the agricultural sector include low crop yields, over dependence on inconsistent rainfall, unsustainable agricultural practices, low knowledge of use technology and sustainable utilisation of the natural resource base, mostly due to poverty levels among farmers.

CC impacts are reduced soil fertility due to changes in precipitation (rainfall) and temperature, rainfall deficits resulting in desertification of grazing pastures and reduced water availability for animals and shifts in agro-ecological zones that are too rapid for trees and farming systems to adapt to.

Others are incidents of pest attacks resulting from an increased temperature, loss of cropland from erosion and desertification, coastal erosion and destruction of valuable coastal agricultural land.

Earlier this month, about 5,200 acres of rice farms in the Ketu-North District of the Volta region were invaded by army worms and caused massive destruction to crops. The farms included 1,200 acre Afife Irrigation Project Farm and another 3,000 acres of rain fed private farms located in the Kpli Valley at Klenomadi. A total of 2,524 farmers risked losing their livelihood but for the timely intervention of the Regional Directorate of Agriculture that commenced spraying to prevent the spread of the army worm invasion in the district.

In 2003 Ghana signed the Maputo Declaration of African countries allocating 10 per cent of national budgetary resources to develop the agricultural sector. The spending on agricultural research and development in Ghana doubled between 2000 and 2008, from GH¢151 billion to GH¢352 billion respectively, but most went towards an increased outlay for salaries (75 to 83 per cent).

All planning in the agricultural sector is aligned with the Food and Agricultural Sector Development Policy (FASDEP 11) which seeks to address the challenges of the agricultural sector.

However, impacts of CC have not been factored in any of the six policy objectives, though agriculture is highly sensitive to temperature and rainfall. For instance, objective one targets production and post harvest losses but does not account for the potential increase in vulnerability of the poor due to the unpredictable climate change conditions.

The EPA Policy Series 2 recommended that more urgently, impacts of CC need to be quickly factored into the sector plan so that additional funding can be sourced for CC adaptation measures in the country.

Nevertheless, government’s outlook for food and agriculture in 2012 as stated in the budget is to expand the Agriculture Subsidy Programme to include liquid fertilizers (bio-fertilizer) and improved seeds. The Ministry will subsidize 165,000 metric tonnes of chemical and liquid fertilizer.

“The National Food Buffer Stock Company will acquire another rice mill with a capacity of about 8.5 metric tonnes per hour, to be located in the Northern Region where rice production has been increasing for the past 3 years. In line with the national policy of stocking food for a better Ghana, at least 10,000 metric tonnes each of maize and milled rice, as well as 1,000 metric tonnes of soya beans will be stocked at all times,” Minister of Finance, Dr. Kwabena Duffuor announced.

Recently, the Minister of Food and Agriculture, Mr Kwesi Ahwoi announced that government had sourced an amount of US$145 million from the World Bank and the United States Agency for the implementation of the Ghana Commercial Agricultural Project (GCAP) to address food security in the country.

He said by the end of the project in 2017, Ghana would be able to produce enough rice to feed itself and also become the bread basket for West African sub-region. GB

Peels for profit

A study on the range of agricultural waste, (cassava and yam) solutions in Ghana has revealed cassava peels can be used as alternative substrate for cultivating quality mushrooms. Samuel Doe Ablordeppey and Ama Amankwah Baafi have been studying the report and write 

Unlike the mushrooms that are only collected from the wild in forest regions during the wet season; March-September, cultivated mushrooms are available all year round.

But researchers say the availability of wild mushrooms is being threatened as a result of high rate of bush burning, deforestation and over-exploitation of timber and non-timber forest products in Ghana.

Therefore, the potential use of cassava peels as a supplement (and not a complete replacer) of mushroom cultivation is promising. Mushroom has high nutritive and medicinal value. It is a rich source of proteins, minerals and vitamins.

Gradually, there is a shift from overdependence on consumption of wild mushrooms that are collected to the consumption of cultivated mushrooms in Ghana. This presents enormous opportunities for mushroom growers, subsequently cassava farmers.

The opportunities include; growing demand for value added organic products, especially, in the food services industry like hotels and restaurants; opportunities for public-private partnerships in establishing large mushroom farms and cultivation of mushrooms for export.

There is also a growing health consciousness of consumers; increased processing sites and therefore opportunities exist for bulk volumes of peels at processing concentration sites; and employment generation opportunities.

Again, it will augment government policies and focus on agri-business and entrepreneurial development as engines of economic growth.

The study on the agricultural waste solutions was conducted by the Food Research Institute (FRI) of the Council for Scientific and Industrial Research (CSIR), under the Gains from Losses of Root and Tuber Crops (GRATITUDE) project, in collaboration with the Natural Resources Institute (NRI, UK), to reduce physical and economic losses of yam and cassava.

GRATITUDE, a four-year European Union (EU) funded project in Ghana, Nigeria and Vietnam, also seeks to add value to the tubers by processing them into other forms of finished and preserveable products.

One of the key focuses of GRATITUDE which is on the theme, “Reducing Post-Harvest Losses for Increased Security”, is improved utilisation of wastes (peels, liquid waste) to produce products for human consumption such as snacks, production of mushrooms and improved animal feed.

Although there are different types of substrates available for mushroom cultivation in Ghana, the use of sawdust is the most popular but has several limitations, including unavailability due to rapid deforestation, inaccessibility, high cost of transporting sawdust from wood processing sites and longer periods of composting.

Cassava (Manihot esculenta) is cultivated in all the agro-ecological zones in Ghana due to its tolerance to pests and disease and resilient to harsh climatic conditions.

Total production of cassava was estimated at 14.3, 13.5 and 12.2 million tonnes in 2011, 2010 and 2009 respectively. Over 90 per cent of farmers in Ghana cultivate cassava, a major staple food in Ghana with per capita consumption of approximately 153 kilogrammes per annum (MoFA-SRID 2011).

About 50 per cent of cassava that is produced is utilised fresh while the rest are processed into various products including gari (25 per cent), agbelima (18 per cent) and kokonte (five per cent) and (one per cent) industrial purpose (Adjekum, 2006 and Onumah et al., 2008).

