No doubt, Ghana’s heavy dependence on imports, especially rice places tremendous pressure on
the Cedi, creating an unfavourable balance of payments position. On average, Ghana’s import
bill exceeds US$10 billion annually. The import bill is accounted for by a diverse range of items
that include agricultural products like rice, fish, poultry and palm. Other top imports iron, steel,
aluminum, sugar, oil, cement, fertilizers, pharmaceuticals, Toilet roll, toothpick, fruit juices.
While little can be done about imports like iron, petroleum and some categories of
pharmaceuticals, policy and financial interventions can be used to reverse Ghana’s huge imports
of rice, sugar and fish, which can be produced locally.
In the 2023 Budget Statement, the Finance Minister, Ken Ofori-Atta stated that Ghana has the
capacity currently to locally produce items that account for about 45 percent of the value of
annual imports. These include rice, fish, sugar, poultry, cement, pharmaceuticals, jute bags,
computers, etc. “To this end, Government will target these products for import substitution by
supporting the private sector, through partnerships with existing and prospective businesses to
expand, rehabilitate and establish manufacturing plants targeted at producing these selected
items”, says Budget Statement.
Rice is fast emerging as a strategic cash crop and a potentially political and economic tool in
Ghana due to its impact on the import bill. Ghana imports more than 60 per cent of its rice
needs, with dire economic and financial consequences. Between 2007 and 2015, the amount spent on imported rice rose from $151million to $1.2 billion annually. Currently rice imports stand at more than $1.3 billion, with domestic consumption supplemented by imports primarily from Thailand, Vietnam and India.
Rice consumption continues to increase due to the preference of Ghanaians for perfume rice over
local rice. According to statistics from MoFA, between 2008 and 2020, paddy rice production
was in the range of 302,000 MT and 987,000 MT (181,000 to 622,000 MT of milled rice) with
large annual fluctuations. The total rice consumption in 2020 amounted to about 1,450,000 MT which is equivalent to per capita consumption of about 45.0kg per annum.
According to a report by the Agriculture Research for Sustainable Development Ghana’s rice
self-sufficiency ratio declined from 38% in 1999 to 24% in 2006 and increased to about 43% in
2020. Despite the slight increase in production in 2020, a surge in local consumption makes a
compelling case for increased and sustained domestic production of good quality rice to improve
food security, import substitution and savings in foreign exchange. The government believes that
the negative narrative in the rice sector can only be changed with the injection of massive capital
by big sector players from the private sector.
Private sector response
One of the greatest news towards the end of 2022 was the decision by Government to use policy
direction to support private sector investment in local rice production for consumption and
export. This news was augmented by the decision of the Jospong Group of Companies to invest
in local rice production to support Government’s import substitution drive. Import substitution
aims at reducing imports of some foreign goods and to boost an economy by increasing the
demand for domestically produced goods. This reduces the demand for foreign currencies and its
effects on the depreciation of the local currency. The logic is simple: Why import goods when a
country can produce those goods locally and create employment for young population?
Honestly, it is unpardonable for Ghana to be importing over two billion dollars’ worth of rice
each year amid abundant land and water resources. Despite the ongoing inflation of Ukraine by
Russian, Ukraine continues to export about 74 million tons of grains, while Ghanaians continue
to blame everything, including unbridled prices hikes on the Russian invasion.
The Jospong Group of Companies’ (JGC) decision to invest in the rice sector has been hailed as
an impetus to the Government’s vision of ensuring that Ghana produces rice for local
consumption and for exports. In the view of the Minister of Finance, Ken Ofori-Atta, the JGC
initiative illustrates the ingenuity of a Ghanaian entrepreneur. “We will back this decision with
the various government and inter-ministerial financial support in a pragmatic way, so that we can
encourage more people to respond positively,” says, Mr Ofori-Atta when addressing a delegation
of investors from Thailand, led by the Executive Chairman of the JGC, Mr. Joseph Siaw
Agyepong on December 30, 2022.
