Agric budget too small for impact - CEO asserts at PWC post-budget forum

The Chief Executive Officer (CEO) of Agri-Impact Group, Daniel Acquaye, has stated that the budget allocation to agriculture is inadequate for driving national economic transformation.

He said with only GH¢1.5 billion (approximately $100 million) allocated to agriculture, out of the GH¢279 billion national budget, the sector received just 0.54 per cent of total government spending.

Speaking at the PwC post-budget digest in Accra yesterday, the CEO of the impact investor in the agriculture sector, said achieving rice self-sufficiency alone would require over $100 million in investment, effectively consuming the entire current agricultural budget.

Mr Acquaye said the underfunding contradicted the government's stated goal of using agriculture as a foundation for economic transformation.

Background

In 2014, African Union members signed up to commitments which have become known as the Malabo Declaration to accelerate agricultural growth and transform the sector for shared prosperity and improved livelihoods.

Under the Comprehensive African Agricultural Development Programme (CAADP), part of an Agenda 2063 continental initiative, the member countries agreed to allocate at least 10 per cent of national budgets to agriculture and rural development, and to achieve agricultural growth rates of at least six per cent per annum.

Underlying the investment commitments are targets for reducing poverty and malnutrition, increasing productivity and farm incomes, and improving the sustainability of agricultural production and use of natural resources.

Agric Fund

The Agri-Impact CEO also added his voice to calls to establish an Agricultural Fund, similar to the Ghana Education Trust Fund (GETFund).

Mr Acquaye argued that while the country successfully produced skilled labour through education, there was no corresponding investment in sectors such as agriculture that could employ those graduates.

He said properly funding agriculture would reduce youth unemployment, improve food security, and drive rural economic development, ultimately strengthening Ghana's entire economy.

Mr Acquaye observed that while the mining and oil sectors were good as they boosted the country’s Gross Domestic Product (GDP), they did not provide transformational growth.

“We need mining, we need the oil sector. It makes our GDP growth look good. But if you generate $1 billion from mining or you generate one billion dollars from oil, it is not the same as generating $1 billion from agriculture,” Mr Acquaye, whose company is leading a number of youth-focused impact projects in the agricultural sector, stated.

“This is because to generate $1 billion from agriculture, the multiplier impact will be higher,” Mr Acquaye said.

On how the Agriculture Fund should be funded, he said “we have developed means of funding education. There is a formula that puts money into GETFund. We can use similar formula to put money into agriculture.”

Big Push

The Senior Country Partner of PwC Ghana, Vish Ashiagbor, contributing to the discussion, said a look at the nominal amount dedicated to agriculture might look insufficient, but there were critical infrastructural development projects under the GH¢10 billion “Big Push” project and other projects that would benefit the sector.

“If you look at it then absolutely it is quite small, which looks strange, given that we're trying to push agriculture as one of the pillars of growth for our economy.

“However, the other factors around infrastructure, around the drive towards creating agri-zones, all of those will enable agriculture.

So, government does not need to necessarily invest directly in agriculture itself, but to the extent that they create the environment that allows private sector to thrive in agri-zones,” he explained.

Good budget

Mr Ashiagbor described the 2025 budget as a good start and a nice statement of intent.

He expressed the confidence that a successful implementation of the proposed measures could create a more favourable environment for private sector growth, something he noted, had been recognised as the engine of growth, but had remained elusive due to persistent economic challenges.

Mr Ashiagbor highlighted implementation as the critical factor that would determine whether the budget's business-friendly intentions translated into tangible economic benefits. 

Growth, sustainability levy

Commenting on the increase in the Growth and Sustainability Levy to three per cent, the Senior Country Partner said mining companies typically made investment decisions based on long-term planning.

Mr Ashiagbor said making sudden tax increases and extended levy periods particularly disrupted their operations and anticipated returns.

He, however, acknowledged the government's challenging fiscal position, noting the pressing need to balance revenue collection with expenditure demands.

That difficult balancing act, he stated, required ongoing dialogue between the government and industry to foster mutual understanding and potentially identify win-win solutions that satisfied both revenue requirements and business stability needs.

The PwC Senior Country Partner referenced the minister's characterisation of recent mining sector profits as “a windfall” due to the record high commodity prices, though he acknowledged that the minister stopped short of using the term "windfall tax."

That framing, Mr Ashiagbor said, had made the sector a target for increased taxation during profitable periods.