THE KWAHU INVESTMENT DIALOGUE 2023 – A CASE FOR AGRIBUSINESS INVESTORS TO CONSIDER
In the course of history, no problem has been more real to more people than that of hunger. A paradox of our technological age is that advances in the agricultural sciences have not been applied as rapidly as those of the medical sciences which have dramatically increased the rate of population growth. Despite a vast potential for increased food production, we are still confronted with serious malnutrition and hunger in many parts of the world.
During the last decade, world population has increased by 22 per cent, while agricultural production, excluding that of Mainland China, has increased by 29 per cent. But agriculture’s 7 per cent margin is frighteningly small in relation to the efforts being made to improve living standards in the developing countries. Moreover, agricultural growth has been unevenly distributed and has been, in general, slowest in the more overpopulated countries where nutritional levels are lowest. The world is faced with a major challenge for the rest of this century in producing enough food for people.
To meet this challenge, the rate of agricultural growth must be greatly accelerated. The world has the land for this, and it has the labour, while vast new knowledge from science and technology awaits application. Capital too is available, but its investment has been retarded by a variety of structural weaknesses, both economic and social.
Food systems across Africa are changing and agricultural supply chains need to adapt. To be successful, policies and approaches need to be reflective of the local context and support the development and growth of local food systems that can integrate into national, regional and local supply chains. Ensuring a sustainable supply of food hinges on reducing the reliance on imports and increasing the efficiency of local markets in Africa.
African agriculture and food systems are changing rapidly in positive and exciting ways. That sentiment has been echoed throughout the world as the African Union (AU) observed 2014 as the Year of Agriculture and Food Security and the 10th Anniversary of the Comprehensive Africa Agriculture Development Program (CAADP), the agricultural program of the New Partnership for Africa’s Development (NEPAD). The transformations underway have implications for not just Africa but the whole world. Africa has the potential not only to feed itself but also to produce surpluses to help to provide global food and nutrition security, reduce poverty and hunger, and drive economic development.
Worldwide, the population is expected to exceed 9 billion by 2050 and ensuring food security and good nutrition will be one of our most pressing challenges. The population of Africa is expected to double to 2.5 billion by 2050. And with this rapidly rising population, the demand for food is increasing even faster. That is due in part to the continent’s growing middle class, which is increasing consumption of protein-intensive foods. This means that production of farmed produce and animal feed will need to increase at a rate greater than that of population growth. With an estimated 65% of the world’s arable land, Africa has the potential not only to feed itself but also help to provide global food and nutrition security and drive down its own poverty and hunger.
Agriculture is the mainstay of the Ghanaian economy, providing employment for a large proportion of the population. Yet agricultural growth has been slow and sometimes negative and has not been accompanied by a growth in manufacturing industry.
Ghana’s agriculture sector is dominated by smallholder farmers who predominantly produce crops. 33% of Ghana’s workforce is directly employed in the agriculture sector. There are many investment opportunities in Agriculture in Ghana for various sub-sectors under the industry.
Ghana is amongst the top producers of certain crops in the world. Ghana ranks as the fourth largest producer of cassava in the world. Seventy per cent of Ghanaian smallholder farmers are into the production of cassava. Yam, a popular root crop in many parts of the world, is produced in large quantities in Ghana. Ghana is the second largest producer of yam globally, ranking only behind Nigeria. Ghana also produces pineapples, groundnuts, coconuts, oil palm and several other crops in large quantities.
Sixty per cent of Ghana’s protein needs are obtained from fish. Marine fishing is dominant in Ghana and contributes to 80% of Ghana’s total fish production. Depleting fish stock in Ghana’s waters has led to the need for significant investment in aquaculture.
To encourage investment into the agribusiness sector, there are several tax incentives that are granted to companies that invest in agriculture in Ghana. These include 5–10-year tax holidays and concessionary corporate income tax rates. In addition, tax losses for companies that invest in the agriculture sector can be carried over for up to five years.
Agriculture has for many decades dominated the economy of the country and contributed more than one-third of the Gross Domestic Product (GDP). The economy of Kwahu, especially the Afram Plains enclave is driven by agriculture due to the vast tracts of arable land coupled with good weather conditions. The 2010 population and housing census classified agricultural household as one that engages generally in agricultural activities or at least one of its members engages in agricultural production even if not earning from agricultural activity alone.
To meet increasing demand, it is necessary to grow the agri-food sector and the entire food supply chain. Post-harvest business, such as storage, processing, delivery and retail markets are key to ensure that supplies reach the consumers and improvements in farm inputs and farming strategies are needed to increase productivity and this is what Kwahu especially the Afram Pains enclave require.
The Kwahu Afram Plains has geology described as principally Upper Voltairean sandstones consisting of coarse and fine-grained massive sandstones that are thin bedded, flaggy, impure, ferruginous or feldspathic and locally inter-bedded with shales and mudstone. The sandstones are found along the boundary margins whiles shales and mudstones outcrop within the central part of the Kwahu Afram Plains from below the sandstone bed.