Yam production estimates for 2009, 2010 and 2011 were 5.7, 5.96 and 5.85 million tonnes respectively. Its production is concentrated in the Brong Ahafo and the Northern Regions. Last year, Ghana exported approximately 27,000 metric tonnes of yam (MoFA-SRID, 2012).

The GRATITUDE study primarily, focuses on where waste are generated along the value chain (transportation and storage) and the ability to collect in large quantities from the processing points, either at the household level, village level or factory / industrial level. Insignificant proportion of peels generated at processing level are utilised for animal feed.

The survey findings show that over 90 per cent of the peels generated were either burnt or just left unattended to at dumping sites. Extraction of starch from liquid waste was limited.

In the case of yams, wastes are mostly generated at the consumption (households, chopbars and food vendors) levels since yam processing is very limited, only done by few small and medium enterprises (SMEs).

Yam peels constitute about 14 per cent of the volumes of yams consumed in Ghana and approximately, five per cent of volumes of yams traded go waste. However, the study proved bulking of yam waste at the household level will involve a lot of work; therefore, it makes economic sense to concentrate effort now on the potential use of cassava waste (particularly peels).

It recommended that cassava peels could be composited before using for the cultivation of mushrooms and even after the production of mushrooms, the spent substrate, which is rich in nutrients can be used for the preparation of animal feed (poultry and small ruminants) and bio-fertilizers for crop cultivation (Chang 1997).

Mushrooms thus have the capacity to convert nutritionally valueless substances into high protein foods (Hafiz et al 2003). Form the study four different methods of mushroom cultivation in Ghana were identified; (i) traditional method (ii) the high bed method (iii) the low bed method and (iv)the plastic bag method.

Currently number of mushroom growers in Ghana is estimated at 2500 and they are mostly concentrated in Greater Accra (close to 50 per cent), Brong Ahafo, Ashanti, Eastern, Volta, Western and the Central Regions of Ghana. Mushroom growers in Ghana can be categorised into micro, small and medium (highly commercial) scale growers.

Some of the growers produce and sell fresh mushrooms only, others sell both fresh mushrooms and compost bags while others sell fresh, dried as well as value added mushroom products.

In Ghana, mushrooms for food may be cooked fresh after harvesting, dried before utilising for food preparations and milled mushroom used for shito. At least 50 per cent of Ghanaian households consume mushroom (Apetorgbor et al., (2005).

The same study showed that approximately 41 per cent consume mushrooms due to the taste, 20 per cent due to availability and 12 per cent for medicinal purposes.

Other consumers use mushrooms as delicacies in soups and stews. Some mushroom growers indicated exportation of their products to other neighbouring countries but these are quite informal and not captured in the Ghana trade statistics. GB

Cassava, yam farmers to reap higher values


GROWERS of cassava and yam, two of the country’s commonest staple foods, are set to reap higher values from their produce following an intervention by the Food Research Institute of the Council for Scientific and Industrial Research (CSIR) to reduce physical and ehttp://www.graphic.com.gh/dailygraphic/index.phpconomic losses of yam and cassava.

The CSIR will ensure that through a project dubbed “Gains from Losses of Root and Tuber Crops” (GRATITUDE), a four-year European Union (EU) funded project will also seeks to add value to the tubers by processing them into other forms of finished and preserveable products.

GRATITUDE is being done in collaboration with the Natural Resources Institute (NRI, UK) and YIFSWA of NIGERIA. Thailand, Holland and Vietnam are also working on similar projects.

On the theme, “Reducing Post-Harvest Losses for Increased Security”, the project is specifically focused on three key areas; Reduction of physical losses by focusing on storage of fresh yams; value-added processing to reduce physical and economic losses in yam and cassava, improved utilisation of wastes (peels, liquid waste, spent brewery waste) to produce products for human consumption such as snacks, production of mushrooms and improved animal feed.

The Business Development Advisor (CAVA Project) of the CSIR, Mrs Marian Tandoh Wordey, told the Daily Graphic that by focusing on the three areas, GRATITUDE would help to enhance the role that the crops played in food and income security.

She added that it would also help to create additional value in rural settings, generate income and employment and develop a more favourable balance of trade for the country.

Mrs Wordey said the project, which began early this year, would also develop a best practice and new technologies for agronomists, agricultural students, and other stakeholders, not only in Ghana but also around the world.

She explained that so far, the project had conducted appraisals of the yam and cassava value chain conducted in parts of Kintampo, Techiman and Atebubu-Amantin.

“It identified actors in the yam value chain; their roles and responsibilities; mapped out the relationships between them; investigated challenges and coping strategies; and focus group discussions (FGDs) method of data collection was used,” she explained.

She outlined some of the achievements of the project as the successful appraisal of yam value chain, training of researchers on value chain assessment and management and the starting of initial field work on value chain assessment.

The project had also identified and selected improved yam storage structures for construction at farm gates. Key yam varieties have also been identified.

Mrs Wordy said GRATITUDE project website was presently under construction, while composite from cassava peels had been developed for mushroom production.

Nevertheless, she said some challenge encountered included how to establish accurate volumes of waste generated from cassava and yams and identifying more financially feasible up-scaling opportunities that would be spurred by technology.

In sub-Saharan Africa, about 700 million people depend on cassava and yam as important root and tubers in the food systems and as food security crops.

Statistics by the Food and Agricultural Organisation (FAOSTAT, 2008) show that the world production of cassava is 228 million metric tonnes and 52 metric tonnes of yams are produced around the world annually, with Ghana contributing five per cent as the world’s sixth highest producer of cassava, after Nigeria, Brazil, Thailand, Indonesia and DR Congo. Ghana is, therefore, the second largest producer of cassava in Africa with a total output of 12.2 million tonnes per annum.

Again, root and tuber crop production steadily increased from 688 metric tonnes in 2001 to 740 metric tonnes in 2007.

The crops, however, record between 30 per cent and 60 per cent losses in their post-harvest periods either through processing or food chain, leading to losses in their economic value, physical losses and bio-wastes.

In Ghana, a total of 3.7 million tonnes of cassava peels(waste) are generated annually. Peels are generated at the processing (for gari, agbelima, kokonte and high quality cassava flour) and consumption levels (fresh cassava used in households and chop bars).

