Agriculture as engine of sustainable economic development in Ghana

Agriculture is the mainstay of most developing economies, underpinning their food security, export earnings and rural development. Yet, their agricultural production for the domestic and export markets has lagged behind, with growth in per capital output declining in recent times.

Slow production growth and sharp annual fluctuations in output have continued to be chronic problems for the developing countries, constituting the main causes of their persistent poverty and rising food insecurity.

As regards trade, the developing countries have continued to be marginalised in world agricultural markets, accounting for about five per cent of global agricultural exports.

The poor performance of agriculture in most sub-Saharan African countries is related to the many internal and external difficulties that these countries face as they seek to develop this sector and achieve their objectives of improving food security and increasing export earnings.

Their internal difficulties include low productivity, rigid production and trade structures, a limited skills base, short life expectancy and low educational qualifications, poor infrastructure and inadequate institutional and policy frameworks.

At the same time, with the growing integration of markets from globalisation and trade liberalisation, African economies have to operate in an increasingly competitive external environment.

They continue to export a narrow range of primary commodities that are highly vulnerable to instability of demand and deteriorating terms of trade.

Their inability to compete not only on world markets, but also on their home markets is reflected in their rising food import bills.

Revamping Ghana’s economy through agriculture

Reversing this decline and integrating the developing countries into the world economy represent enormous challenges: overcoming marginalisation from global markets; adapting to technological change; and coping with a new institutional environment.

But most of the African countries, particularly Ghana, has enormous untapped agricultural potential to meet these challenges, with considerable scope for more effective use of resources and higher productivity.

What is needed, therefore, is a renewed focus on agricultural and rural development.

Significant progress in promoting economic growth, reducing poverty and enhancing food security cannot be achieved in Ghana without drawing more fully upon the potential productive capacity of agriculture and its contribution to overall economic development.

With the support of development partners, the governments of developing countries may need to rethink their agricultural and rural development strategies if they are to achieve their social and economic objectives.

Way forward for economic empowerment

Recommendations for key actions to spur agricultural growth in the next decade are put forward for both African governments and their development partners, drawing upon past experience and success stories, and taking into account emerging domestic and global challenges.

The critical strategy must be to recapitalise agriculture, investing more heavily in this sector and in programmes to develop rural economic and social infrastructure.

Public investment needs to be directed in particular towards promoting agricultural research and extension, improving access to financial services, providing investment incentives and increasing access of the poor to support services and productive resources.

Strategic action plans for sustainable economic development

Governments in Africa must commit themselves to a coherent and comprehensive vision of agricultural and rural development. They need to design, implement and constantly review a series of priority and carefully timed measures necessary to boost investment in agriculture:

1. Maintaining sound and stable macroeconomic and trade policies that encourage investment in agriculture.

2. Strengthening human capital in rural areas through health and education services and access to productive resources.

3. Establishing a strong institutional environment that improves access to markets, ensures dissemination of information, sets standards and provides an adequate legal and regulatory framework.

4. Enabling research and extension services to develop productive and robust technologies under farm conditions.

5. Upgrading the marketing, transport and communication infrastructure to support farmers’ access to seasonal and longer-term capital and inputs and providing them with strong price incentives.

6. Safeguarding natural resource and environment capacity.
Such action on the part of African governments can be rendered more effective if their development partners take steps to:

• Increase grants and other forms of assistance to help developing countries meet public investment needs in agriculture. Current initiatives to provide financial assistance to African countries through targeted debt relief and other means could be partly channelled towards supporting efforts to develop the sustainable agricultural potential of Ghana, particularly by strengthening research and development, extension services, ensuring the availability of essential inputs and structured commodity finance, as well as providing marketing assistance.

• Support developing countries efforts to facilitate the transfer of technology and the flow of foreign direct investment that will improve agricultural productivity and competitiveness.

• Facilitate market access of African agricultural commodities in developed countries, notably by improving terms of trade, adapting multilateral trade rules to the institutional, human capital and infrastructural context of the developing countries, and assisting in developing product quality and pre- and post-production standards.

Conclusion

Strategies for action by African countries with the support of the international community that will help them exploit their agricultural potential by strengthening their supply capabilities and competitiveness, and thus take full advantage of the trading opportunities inherent in the multilateral trading system. Progress is crucial on three fronts: raising and sustaining productivity and competitiveness; diversifying production and trade; and improving access to foreign markets.

The writer is the Registrar of CIAGH