In late 2022, a team of Jospong Group, led by its Executive Chairman, Joseph Siaw Agyepong,
visited Thailand to understudy the Thai rice sector and to possibly replicate their production
models in the country. Jospong Group signed an MoU with key sector rice players to establish of
a seed development and research centre, rice mechanisation centres, bio-organic fertiliser
production centres, supply of farm implements and rice mills in the country. The Group intends
to partner the Ghana Rice Inter-Professional Body (GRIB) and other local rice players to achieve
this vision. The project involved integrated rice farming methods ranging from seed
development, paddy cultivation, milling, packaging and marketing.
The JCC collaboration between JCC and Thai investors initiative is aimed that overturning
Ghana over reliance on foreign rice imports to the neglect of local production. The Thai
companies will provide technical and equipment support for the entire rice value chain in the
country with the aim of producing rice for the local and export market. The collaboration should
also provide value addition and market linkages and self-sustained models. However, some
economic analysts think Ghana’s rice initiative should be solely driven by Ghanaians. One
financial experts argue that if Thai producers are allowed to invest here, whatever they produce
is counted as foreign output, much as the investors will repatriate their profits.
Special rice initiative
In recent years, the Government has made conscious effort to transform the entire agricultural
sector into a vibrant and high yielding sector. Recent policy interventions have focused on the
Special Rice Initiative to bring improved rice seeds to farmers across the country, as a first step
to reverse Ghana’s huge rice imports. The rice sector has become a priority due to its impact on
Ghana’s import bill. In response, the Ministry of Food and Agriculture has facilitated the
revision of the National Rice Development Strategy (NRDS) to achieve self-sufficiency by 2024.
Besides, the Ministry of Food and Agriculture and the United Nations Industrial Development
Organization (UNIDO) have launched the “Improving the Technology and Quality Control
System for Higher Addition in Post-Harvest Processes of Rice Value Chain.” The project is
expected to upgrade the quality assurance systems along the rice value chain, focusing on the
post- harvest processes and crop management. With private sector players like Jospong Group of
Companies embracing the initiative these interventions will no doubt contribute to meeting rice self-sufficiency in Ghana in 2024.
Planting for food and jobs
Furthermore, the Government should not take its eyes off the “Planting for Food and Jobs” (PFJ)
Campaign. PFJ draws its roots from “Investing for Food and Jobs”, which has rice as one of the
focus crops. The overall objective of the “Planting for Food and Jobs” Campaign is to stimulate
interest in agriculture as a viable and job creation activity for the youth. The Campaign is
anchored on five pillars:
- the provision of subsidized improved seeds to farmers,
- supply of subsidized fertilizers to farmers,
- provision of dedicated extension services,
- improved marketing strategies to mop up produce
- an electronic platform to harness all activities in food and agriculture.
Taking a cue from Nigeria
Ghana needs to draw some lessons from Nigeria, by way of boosting local production and weaning herself from foreign rice imports over a three-year span as recently announced. In 2015, the Nigerian Government implemented a policy decision to ban rice importation, despite rising local consumption. Import of rice in 2012 to 2013 were estimated to reach about three million tons in Nigeria, but this did not deter the Nigeria Government taking the local initiative.
In Nigeria, as in Ghana, rice remains an important inevitable diet for the local population.
Against this backdrop the Nigerian Government based its policy on rice production on the
Firstly, on food security, it was recognized that if the country produced significantly to cater for
its domestic consumption and perhaps even exports, the food crisis bedeviling Nigerian would be solved.
Secondly, on employment generation, it was recognized that not only would mass rice
production provide food security, but it would also trigger employment generation. The high
level of importation of milled rice products in Nigeria had the capacity to create jobs for more
farmers and decrease job creations in exporting countries like the USA, Thailand and India.
Thirdly, on foreign exchange earnings, it was envisaged that if Nigeria fully harnessed its
agricultural potentials and boosted rice production for domestic consumption and for exports, the
country would earn more foreign exchange and stabilize the Naira. This would also complement
other earnings accrued from the country’s petroleum products; that remained the major income earnings.
Generally, Nigeria recognized that mass rice production would not only improve food security, it
would also enhance employment creation and stimulate economic development. I believe that the
reasons Nigeria assigned for embarking on the major policy reforms in rice production apply to
Ghana, as both countries share social and economic characteristics. I just hope that the Government of Ghana will not crack under pressure from her western donors to disinvest in rice production for food security and employment creation. Local food self-sufficiency is the surest step out of the current economic hardships confronting Ghana.