Albe Farms breaks into EU market

 Albe Farms, located in the Akuapem South district of the Eastern Region has through exploration of product development and application managed to become a commercial farm. Ama Amankwah Baafi visited the farms and reports       

Albe Farms began poultry production in 1995and was doing well until the outbreak of bird flu disease which hit badly the poultry sector. Yet, through determination and hard work, owner of the farm Albert Amponsah Atuah diverted to vegetable and fruit farming after thorough research.

From 2002, it has been producing local fruits and vegetables namely mango, pineapple, pepper and garden eggs, as well as Asian vegetables such as, tinder and ravaya (aubergine). It started exporting in 2006.

Specifically, Albe Farms cultivate in Amanfrom and Oboadaka in Akuapem South and Samsam in the Ga West Municipality of the Greater Accra region, while it has out growers for mango production in Obom, Ada, Kpando, Hohoe and Dodowa.    

With its current production capacity, it produces about 1000 metric tonnes of pineapple, 4000 metric tons of mangoes and 1000 metric tons of chili pepper per annum respectively.

Albert told GRAPHIC BUSINESS that the chilli pepper is harvested in its green state as the market demands. “We don’t wait for them to get ripe and when we harvest in that state we get high yields. We are looking at about 5000 with the Asian vegetables,” he said.

Albe Farms has a turnover of about GH₵350, 000, employs five administrative staff and over 100 farm hands, with majority being out growers.

“Our export market distribution channels are for importers and private agencies, am now working to distribute through the large retailers which are most of the supermarkets in the European market”, he stated.

Albe farms exports to Europe (Netherlands and Spain) and has a capital base of US$100, 00.

One needs to get GLOBALGAP certification to get to the market and a contractual agreement. The certification entails good agricultural practices on the farm so that produce will be fit for consumption.

Albert explained GLOBALGAP goes to the extent of knowing the type of chemicals a farmer uses, the active ingredients and then handling of produce among others.

He mentioned the lack of consistent supply of the fruits and vegetables as an obstacle. “Quality is also an issue. It is difficult sometimes to get the volume that you need due to lack of awareness of the demand of fruits and vegetables on the international market. I think it is the responsibility of the Ministry of Food and Agriculture and people like me to educate farmers on the opportunity,” he said.

He is also not happy that there is available funding but it is inaccessible and often times delay. When a farmer applies for a facility, the money becomes available during off season and so there is a delay in supplying for customers. “So by the time you receive the money it does not impact on your activity since orders may have been cancelled,” he stated.

Also, he said the cost of credit is high, there is high shipping cost and experience exchange rate loss, when during negotiation with a buyer one is asked to pay for freight here in Ghana. Transportation to port is also a challenge.

“We need to deepen public private partnership. Now the private sector and government seem to be working separately so at the end of the day the benefit is not realised. There should be consistent visitation to this area. Extension services limited to technical expertise but then when it comes to other services like the Ghana Export Promotion Authority visiting us to know exactly our problems it does not happen. They only try to put up public fora but which is even once a year,” he said.  

Also, he said the value chain system in the sector; the partnership particularly within the private sector needs to be developed. “As a commercial and exporting farmer sometimes I suffer breach in the system. Sometimes I have a contract with small holder producers asking them to give me some kind of fruits and volumes but after signing agreement sometimes the fruits would be ready but they end up selling to other buyers” he explained.

He said there is also a challenge at the port because as a country we do not have vessels but depend on foreign ones that come to transport our perishable produce and so we do not have a control over the perishable items.  

Labour has also become very difficult to get because the youth have all migrated to the cities and left the villages for the older generation to farm. Due to the aging workforce, productivity is low even though resources are available for production.

He recommended that through local government much emphasis should be laid on rural urban drift. Projects must be developed to keep the youth there and if farming is taken seriously we will get the youth back.

Albert said he is looking forward to expand Albe farms but is constrained by the issue of labour saying that there is need to develop the skills of the youth.

He is mostly self-taught and researches extensively to get buyers. To him, it is expensive to be attending fairs always and that there should be specific fairs for each exporter. “Now that I have the market am concerned about how to increase production and improve quality. The demand for pepper and pineapple is now on the increase therefore if Ghana should have about 10 percent of the market share it would benefit immensely”.

Albert has a BSc in agribusiness but read business at the advance level. “I have entrepreneurial spirit in me so I did self studies on these areas because I realised it has a long value chain”.

He hails from Akropong-Akuapem. He advised the youth to seek careers in agriculture saying, “It is lucrative if one invest his time and resources he will have a good pay back. The basic thing is to be well informed”.

Major finance relating to agriculture in Ghana is mostly short term and this Albert said does not boost agricultural production. “We normally have problems with our financiers and this should be addressed. If we could have a medium to long term finance we could have leverage. The Export Development and Agricultural Investment Fund can do more by including transportation, growing, marketing and all others”.   

As a way of giving back to his community, Albert has been facilitating and collaborating with non-government organisations like Essoko to build the capacity of farmers in the area to be able to reach more buyers.    

The world fruit and vegetables market is expected to exceed US$735 billion by 2015, representing 25 per cent growth over five years. By 2015, the market is predicted to reach over 690 million tons in volume, up 5 per cent compared with 2010.

The Food and Agriculture Organization reports the exports of fruit and vegetables generate around $45 billion. The global fruit and vegetables market is concentrated, with the 50 top companies accounting for 70 per cent of revenue. The industry includes goods under various forms like canned, frozen, concentrated and dehydrated products. Fruit and vegetables are processed to make juices, jams, chutneys, pickles and jellies. Vegetables represent almost 65 per cent of the overall market, according to research from MarketLine.

Albert added that food security offers a great business opportunity for Africa as the whole world now looks up to Africa for food.  Albe Farms has received US$9,400 grant from SNV Netherlands development organisation to improve production to be able to reach overseas markets and also help connect them to new local markets including pineapple juice producers.

SNV has been working with pineapple growers in Ghana since 2006, and is active in five regions. SNV’s work in the pineapple sector currently reaches over 5,500 individual farmers, through 184 cooperatives around Ghana.

Attract youth into farming

Story: Ama Amankwah Baafi

A COMMERCIAL farmer and exporter of horticultural products, Mr Albert Amponsah, has called on local government authorities to devise ways of making farming attractive to the youth in their localities since the venture has the solution to the country’s unemployment problem.

