Home » Ghana Needs Over $1 Billion to Boost Food Security, Says Bank

Ghana Needs Over $1 Billion to Boost Food Security, Says Bank

A report by the Development Bank Ghana reveals the challenges and opportunities for improving the food security situation in the West African nation.

by Motoni Olodun

Ghana, a West African nation known for its stability and democratic governance, is facing a major challenge in ensuring food security for its population. According to a recent assessment by the Development Bank Ghana (DBG), the country needs a total of $1.04 billion over the next five years to reform its food value chains and reduce its dependence on food imports.

The assessment, which was part of DBG’s “mapping the value chain” initiative, identified four key sectors that require comprehensive reform: rice, soya, maize and poultry. These sectors are vital for meeting the nutritional needs of the majority of Ghanaians, as well as creating employment and income opportunities for smallholder farmers.

However, these sectors are also plagued by various constraints, such as low productivity, poor quality, high post-harvest losses, inadequate storage and processing facilities, weak market linkages, and limited access to finance and inputs. As a result, Ghana has to import large quantities of these commodities, especially rice and poultry, to meet its domestic demand.

The assessment estimated that the total financing gap for these four sectors is $354 million, as $686 million has already been secured from 13 development partners operating within these sectors. The funding will be used to support various interventions, such as improving seed and breed quality, enhancing irrigation and mechanization, expanding warehousing and cold chain infrastructure, promoting aggregation and trading platforms, and facilitating access to credit and insurance.

One of the key partners that DBG is collaborating with is the Ghana Commodity Exchange (GCX), a state-owned entity that aims to provide a regulated market for agricultural commodities. GCX is expected to play a crucial role in improving the efficiency and transparency of the food value chains, as well as ensuring fair prices and quality standards for both farmers and consumers.

However, GCX also faces some challenges, such as the need for more capital, infrastructure, and regulatory support. DBG’s Chief Economist and Head of the Economic Research Department, Dr. Kwabena Opuni-Frimpong, said that GCX would need about $200 million in seed capital to implement the proposed reforms. He added that DBG would explore ways to support GCX after internal deliberation, and also suggested the possibility of partnering with equity funders in the country, as has been done in Nigeria.

Dr. Opuni-Frimpong stressed the importance of addressing the food security issue in Ghana, as it has implications for national security, economic growth, and social welfare. He said that DBG was committed to finding solutions and supporting GCX and other stakeholders in overcoming the challenges.

The assessment was based on a series of multi-stakeholder workshops that DBG and its key partners conducted to address the market failures in the critical food supply chains. The workshops resulted in five main areas of focus: mapping the value chain, identifying SMEs for DBG and its partners’ pipeline, policy and regulatory reforms, financing, and implementation.

The implementation category consists of six main pillars, covering production-related recommendations, aggregation, warehousing, storage and trading, agro-processing, policy advocacy, capacity building, technical assistance and studies.

The assessment is in line with DBG’s five-year strategic plan, which aims to contribute to national growth and transformation by providing long-term financing and advisory services to key sectors of the economy, such as agriculture, industry, infrastructure, and housing.

Ghana is not the only country in the region that is struggling with food security. According to the Global Food Security Index, Ghana ranked 83rd out of 113 countries in 2022, while its neighbours Burkina Faso, Cote d’Ivoire, and Togo ranked 98th, 91st, and 92nd respectively. The index measures the affordability, availability, quality, and safety of food in each country.

The COVID-19 pandemic has also exacerbated the food security situation in many African countries, as it disrupted the supply chains, reduced incomes, and increased the prices of food. The World Food Programme warned that the number of people facing acute food insecurity in Africa could rise from 135 million to 270 million by the end of 2020.

However, there is also hope for improving the food security situation in the continent, as many initiatives and innovations are being implemented to address the challenges. For example, the African Continental Free Trade Area (AfCFTA), which came into force in January 2021, aims to create a single market for goods and services and boost intra-African trade and investment. The AfCFTA could also enhance the competitiveness and resilience of the agricultural sector, and foster regional integration and cooperation.

Another example is the use of digital technologies, such as mobile phones, drones, and blockchain, to improve access to information, finance, and markets for farmers and agribusinesses. These technologies could also help to reduce the costs, risks, and inefficiencies in the food value chains, and increase the quality and traceability of the products.

With these opportunities and potentials, Ghana and other African countries could achieve food security and self-reliance, and ensure that no one is left behind.

Source: GhanaWeb

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