Agricultural exports to Ghana

This page provides key information for exporting agricultural machinery, meat and grain products to Ghana: an estimated USD 625 million-plus market (2019).

Fast facts

The agriculture sector in Ghana is characterised as mostly smallholder farm operations with little modernization
The Ghanaian Ministry for Food and Agriculture has put in place multiple initiatives to assist farmers in increasing technology inputs under the 2007 Food and Agriculture Sector Development Policy
The Ghanaian government has undertaken a number policies to support domestic grain production and reduce reliance on imports
Local conditions and lack of modernization had led to unpredictable crop yields
A growing middle class in Ghana is increasing demand for high-quality fresh food

Machinery

Market Size

Australian manufacturers exported approximately USD 300,000 worth of agricultural machinery and equipment to Ghana from 2016-2019. (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019).

The agricultural sector in Ghana experiences unsteady growth due to poor crop yields, lack of modernization and poor infrastructure. Consequently, the sector decreased its contribution to GDP from 31.8% in 2009 to 15.3% in 2019. (Source: Oxford Business Group, Ghana Agriculture Research & Analysis 2020, 2020)

However, the market for agricultural machinery is underpinned by the government’s continuing commitment to modernize and optimize its agricultural output, as stated under the Food and Agriculture Sector Development Policy (FASDEP II, 2007).

Opportunities

Supportive Policy Trends

Ghana has low rates of technology uptake amongst its farming operations, the majority of which are small-holder and family run farms, characterised by unpredictable and insufficient crop yields. In order to increase crop yields, the government has introduced a multitude of policy initiatives aimed at accelerating modernization and optimization of farms through machinery adoption. These objectives are expressly stated under the Food and Agriculture Sector Development Policy (FASDEP II, 2007).

Agriculture Mechanization Services Enterprises Centres (AMSECs) launched in 2007 as a credit facility assists qualified private sector companies in purchasing agricultural machinery at a subsidized price and interest rate which in turn is rented to rural farmers at affordable prices. AMSECS are a key module under the Planting for Food and Jobs Initiative which aims to “promote food security and immediate availability of selected food crops on the market and also provide jobs”.
The Block Farm Programme launched in 2009, provides large blocks of arable land for the production of selected commodities, and provides farmers with subsidized mechanization services and inputs which are repaid in-kind by the farmers after harvest.
The Collateral Registry launched in 2011 is subsidized by the Central Bank and charges low fees to its users. The system is meant to provide information about “borrowers’ assets that are registered as collateral and reduce overall counterparty risk

In conjunction, these initiatives are evidence of a strong government-led trend towards mechanization for which Australian agricultural machinery exporters may assist with demand. In 2020, the Ministry of Food and Agriculture allocated USD 86.5 million towards agricultural development, which constituted 51% of the total MOFA budget of USD 167.2 million. (Ministry of Food and Agriculture, Planting for Food & Jobs 2017; and Food and Agriculture Organisation County Fact-Sheet on Food and Agriculture Policy Trends, 2015; Ministry of Food and Agriculture Medium Term Expenditure Framework 2020-2023, 2020).

Changing population

Demographic projections anticipate that the Ghanaian population will grow from 31 million in 2021 to 37.8 million in 2030. This growth will increase demand for food products and will continue to place strain on the agricultural sector, particularly in regard to efficiency. Therefore, the demand for agricultural technologies is likely to continue. (Source: Worldometer, Ghana Population (2021), 2021)

In addition to population growth, the middle class is expected to expand as Ghana continues to prosper under its Ghana Vision 2020 framework. A higher standard of living leads to a greater demand for higher quality foods, which in turn increases demand for more efficient agricultural machinery in the production process. (Source: Mordor Intelligence, Agriculture in Ghana, 2020)

Market presence and awareness

Australian exporters may be able to leverage the strong mining machinery export relationship that already exists with Ghana. This may help to overcome local resistance and distrust of unfamiliar equipment, which has contributed to low uptake in the past. Mining excavation equipment is a leading export from Australia to Ghana, totalling USD 32.4 million in 2019, indicating a familiarity with Australian-made machines. (Source: Observatory of Economic Complexity, Ghana, 2019)