Mr Amponsah, who has been farming and exporting a good quantity of pineapples, pepper and other vegetables to Europe and Asia, said farming was a lucrative business which should be supported, and the youth encouraged to engage in it.

He told the Daily Graphic in an exclusive interview on his farm at Amanfrom, near Nsawam in the Eastern Region, that every local assembly should identify crops that grew well in their localities, support their cultivation with research and capital, while re-orienting the youth to take interest in the trade, especially as agriculture had now become the sole preserve of the aged in the communities.

“The local assemblies need to come out with creative ways of making agriculture viable at the district level. There should be projects to attract the youth, and we can only attract them if farming is well supported,” he stressed.

Mr Amponsah prefers that the Youth-in-Agric programme, although laudable, was not limited to maize and a few grains. Rather, every district should identify the crops in which they had comparative advantage so that, with their knowledge and the appropriate soil type, they could make the best use of their resources.

“For example, in Nsawam, we have an advantage of growing pineapples, thus, the youth here will hardly take you seriously if you start a programme here that concentrates on maize,” he advised.

He explained that the country, in general, had enormous potential for growing horticultural products to feed the local market, as well as for export, but that had to be structured to enable each local area to concentrate on their strength.

Mr Amponsah took to farming right after his six form education in mid-1990s. He has gone on to subject his farming practices and procedures to international certification which has now opened the door for him to export directly to buyers mostly in Europe.

Albe Farms, name of Mr Amponsah’s farm, has consequently grown to the point where he employs five administrative assistants and 100 farmers, mostly out-grower farmers.

Mr Amponsah also called for a deepening of public-private partnerships in farming, explaining that such partnerships would help bridge the gap between the differing priorities of the government and the private sector, which in many cases were not aligned for the same direction.

“Mostly, the private sector looks this way, and the government also, elsewhere. When this happens, the shared benefits that should come with the use of national resources does not accrue to all,” the commercial farmer intimated.

He said the partnerships could be developed along the agricultural value chain from inputs to the growing of crops, storage, transportation, processing and marketing, adding that such partnerships would also crush the bureaucracies associated with decision-making on issues that affected farming in the country.

The Albe Farms chief executive also wants regulatory authorities such as officials from the Ghana Export Promotion Authority (GEPA) to pay visits to their farms to familiarise themselves with their challenges, since the exporters forum alone could not address the issues holistically.

Ghana Protein in difficult times

Ghana Protein Limited is a Tema-based Fish meal producer that rode on the wings of the Ghana Investment Promotion Centre (GIPC) to help add value to waste churned out daily by the several canneries located in the industrial city. Ama Amankwah Baafi visited the facility and reports


Ghana Protein Limited (GPL) produces fish meal in commercial quantities using fully mechanical system. Within 30 minutes, fish waste goes through a milling system and it is quickly bagged ready to feed animals.

Ghana Protein is sandwiched by most of the canneries in Tema so it can feed on the waste from these canneries, which serves as its raw material. It took one of the investment drives by the Ghana Investment Promotion Centre (GIPC) to attract GPL to the country.

During a GRAPHIC BUSINESS visit to the company’s premises, the Head of Administration and Accounts, Mr Anthony Adu-Nketia, recounted officials of the GIPC during a visit to Cote d’Ivoire witnessed a model company of GPL processing fish waste and found it very impressive as it was of quality and of international standard.

Hence, a request was made for the company to replicate the feat in Ghana. That, he said, culminated into the procurement of a 25-acre land from Tema Development Corporation on which they subsequently built a 350-tonne fish meal plant.

“So technically speaking with this capacity of fish meal plant, Ghana can be self sufficient in fish meal production and possibly export to other countries to earn foreign investment,” he stated.

GPL registered as a body corporate under the laws of Ghana in the year 2000, but it was not until September 2007 that it completed all installation works on the site. Test production therefore commenced the same month, while commercial production began in January 2008.

GPL employs the most scientific and hygienic means of production including boiling to kill pathogens, as well as the separation of water from the oil that paves the way for the oil to be used for other things such as omega 3 oils.

Then after pressing, the preparation is dried in an oven and then goes through a milling machine after which it is bagged.

“So within 30 minutes, the raw fish you see with blood is bagged for use,” Mr Adu-Nketia explained.

A 50 kg GPL fish meal contains 60 per cent protein, seven per cent moisture, 18 per cent ash, 10 per cent fat, seven per cent calcium and one per cent salt. They are salmonella and aflatoxin free.

GPL attributed its success to poultry farmers in the country, who he said, accounted for about 95 per cent of their clients. They come from Dormaa Ahenkro in the Brong Ahafo Region, who before GPL came in bought fish meal from Cote d’Ivoire.

In collaboration with Ranaan Fish Feed, a renowned feed producer in Israel, GPL has set up of a fish pellet plant. Hitherto, Ranaan was producing and exporting to Ghana.

“As we speak, they are buying from us after they visited our plant in 2009. And you know the standards in Israel are just as that of US and Europe,” he explained.

GPL believes it has a great future in the country, as its turnover has since inception been rising steadily and now sits in the region of GH₵4.7 million annually.

In spite of these achievements, management of GPL knows they are producing far below capacity as Mr Adu-Nketia intimated “even in the event of producing 10 per cent of our capacity, we have employed 50 people.”

Yet, Mr. Adu-Nketia said accessing raw material averaging about 360 tonnes of fish waste at capacity to process had been challenging, particularly with so called permit granted by the Environmental Protection Agency (EPA) to individuals to dry fish waste on bear ground.

“We thought that producing unwholesome fish meal as a country was not good so we brought in this five million dollar investment to solve that. But why should we accept fish meal dried on the bear ground as our basic standard,’’ he questioned.

According to him, people engaged in ‘local’ production collect the fish waste, put it in the sun during which birds feed on it, decompose and turn into maggots and wait on for decomposition to take place and as the sun warm up it gets dry up. They then take it to a milling point and afterwards sell.

“So they are only processing fish waste that is decaying. Virtually all the pathogens that came with it are still in there. Mind you it is only when you process fresh that you can get the right protein and fish meal is determined by how rich it is in protein and how it is not contaminated with E. coli or salmonella,” he stated.