The Afram Plains has generally low-lying lands that rise from 60 metres to 120 metres above sea level. The only high ground is the Donkorkrom plateau.
The Kwahu Afram Plains is drained by the Afram River in the west, Volta River in the east and the Obosom River in the north which flow continually throughout the year and can be used for both domestic and agricultural purposes.
The Kwahu Afram Plains falls within the savannah vegetation zone comprising of the savannah transitional zone and savannah woodland. This is characterised by short deciduous fire-resistant trees often widely spaced and a ground flora composed of grass of varying heights. Revering forests occur along the major rivers and streams of the Savannah Zone and the largest stretches are cultivated by villagers who settle near the rivers and streams.
15 soil types have been identified. Types classified as Haplic luvisols by the Food and Agricultural Organisation (FAO) constitute over 40% of the land area and belong to the Ejura Series. They have been developed over Voltaian clay shales, and occur under both forest and savannah vegetation types. In the absence of bush fires, they accumulate considerable reserves of organic matter in their top layers.
With minor exceptions, the soils of the Afram Plains are fertile and suited to a wide variety of crops. The quality of soils is unlikely to be a constraint to the agricultural development of the Kwahu Afram Pains. Indeed, one of the main attractions of the Afram Plains is the abundance of readily-available land of good quality.
There are two rainy seasons in a year in the Afram Plains. The first is the main wet season, starting in April and usually ending in the second week of July. Within this period, over three-quarters of the total annual rainfall is recorded. The minor rainy season occurs in September and October, and is followed by a long dry season from November to the end of April or early March. During the dry sea season there is drought which is accentuated by the harmattan weather so that most plants shed at least some of their leaves and many tributaries of Afram and Obosom Rivers dry up as well as some boreholes.
Generally, the hottest months are February and March (36.80C and 36.60C on the average respectively) while the coldest ones are December and January (19.90C and 20.10C on the average respectively).
Relative humidity values in the Afram Plains are generally highest in the mornings (06.00 hrs) and lowest around early afternoon (15.00 hrs). Relative humidity figure for both 06.00 and 15.00hrs are highest between April and October and lowest between November and May, which coincide with the rainy and dry periods respectively for the Afram Plains Kwahu Afram Plians. During the highest relative humidity periods and rainy season months of April to November, mean monthly relative humidity ranges between 81.6% and 71.6%. This gives an overall mean approximately 79.5%. During the harmattan months when relative humidities are low, mean monthly relative humidity figures of only 68.2% to 71.6% are recorded.
The Kwahu Afram Plains has the potential for the cultivation of non-traditional export crops such as ginger, black and hot pepper, cassava (for processing into gari), maize, yam, cashew, sunflower and citronella. With the abundant water from the Volta, Afram and Obosom Rivers, the District has the potential for the promotion of irrigation farming for cultivation of vegetables such as tomatoes, garden eggs, okra, onion, chili, cabbages and pepper.
Animal Husbandry involving the rearing of cattle, breeding of sheep and goats and keeping of poultry is very successfully practiced in the area, largely referred to as the food basket of Ghana whose predominant savannah vegetation is suitable for livestock production.
The size of the food and agribusiness sector is growing rapidly in Africa. It was roughly a $10 billion market in 2005 and is expected to grow to roughly $45 billion in 2030. Government, business and civil society leaders need to work together to jointly strategize how to meet the most pressing needs at a national and regional level and promote a sustainable direction for that growth. Governments and private sector investors can expand public-private partnerships, private-private joint ventures, farming cooperatives, farmers organizations and initiatives that focus on boosting yields, filling critical gaps along the food system value chain, and developing markets.
The Kwahu area abounds with several economic potentials especially in Agriculture and this is one of the critical areas that participants of the Kwahu Investment Dialogue (KID) 2023 being organized by Exodus to Africa in partnership with the Ministries of Food and Agriculture, Tourism and Culture, Trade and Industry as well as Foreign Affairs and Regional Integration will be expected to take advantage off as possible areas of for investment.
The Kwahu Investment Dialogue will focus on the Agricultural and Tourism potentials in the Kwahu enclave considering the growing global investors search for the conducive and business friendly environments for investments especially in Ghana. The five-day event will convene leaders from government and the private sector to promote a dialogue on the Agricultural and Tourism agenda that aims to increase investment and technical assistance support for the Kwahu enclave and Ghana in general. Leaders will share relevant experiences and showcase innovative practices. Agriculture and Tourism policy research institutions will share evidence on reform impacts, and business leaders will discuss reforms needed to increase private sector financing. The Kwahu Investment Dialogue will facilitate the discussion on how we can unlock investment financing opportunities for the transformation of Kwahuman through three strategic Pillars (Incentives, Innovation, and Investments) for improved local economies and jobs.