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Why Is Ghana’s Agricultural Sector Contribution To Economy Sliding?

Why Is Ghana’s Agricultural Sector Contribution To Economy Sliding?

Ghana’s agricultural sector is contributing less and less to the West African nation economy, according to data provided by the Ministry of Finance.

The sector, which employs more than 45 percent of Ghana’s population, has been on a steady decline for the last seven years, reducing its contribution to the country’s GDP to 19 percent in 2015 from a high of 31.8 percent in 2009.

Sources: Ghana's Ministry of Finance
Agriculture contribution to Ghana’s GDP (Sources: Ministry of Finance)

According to Dr. Ebo Turkson, a senior economist at the University of Ghana, the country’s Agricultural sector contribution started falling after oil was discovered and the government shifted attention to the petroleum sector.

“We have neglected agriculture ever since we discovered oil,” Turkson told Pulse.co.ng.

“If you look at even the budget and the initiatives that government wants to pursue in 2016, there is not much for Agriculture. Once we don’t give a lot of attention to agriculture these are the results we will get.”

According to GhanaWeb, the Ghanaian government has cut its 2016 expenditure on agriculture by 40 million cedi ($10.4 million) to 355.14 million cedi despite growth in the agriculture sector stalling to 0.04 percent this year, when government had targeted 3.6 percent growth.

The role of the sector in Ghana’s economy appear to be falling down the pecking order, even as the government estimates that the economy will grow by 5.4 percent in 2016.

Finance Minister Seth Terkper indicated that only 91.54 million cedi out of the 395.19 million allocated to the sector in 2015 was spent, with 90 percent of that amount going to poverty-focused expenditure such as the Fertilizer Subsidy programme and the establishment of agricultural mechanization service centers.

Many fertilizer suppliers have boycotted the government fertilizer subsidy programme citing non-payment for products previously supplied.

Ghana, which was one of Africa’s economic stars with years of growth above 8 percent boosted by gold, cocoa and oil exports,  has since 2014 suffered fiscal instability as commodity prices fell globally, slowing its economic growth to below the average for sub-Saharan Africa.

A crippling energy crisis that has caused power outages across the country in the last three years has also hurt local enterprises as the cost of doing business shot up.

The Ghana Agricultural Workers Union (GAWU) has expressed concern about the consistent drop in the contribution of the Agricultural sector to the economy. According to the General Secretary of GAWU, Edward Kareweh, the  performance of the crop sub-sector is most worrying considering it has a direct impact on people’s livelihood.

“If you look at the fact that it is the crop sub sector that has to do with the basics of Ghanaians, example banana, cassava, maize and all the food stuffs consumed by Ghanaians particular those in the low income group , the definitely that should raise a concern for worry,” Kareweh told  Pulse.co.ng.