He described as unfortunate the situation where some callous local feed producers go further to add sand and some saw dust to the feed before they sell to the unsuspecting farmers.

“Eventually when you process fish waste under such circumstances, before the decaying set in there are high histamine levels and it means you have a bad fish meal that when the birds eat it will affect them. They will have stunt growth, they will not lay eggs and even those who will, will lay very small eggs and eventually you have E.coli and salmonella infection in those eggs which is bad for human consumption,” he added.

GPL said though GIPC that promoted the business did it best to ensure they get other sources of supply it was not successful.



The Chief Executive Officer of GPL, Mr Fabrice Pizano, reiterated that the challenges facing GPL were enormous and frustrating, saying, “Even though we feel very much disappointed, I must say we are not discouraged since we still have confidence in the leadership of the country to assist in finding a lasting solution to our problems”.

He appealed to the sector ministries and state regulatory institutions to collaborate with the GIPC to ensure that no investor will ever feel disappointed in investing in Ghana.

“The current situation leaves much to be desire about the existing Ghanaian regulatory institutions and promotion of investment. The president is the first investment promoter and so we are calling on him to intervene and not let entrepreneurs start crying,” he concluded.

Meanwhile, GPL risks collapsing as the its sole supplier of raw materials, Pioneer Food Cannery (PFC), has served notice of its intension to set up its own fish meal plant.

Consequently, PFC will no longer supply GPL fish waste by October 31.

“It means our investment will go off within a period of four years. Then it becomes a very bad investment spectacle for us as a country especially when the raw material is regulated and cannot be imported,” stated Mr. Adu-Nketia.

Climate change puts Ghana's agric at risk

Ghana may be worst hit by the impact of Climate Change (CC) if adequate measures are not adopted to contain the brunt, according to  a report by the Environmental Protection Agency.

The report cautioned that the current low yields than projected being experienced in the agric sector had been attributed to the effects of climate change.

It warned that yields in the agric sector are expected to further decrease, which may likely affect the vulnerable and the poor.

The report termed the Policy Advice Series 2 highlights the negative effects of climate change on the agricultural sector in Ghana.

The UN Framework Convention on Climate Change (UNFCCC), in  Article 1, defines climate change as: ‘A change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods’.

Historical data for Ghana from the year 1961 to 2000 clearly shows a progressive rise in temperature and decrease in annual rainfall. In Ghana, CC is manifested through rising temperatures, declining rainfall totals and increased variability, rising sea levels and high incidence of weather extremes and disasters such as flash floods (Minia et al. 2004).

Agriculture accounts for about one-third of Gross Domestic Product (GDP); 28.3 per cent (2011 est.) and employs more than half of the workforce, mainly small landholders. The sector grew by 2.8 per cent against a target of 5.3 per cent in 2011 (2012 Budget).

Irregular rainfall pattern is a feature of CC with particularly damaging consequences, such as droughts and flood and these are predicted to get worse over time.

According to the EPA Policy Advice Series, which have been developed to enhance understanding and appreciation of CC and disaster risk issues, by policy makers and senior technocracts and to support them to take urgent and needed decisons, agriculture and food security are interrelated and thus, CC induced unsustainable livelihoods will result in negative consequences on food security, poverty, health, education, gender equality and environmental degradation.

Agricultural production’s dependence on rainfall is a significant hindrance to the developments of the sector in Ghana. The use of irrigation to counter the effects of poor rainfall is particularly low across the country.

Agriculture is highly sensitive to temperature and rainfall and yields are plummeting and will continue to do so.

Major challenges in the agricultural sector include low crop yields, over dependence on inconsistent rainfall, unsustainable agricultural practices, low knowledge of use technology and sustainable utilisation of the natural resource base, mostly due to poverty levels among farmers.

CC impacts are reduced soil fertility due to changes in precipitation (rainfall) and temperature, rainfall deficits resulting in desertification of grazing pastures and reduced water availability for animals and shifts in agro-ecological zones that are too rapid for trees and farming systems to adapt to.

Others are incidents of pest attacks resulting from an increased temperature, loss of cropland from erosion and desertification, coastal erosion and destruction of valuable coastal agricultural land.

Earlier this month, about 5,200 acres of rice farms in the Ketu-North District of the Volta region were invaded by army worms and caused massive destruction to crops. The farms included 1,200 acre Afife Irrigation Project Farm and another 3,000 acres of rain fed private farms located in the Kpli Valley at Klenomadi. A total of 2,524 farmers risked losing their livelihood but for the timely intervention of the Regional Directorate of Agriculture that commenced spraying to prevent the spread of the army worm invasion in the district.

In 2003 Ghana signed the Maputo Declaration of African countries allocating 10 per cent of national budgetary resources to develop the agricultural sector. The spending on agricultural research and development in Ghana doubled between 2000 and 2008, from GH₵151 billion to GH₵352 billion respectively, but most went towards an increased outlay for salaries (75 to 83 per cent).

All planning in the agricultural sector is aligned with the Food and Agricultural Sector Development Policy (FASDEP 11) which seeks to address the challenges of the agricultural sector.

However, impacts of CC have not been factored in any of the six policy objectives, though agriculture is highly sensitive to temperature and rainfall. For instance, objective one targets production and post harvest losses but does not account for the potential increase in vulnerability of the poor due to the unpredictable climate change conditions.

The EPA Policy Series 2 recommended that more urgently, impacts of CC need to be quickly factored into the sector plan so that additional funding can be sourced for CC adaptation measures in the country. 

Nevertheless, government’s outlook for food and agriculture in 2012 as stated in the budget is to expand the Agriculture Subsidy Programme to include liquid fertilizers (bio-fertilizer) and improved seeds. The Ministry will subsidize 165,000 metric tonnes of chemical and liquid fertilizer.

“The National Food Buffer Stock Company will acquire another rice mill with a capacity of about 8.5 metric tonnes per hour, to be located in the Northern Region where rice production has been increasing for the past 3 years. In line with the national policy of stocking food for a better Ghana, at least 10,000 metric tonnes each of maize and milled rice, as well as 1,000 metric tonnes of soya beans will be stocked at all times,” Minister of Finance, Dr. Kwabena Duffuor announced.

Recently, the Minister of Food and Agriculture, Mr Kwesi Ahwoi announced that government had sourced an amount of US$145 million from the World Bank and the United States Agency for the implementation of the Ghana Commercial Agricultural Project (GCAP) to address food security in the country.

He said by the end of the project in 2017, Ghana would be able to produce enough rice to feed itself and also become the bread basket for West African sub-region.

Implement the biosafety law

To guarantee food security

Government has been asked to implement the new biosafety law in order to improve the country’s agricultural yield and guarantee food security.

An executive of the Forum for Agricultural Research in Africa (FARA), Professor Walter Alsatian, said this at a media briefing in Accra that the passage of the biosafety law would provide an opportunity for the country to replicate the good practices that other countries were using to improve the agricola sectors.

The Ghana Biosafety Law, Act 831, was passed in June 2011 but is yet to be implemented into the country’s agricultural sector.

According to him, the introduction of modern biotechnology into the agricultural sector would complement traditional technologies to effectively address the problems of food security while increasing the incomes of farmers.

Professor Alsatian said the implementation of the biosafety law would help address the challenges associated with the new threat of climate change on farming.

 Biotechnology is any technological application that uses biological systems, living organisms, or derivatives to make or modify products for specific use. The technology has tools that apply to the various sub-sectors of agriculture such as crops, livestock, fisheries, aquaculture, forestry and agree-processing.

 Apart from the Biosafety Law, Prof. Alsatian said Ghana had goodwill to realise the use of biotechnology from various international agencies such as the World Bank and UNION.

“Now Ghana needs to support research and development in biotechnology, promote public-private partnership in exploitation of modified and non-modified biotechnology for agriculture and consider modern bitches as one of the tools for agricultural development.”

Professor Alsatian debunked the risk perceptions associated with biotechnology such as dependence on multinationals for seedlings, toxicity, allergic reactions and gene flow, saying “ these are just not true”.

According to him, the lack of understanding on the issues was due to little awareness on the proper use of biotechnology.

 He said increased consumption of GM foods was safer because they were scrutinised.

“There is a scientific backing and there is a law governing it. They are subjected to test and risk assessment,” he added.

He called on the media to help educate the public on issues of biotechnology.

FARA is the technical arm of the Africa Union in matters of agricultural research and has been mandated to assist in the implementation of the Comprehensive African Agriculture Development Programme Pillar IV, which deals with agricultural research, technology dissemination and adoption.   

 Dedicate funds to support fertiliser subsidy - Peasant farmers

The Peasant Farmers Association of Ghana (PFAG) has called for certain taxes to be dedicated to improving agricultural productivity, particularly the Fertiliser Subsidy Programme (FSP).

According to the association, areas to tax should include three per cent of banks’ profit; a percentage of Value Added Tax (VAT), Communications Services Tax, contributions from lottery revenue and a percentage of oil and gas revenue. 

Outlining key issues that needed to be reviewed with regards to the FSP at a policy dialogue in Accra, the Programme Coordinator of PFAG, Ms Victoria Adongo said there should also be an imposition of tariffs on imported food in which Ghana had competitive advantage as a way of raising additional funds to support local agricultural development through the implementation of the FSP.

She said the capacity of the Ghana Agricultural Input Dealers Association should be built to improve their distribution networks and that the subsidy period should run all-year round.

The association has also asked for strict enforcement of the law against smuggling and punishment for person caught trying to smuggle fertiliser outside the country.

PFAG said the government must put in a mechanism to guarantee all farmers equal access to the subsidised fertiliser to avoid hoarding by big players.

The government initiated the Fertiliser Subsidy Programme (FSP) in 2008 to help farmers increase their rate of fertiliser use, thereby increasing productivity and production.

Outlining key issues for a review of the FSP, at a policy dialogue in Accra, the Programme Coordinator of PFAG, Ms Victoria Adongo, said the decentralisation of distribution networks should be made to cover large farming and rural communities.

According to PFAG, key challenges in the current FSP include the delay in the supply of fertilisers, women’s access to subsidised fertiliser not specifically addressed in the current design of the programme and that delay in payment by the government to fertiliser suppliers.

In that vein, the President of PFAG, Mr. Mohammed Adam Nashiru, said the continuation of the fertiliser and other subsidies was necessarily justifiable and emerging consensus was that such subsidies were essential for African agriculture sector.

He said fertiliser was a key determinant of high crop yields, for that reason “in our efforts to ensure the country becomes food secure, we should be interested in access of fertiliser by farmers.”

He added; “Ghana is still not food secure as food production is less than required consumption, with commodities like rice and maize still not enough to feed the country.”

The association called on parliament and the government to gather the political will and do what was best for farmers. 

Assess impact of climate change on the economy

Ghana has been asked to begin to put monetary value on the losses the country is likely to incur as a result of the impact of climate change on the various sectors of economy.

Dr. Delali Dovie of the Africa Adaptation Research Centre of the University of Ghana, Legon, said though there was a global study by the World Bank on the impact of climate change  and Ghana as a pilot country, it has not made good use of its financial assessment of the impact of climate change.

He said it may not reflect directly in our gross domestic product (GDP) but reflect in the sectors.

“In the energy sector for instance if we don’t get water in the Akosombo dam to generate power definitely the plant may have to be shut down and that is not good for us, especially, our industries. It would mean that production will go down and people will lose their jobs. If production goes down then revenue generated will also go down”, he stated.

All these combined, he said it is a developmental challenge as far as CC is concerned and emphasized that the nation has to know what it is losing as a country due to climate change.

The UN Framework Convention on Climate Change (UNFCCC), in its Article 1, defines climate change as a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods

Dr. Dovie spoke to GRAPHIC BUSINESS at the sidelines of a training workshop for journalists on climate change at Akosombo last week. According to Dr. Dovie, Ghana is already experiencing some leakages but has not put financial value to it.

“If you look at our agric sector which we depend on heavily in Ghana and even as a source of employment for our people and the fact that it is basically at subsistence level, and mostly rain fed, then we should be concerned when there are no rains or when the rains do not fall at de right time. It could lead to poor yield; diminish incomes and affects livelihoods of the farmers”.

