Boost for commercial agriculture in Ghana
The World Bank has approved a US$100 million credit to support Ghana in scaling up the development of commercial agriculture in the country. USAID is also providing a grant of US$45 million to support the implementation of the project.
The project seeks to facilitate access to land, strengthen Ghana’s investment promotion infrastructure for attracting agri-business investors, and promote public private partnerships and small-holder linkages in the Accra Plains, the Savanna Accelerated Development Authority (SADA) Zone.
Ghana is currently implementing a nation-wide Food and Agriculture Sector Development Policy (FASDEP II – 2010 2015) focusing on six priority themes. These are food security and emergency preparedness; increased growth in incomes; increased competitiveness and enhanced integration into domestic and international markets; sustainable management of land and environment; science and technology applied in food and agriculture development; and improved institutional coordination.
The Ghana Commercial Agriculture Project (GCAP) is designed to support the implementation of these priorities comprised four main components.
The first component will see the strengthening of investment promotion infrastructure, and facilitate secure access to land (US$11.8 million; to be complemented by USAID co-financing of US$5.9 million). This is expected to promote a secure investment climate that clarifies and strengthens the rights and obligations of investors, government and affected communities, and also support an improved mechanism for facilitating access to land by reducing the search costs to potential investors through an expansion of a database of land suitable and available for investors, and by building on nascent mechanisms for actively matching potential investors with suitable land owners.
The second project component is focused on securing Public Private Partnerships (PPPS) and small-holder linkages in the Accra Plains (US$45.4 million) and would conclude transactions for PPPs in an irrigation investment in the Accra Plains. The project area includes the existing Kpong Irrigation Project (KIP) as well as an expansion of an additional 7,000ha under a PPP arrangement, inclusive of commercial anchor farms and associated out-growers.
The third component is about securing PPPs and small-holder linkages in the SADA Zone (US$29.3 million; to be complemented by USAID co-financing of US$35.0 million). This component will involve support to the identification and realisation of private investments in inclusive commercial agricultural arrangements in the agricultural value chain through PPPs, complementary public investments, and technical assistance concentrated in the SADA zone.
The fourth component involves project management including monitoring and evaluation (US$14.3 million; to be complemented by USAID co-financing US$7.2 million). This component finances the operations of the project implementing agencies. It will also finance the various monitoring and evaluation and community engagement and communications functions.
Chris Jackson, Senior Economist and project Task Team Leader said the project reflects the World Bank’s continued support for Ghana’s agricultural development. “By focusing on socially inclusive commercial agriculture it will improve the enabling environment for farmers, while also making sure that local communities can participate in new agriculture based opportunities,” he noted.
According to Jackson, by strengthening the arrangements by which investors secure land, it would reduce investor risks and promote benefit sharing arrangements. He also noted that the geographical focus promotes a balanced development between the high-potential Accra Plains and under-exploited areas in northern Ghana.
The project will have two main ecological areas of focus: the Northern Ecological Zone (SADA zone) that will primarily support the development of value chains in areas with a good potential for agricultural growth, and the Accra Plains targeting areas including 11,000ha mainly for irrigated cultivation.
“In both intervention zones the project will promote contract farming and support the establishment of out-growers schemes for various agriculture commodities,” the World Bank statement issued in Accra on Monday said.
Ghana’s Former Minister of Food and Agriculture, Kwesi Ahwoi, said the project “…is a key pillar in our efforts to modernise agriculture. The Accra Plains, the SADA Zone and other ecological belts in the Western and Eastern Corridors have huge potentials which we need billions of dollars to fully harness”.
“By supporting out-grower schemes and contract farming arrangements, this project will help connect our small farmers to markets and strengthen key value chains. It will also increase the production of rice and maize to help the country to become self sufficient in these crops”, the Minister added.
Besides, the US$100 million, USAID is providing a grant of US$45 million to jointly support the implementation of the project through the promotion of inclusive market growth and leveraging the resources and expertise of the private sector toward a common pursuit of improving food security in the SADA region of Northern Ghana.
This the statement noted was a key pillar of the U.S. Governments new Feed the Future strategy for Ghana and will seek to build from the experience of Ghana’s U.S. funded Millennium Challenge Corporation program which closed at the end of February, 2012.
Feed the Future supports country-led processes for food security and agricultural development.
“I am glad we are scaling up our support for Ghana’s agricultural sector. Ghana has great potential to become a leading food producer in the West African sub-region. What we all have to do is to put serious traction behind this project to help create more jobs particularly for rural folks and women, and ultimately bring more agricultural products to the markets,” said Yusupha Crookes, newly appointed World Bank Country Director for Ghana.