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Ghana: Opportunities For Agricultural Entrepreneurs

Ghana: Opportunities For Agricultural Entrepreneurs

Affluent Ghanaians see the arrival of Kentucky Fried Chicken arrival as a symbol of the country’s growing oil-fueled prosperity, according to a Bloomberg report.

But 60 percent of Ghana’s workforce employed in agriculture isn’t benefiting from the surge in demand for food from restaurants catering to the growing middle class.

Venkataraman Balakrishnan, a KFC manager, can’t find enough low-cost, high-quality chickens in Ghana and must order them from South Africa and Egypt. Potatoes for the French fries come from Belgium and Holland.

With thousands of young Ghanaians are flocking to oil and gas-related job fairs held in conference centers across the capital, yet agriculture outside basic grain production in the country is stagnant.

Historially, Ghana has always imported its food, said Shashidhara Kolavalli, a senior development strategy researcher at the International Food Policy Research Institute.

Ghana’s economic growth is expected to outpace the African average for a sixth consecutive year, but rural families aren’t getting the full benefit.

“Agriculture is not very dynamic,” he said. “Most of the money comes from donors and goes to budget support and policy meetings.”

In a country that produces oranges, “You can’t get fresh orange juice,” he said.

U.K.-based Blue Skies Holdings Ltd. this year imported pineapples and mangoes from neighboring Ivory Coast and Burkina Faso because Ghanaian farmers couldn’t supply enough, CEO Anthony Pile said in a phone interview.

“There’s a group of people who can afford to buy fresh juices, and that group is growing,” he said. “There is tremendous opportunity in Ghana, but we need a social mindset change, more entrepreneurial spirit when it comes to agriculture.”

Kenneth Quartey, founder of Sydals Ltd. – two of Ghana’s largest poultry farms – said his company has operated below capacity since imports of frozen chicken from Europe began flooding the market more than a decade ago. The price for imported chickens is about half the cost of those produced locally.

Ghana spends about $1 billion a year importing agricultural products to meet a growing appetite for consumer foods fueled by rising middle-class incomes and changing consumption patterns, according to the U.S. Department of Agriculture. A fifth of that – $200 million – was spent on shipping in frozen poultry.

Meanwhile, food exports of good such as cashew nuts amounted to $100 million.

“The consumer gets a variety from across the globe because imports are cheaper than producing here,” said KFC’s Balakrishnan.

While Ghana produces its basic grains including two million metric tons of corn in 2012 – twice local demand – it imports everything tomatoes, carrots, and onions to apples and dairy products such as milk and cheese.

In 2011, Ghana allocated less than 2 percent of its budget to agriculture, down from an average of 8.7 percent from 2003 to 2009, according to ONE, a U.S.-based non-governmental organization that tracks progress of a 2003 pledge by African leaders to spend 10 percent of their budgets on agriculture. The contribution of agriculture to gross domestic product fell to 22.7 percent in 2012 from 31 percent in 2008, according to Ghana’s Statistical Service.

Ghana’s oil exports from the Tullow Oil-run Jubilee field began three years ago,  Bloomberg reports. The government expects to more-than double output to 250,000 barrels a day by 2021 as the $4.5 billion offshore TEN project comes online in 2016.