He said there are various kinds of processes taking place from the human dimension as far as CC is concerned that that the country has not explored financially and that it is important we start putting financial value on the impact of CC on the various sectors.

 The Africa Adaptation Programme and the International Centre for Journalists jointly organized the training in collaboration with the Ghana Journalists Association (GJA). The training was one of the series organised to build the capacity of journalists in the 20 African countries implementing the AAP, to report on, and raise public understanding of the need to mainstream climate resilience into national development strategies.

DUFFUOR KICK-STARTS 2012 CAMPAIGN

Minister of Finance and Economic Planning, Dr. Kwabena Duffuor on Wednesday kick-started the National Democratic Congress (NDC) political campaign when he presented the 2012 Budget Statement in Parliament.

He insisted that government had significantly delivered on its promise of a better Ghana for Ghanaians, justifying his claim with a seemingly endless list of what he described as achievements. Waxing lyrical, poetical and hilarious, Dr. Duffour told the august House:

"We promised to remove schools under trees, and we are very much on course!
We promised to remove inequities in incomes through the single spine, and we are very much on course!
We promised to move the economy from fragility to robustness, yes we have!
We promised to significantly expand the economy, yes we have!
We promised to arrest inflation, yes we have!
We promised to arrest the rapid depreciation of the Cedi, yes we have! We promised to provide free school uniforms and exercise books, yes we have!
We promised to deliver skills training and jobs to our youth, yes we have!
We promised deeper competition in the telephone industry, yes we have through Mobile Number Portability!"
He stated, "These achievements give us confidence that in the coming years, Ghanaians can continue to trust the NDC Government to faithfully steer the affairs of our dear nation."This indeed is a budget that heralds the march towards the "Better Ghana" and gives hope of a brighter tomorrow and the building of a nation that is truly great and strong."

The theme for the 2012 Budget Statement and Economic Policy is "Infrastructure Development for Accelerated Growth and Job Creation."

According to the Finance Minister, the focus of the 2012 Budget was on the provision of key infrastructure in various sectors of the economy to further stimulate growth, support the private sector to create more jobs and improve the incomes of Ghanaians.

He said the key infrastructural projects to be implemented in 2012 , and which were consistent with the Ghana Shared Growth and Development Agenda (GSGDA) would principally be in the following areas: Electricity, Oil and Gas; Water and Sanitation; Railways, Roads, and Ports; and Health, Education, and Agriculture.

He stated that in order to accelerate the achievement of universal health coverage, government would commence the implementation of the one-time premium payment policy under the National Health Insurance Scheme (NHIS).

To further improve financial controls and efficiency, the NHIS would pilot capitation as an alternative Provider Payment Mechanism (PPM). Furthermore, the review of the NHIS law would result in a major restructuring of the scheme at the district, regional and national levels.

To further improve financial controls and efficiency, the NHIS would pilot capitation as an alternative Provider Payment Mechanism (PPM). Furthermore, the review of the NHIS law would result in a major restructuring of the scheme at the district, regional and national levels.

Dr. Duffuor said Ghana's economy has witnessed significant growth and stability since 2009. The huge fiscal and external current account deficits that characterized the pre-2009 period have been reduced significantly; inflation has dropped to single-digit levels; the stock of international reserves has risen to over three months of import cover; and the exchange rate has stabilized since August 2009, except for some minor volatility earlier in the year.

Real GDP growth has been very strong while the rebasing and revision of the national accounts saw the country's national income expanded by more than 60 percent, moving the country into a lower middle-income status.

"There has been a significant growth in real GDP from 4.0 per cent in 2009, to 7.7 per cent in 2010 and 13.6 per cent in 2011 on provisional basis, making Ghana one of the fastest growing economies in the world in 2011 "At the end of 2008, the fiscal deficit on cash basis was 8.5 per cent of GDP (14.5 percent of GDP - old series).

As at the end of September 2011, it had been reduced significantly to 2.0 percent of GDP." Inflation which was 18.1 per cent at the end of 2008 now stands at 8.40 per cent in September, 2011.

This single digit inflation, he maintained, was real and had been sustained for the longest period of our economic history, from June 2010 to date. Dr. Duffuor said interest rates have continuously declined since 2009.

This was evidenced by the significant reduction in the yield of the 91-day money market instrument from 24.67 per cent in 2008 to 9.1 per cent in September 2011, making it the lowest recorded money market rate in decades.

Gross International Reserves of US$4.98 billion recorded in October 2011 exceeded 3.0 months of import cover of goods and services, compared to reserves of US$2.0 billion at the end of December 2008.

He said in accordance with provisions of the Petroleum Revenue Management Act, Act 805, 2011 (PRMA), the Ghana National Petroleum Corporation (GNPC) has, on behalf of Government, lifted oil from the FPSO Kwame Nkrumah four times as at the end of October 2011.

The proceeds from the first three liftings amount to 2,980,720 barrels which realized a total sum of US$337.3 million (GH? 506.0 million). have been received. The proceeds for the fourth lift are expected later in November 2011.

"The total oil revenue received so far has been allocated to the various allowable sources in accordance with the PRMA. A total of US$112 million (equivalent to GHC168 million) has been transferred into the Consolidated Fund as the Annual Budget Funding Amount and is being utilized in the four priority areas as set out in the 2011 Supplementary Budget in accordance with relevant sections of the PRMA."

"An amount of US$54.8 million and US$14.4 million have been transferred into the Stabilization and Heritage Fund accounts respectively in accordance with relevant sections of the PRMA."

Also, in line with Section 7 of the PRMA, an amount of US$156.1 million has been transferred to GNPC as equity financing cost and GNPC s share of net Carried and Participating Interest. Some highlights of the 2012 budget statement are as follows:

MACROECONOMIC FRAMEWORK FOR THE MEDIUM-TERM (2012-14) In fiscal year 2012 and the medium term, government macroeconomic policy will focus on three complementary objectives, namely: - preserving the gains of macroeconomic stabilization and fiscal consolidation achieved since 2009; - creating fiscal space for high-priority investments to spur long-term growth and development; and - maintaining inflation in single digits

To achieve these objectives, fiscal deficits will be kept at levels that can be prudently financed, without crowding out private sector credit, while efforts to fill the country's large infrastructure gaps will be accelerated and kept consistent with the Ghana Shared Growth and Development Agenda (GSGDA).

Over the medium term, economic growth is expected to average 8 percent, reflecting strong expansion in both the oil and non-oil sectors of the economy.
The fiscal deficit reduction will be driven by rising oil revenues, strengthened revenue administration and prudent expenditure management. Monetary policy will be geared at maintaining single-digit inflation, while the balance of payments is projected to remain in surplus, reflecting high commodity export prices, oil production and exports, and continuing portfolio capital inflows To finance infrastructure projects critical to the country's growth and development, a US$3 billion non-concessional but competitive facility from the China Development Bank has been sourced.

The details of the macroeconomic targets for fiscal 2012 are as follows: - Real non-oil GDP growth of 7.6 percent; - Real overall GDP growth of 9.4 percent; - Average inflation of 8.7 percent; - End-period inflation of 8.5 percent; - Overall budget deficit equivalent to 4.8 percent of GDP; and - Gross international reserves of not less than three months of import cover for goods and services. Petroleum Revenues- Outlook for 2012 The total revenue from crude oil sales in 2012 fiscal year is projected at GHC 1,239.82 million based on an estimated average oil price of US$90.00 per barrel and production of 90,000 barrels per day.

This amount comprises royalty payments of GHC 236.87 million, income from government Carried and Participating Interest of GHC 618.84 million, and corporate income tax of GHC384.11 million.

Transfer of oil revenue to the National Oil Company will amount to GHC361.90 million. The benchmark revenue will amount to GHC877.92 million. The proposed 70 percent of the benchmark revenue determined as the Annual Budget Funding Amount will amount to GHC614.55 million. Transfer to the Ghana Petroleum funds will amount to GHC263.28 million.

In line with Section 21(5) of the PRMA, the Annual Budget Funding Amount would be spent in the following four priority areas: - Expenditure and amortization of loans for oil and gas infrastructure; - Road and other infrastructure; - Agricultural modernization; and - Capacity building (including oil and gas) Monetary Sector Outlook Monetary policy in the medium-term will focus on maintaining single digit inflation while responding to volatility in the foreign exchange market.

To this end, Bank of Ghana will continue to deploy its instruments within the inflation targeting framework to preserve the gains of macroeconomic stabilization. Recognizing the crucial role the private sector is expected to play in the country's growth and development process, real credit to the private sector will increase on a sustained basis to an average of 18 per cent per annum over the medium term.

The Bank of Ghana will continue to engage the deposit money banks on the determination of base rates in the banking sector, with the view to bringing standardization and transparency into the determination of lending rates.

It is envisaged that there will be a further build-up in Gross International Reserves to an average of US$7.5 billion (estimated around 4.5 months of import cover) over the medium term. Government will build higher benchmark bonds.

Seven-year and 10-year fixed rate bonds will be introduced in 2012 to reduce liquidity in the short-dated instruments and extend the yield curve.
To mitigate the risks of rising floating interest rates for debt servicing, government will hedge the interest rates through swap arrangements to allow for enhanced predictability of debt service planning and forecast.

RESOURCE MOBILISATION AND ALLOCATION FOR 2012 As a result of the rebasing and revision of the national accounts, Ghana became a lower middle-income country. However, this resulted in a reduced tax revenue-to-GDP ratio from 22 percent to 13.1 percent in 2010. This figure is below the average of 15 percent for the sub-Saharan African countries and also below the average of 18 percent for lower middle-income countries. Ghana's estimated tax revenue-GDP ratio outturn of 16.5 percent for 2011 indicates a strong improvement in revenue mobilization and is above the average for sub-Saharan African countries and below the average for lower middle-income countries. Proposed Tax Policy Measures for 2012 The focus therefore of revenue management in fiscal year 2012 is to expand the tax base and improve the efficiency of the tax administration. The following tax proposals will therefore take effect in 2012. Taxation of Professionals and Informal Sector The Self-Employment Income Tax Revenue Enhancing Project has been set up to broaden the tax net. Through this project, the contribution of the self-employed in the domestic tax revenue would improve from the current 4% to a targeted level of 8%. Increase in VAT threshold As part of the continued efforts to improve efficiency in tax administration, Government will raise the VAT registration threshold from an annual turnover of GHC90,000 in 2011 to GHC120,000.00 in fiscal year 2012. Businesses with a turnover of less than GHC120,000.00 over a twelve month period will pay a presumptive tax of 6 per cent of turnover. These taxpayers will fall within the category of small taxpayers and the Ghana Revenue Authority (GRA) will put in place the necessary measures to operationalize the small taxpayer office concept. The increase in VAT threshold does not constitute an increase in the VAT rate. Transfer PricingRecent studies in the mining sector showed that Ghana loses about US$36 million a year through transfer pricing. Together with the GRA we have drafted regulations to strengthen existing tax legislation to deal with taxation of multinational companies and minimize the incidence of abuse of transfer pricing. The regulation will soon be presented to Parliament. Tax Amnesty Government is aware that many companies and individuals are operating outside the tax net. To address this problem, Government is offering amnesty to all such companies and individuals who have evaded taxes. The GRA will embark on a registration and re-registration exercise of tax payers during this period. All tax payers are therefore encouraged to take advantage of this opportunity to register. The tax amnesty will start from January 2012 and end on 30th September 2012. Natural Resource Taxation Beginning in the fiscal year 2012, the following changes to the taxation of mining activities will apply: - Following established practice in the extractive industry, and in the oil and gas sector, the corporate tax rate for mining companies will be increased from the current 25 percent to 35 percent; - A windfall profit tax of 10 percent will be collected from all mining companies; and - A uniform regime for capital allowance of 20 percent for five years for mining, as is the case in the oil and gas sector. Ring Fencing The principle of Ring-fencing as applicable to the natural resource sector (petroleum and mining) will be made more explicit. Beginning in fiscal year 2012, cost in one contract area or site will not be allowed to be set off against profits from another (belonging to the same company) in determining chargeable income for tax purposes. This will prevent companies undertaking a series of projects from deducting costs from new projects against profitable ventures yielding taxable income.