Farmers have a history of importing large and powerful tractors which are not often suitable for small land plots. Therefore, increasing the availability of affordable and smaller-sized tractors is important. Farmers are often unaware of the different kinds of machinery available, leading to a lack of appropriately-sized equipment on farms. Australian agricultural machinery exporters who can supply appropriate machinery for the local conditions in Ghana are therefore at a competitive advantage. (Source: Diao, X & Takesima, H., Agricultural Mechanization in Ghana, 2014)

Challenges

Financial Barriers

Ghanaian farmers are constrained by a lack of credit in which to purchase machinery. Ghana has a long-held land tenure tradition, whereby land is communally-owned and not privately held. This presents a challenge to farmers who cannot use land as an asset to secure a loan which is needed to purchase machinery. (Source: Ministry of Economy and Industry, Agriculture Sector in Ghana Review Review, 2020)

The Ghanaian government has made efforts in recent years to rectify this problem, specifically the Agriculture Mechanization Services Enterprises Centres to provide credit, Block Farm Programme which supplies blocks of land and subsidised machinery, and the Collateral Registry, which centralises the collateral assets of potential borrowers to reduce counterparty risk. However, mechanization uptake has not significantly increased since the creation of these initiatives. (Source: Ministry of Economy and Industry, Agriculture Sector in Ghana Review Review, 2020)

Poor infrastructure

Poor road quality in rural areas poses a challenge for importers of large machinery from international suppliers. Advancement of infrastructure correlates with socio-economic regions, with southern metropolitan areas enjoying better roads whereas rural northern areas remain underserved. Sources: Ministry of Economy and Industry, Agriculture Sector in Ghana Review Review, 2020; and PWC, Ghana, 2013)

Local resistance and low awareness of benefits

Ghanaian farmers often resist adopting new technologies or investing into purchasing fixed capital assets from new brands. This issue has been fuelled by insufficient communication with farmers, who remain unaware of the machinery available to them - for example, the existence of smaller tractors which are more appropriate for smallholder farm operations. The traditional land tenure system, whereby land is owned communally by families, prevents the consolidation of land assets into larger operations, which are more appropriate for large-scale machinery.

Exporters who are able to communicate with local farmers and community organizations of the nature of machineries appropriate for small-scale farms are therefore at an advantage. Thus, exporters should consider methods by which they can establish trust with the local community. (Sources: Ministry of Economy and Industry, Agriculture Sector in Ghana Review Review, 2020; and Diao, X. & Takesima, H. Agricultural Mechanization in Ghana, 2014)

Competitive Environment

Ghana imported over USD 35 million worth of agricultural equipment and technology in 2019. Brazil and China currently dominate market share, with Brazil accounting for USD 16.2 million and China, USD 10.5 million (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019).

Key players include the American-based John Deere Inc., and their Brazilian branch, Mahindra, CNH Industrial, Kubota Corporation and AGCO Corporation (where the latter companies are from). Indian manufacturer, Farmtrac, has been historically favoured by government-led importers. (Source: Diao, X. & Takesima, H. Agricultural Mechanization in Ghana, 2014) - explain that its due to agreements)

Market Access

Machinery for agricultural purposes benefits from a tariff exemption. However, imports are still subject to a value-added tax, which is calculated on the value of the goods at rates corresponding to the harmonized system code of the commodity. (Source: International Trade Administration, Ghana - Import Requirements and Documentation, 2020)

Key distribution channels

There are two distribution channels for agricultural machinery in Ghana. The private sector-led supply chain network supplies machinery to farmers to rent out in farmer-to-farmer equipment sharing programs. Importers are characterised as medium- to large-holder farm owners and businesspeople. Many private importers seek second-hand machines, which are often cheaper than government-subsidised new machines. Private importers seek the opportunity to re-purchase from a familiar brand from which they have already imported from, as spare parts are easier to obtain. Medium- to large-holder farm owners hire out their mechanization services to smaller farms, which make up the majority of farming operations in Ghana. