Mr Amos Safo-The Writer

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 imports

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.

Jospong Group

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:

  1. the provision of subsidized improved seeds to farmers,
  2. supply of subsidized fertilizers to farmers,
  3. provision of dedicated extension services,
  4. improved marketing strategies to mop up produce
  5. 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

following considerations:

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.

SOURCEBy Amos Safo
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