Channel efforts to mechanise farming - PwC analysis

BY: Ama Amankwah Baafi
Mr Vish Ashiagbor, Country Senior Partner, PwC Ghana
Mr Vish Ashiagbor, Country Senior Partner, PwC Ghana

The PwC Ghana has recommended that conscious efforts must be directed towards mechanising farming in the country.

It said the government must encourage large-scale farming and create an enabling environment for farmers.

“The various agric-related flagship programmes seem to be the bedrock of the growth estimated for 2021. The potential of import substitution on the back of a thriving agricultural sector can reduce the stress on the currency, resulting from massive imports,” it said in a sectoral analysis of the 2021 Budget Statement and Economic Planning Policy.

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Sectoral outlook

Pursuant to the Ministry of Food and Agriculture's agenda of ensuring food security post COVID-19 pandemic, an amount of GH¢1,183 million is allocated to the Ministry of Food and Agriculture (MoFA), representing a 22 per cent increase from the 2020 Budget.

In the PwC analysis, the sectoral outlook section highlights the key activities and interventions that the government intends to implement at the various Ministries, Departments and Agencies (MDAs) to achieve the budget theme.

Consequently, the key initiatives under the MoFA are: Continue to roll out programmes under the National Agriculture Investment Plan (NAIP); Develop the structures of the Tree Crops Development Authority and roll out activities to develop the sub-sector in support of the Planting for Export and Rural Development programme; Distribute agriculture machinery and equipment worth GH¢465 million to farmers to boost mechanisation development; and Complete 17 warehouses under the 'One- District, One-Warehouse' intervention to boost storage capacity for the anticipated increased projection under the PFJ programme.  

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Other initiatives are: Allocate GH¢457 million to the cocoa road's improvement programme and Set up the Cocoa and Shea Division of COCOBOD with an initial funding of GH¢64 million to improve the production of coffee and shea.

The government's strategy for the agriculture sector continues to be centred around the models under the NAIP.

According to the PwC, the government's determination to take full advantage of the African Continental Free Trade Area (AfCFTA) to produce more in Ghana and sell more to Africa and beyond, the increased investment in the sector was in the right direction.

“With the nation's food resilience having been proven during the pandemic,the government's focus on the Planting for PFJ programme should be re-directed towards increased production to meet the demands outside the country,” it said.

Sector growth

The agriculture sector grew by 4.6 per cent in 2019 and 5.7 per cent in 2020. The increased growth in 2020 was driven by improvements in the crops, fishing and livestock sub-sectors, which remained largely unaffected by the COVID-19 related restrictions and lockdown.

In 2021 and over the medium-term, it is expected that the crops sub-sector, followed by the fishing sub-sector will drive the target growth of four per cent per annum on the back of continued government initiatives in the sector.

Real GDP

The country's real Gross Domestic Product (GDP) growth dropped from 6.5 per cent in 2019 to 0.9 per cent in 2020. The decline in real GDP growth is explained by the reduction in economic activities following the outbreak of the COVID-19 pandemic.

“We expect the economy to rebound if the existing developmental initiatives and the ongoing vaccination programme are successfully implemented. To drive this, the government should focus on its flagship programmes and interventions including the One- District,One-Factory (1D1F), Planting for Food and Jobs (PFJ), Rearing for Food and Jobs (RFJ) and infrastructure expansion,” it stated.


In a commentary, the Country Senior Partner at PwC Ghana, Mr Viash Ashiagbor, noted that Ghana entered the pandemic with a strong economic growth momentum and was on course to achieving its medium-term macroeconomic targets.

However, he said the pandemic instigated economic slowdown across the globe and pushed the government to revise the overall real GDP growth target for 2020 downward from 6.8 per cent to 0.9 per cent.

“Growth however is expected to rebound in 2021 as the 2021 Budget projects a robust real GDP growth of five percent in 2021. Underpinning this growth are the expected 4.0 per cent growth in the agriculture sector, 4.8 per cent in industry and 5.6 per cent in the services sector,” he said.

He added, “While these growth projections are attainable, we believe that a key driver of this recovery will be the return of significant growth in private consumption and investments as well as exports growth (increased value of commodity exports).”

Mr Ashiagbor said the return to growth of exports in the services sector, especially a gradual recovery in tourism, remains crucial to the growth projection.

However, downside risks to growth exists, especially a weaker than expected pace of recovery in major economies and our key trading partners.

“The private sector will welcome efforts to achieve low inflation, a stable exchange rate, as well as lower interest rates that provide access to affordable credit,” he said.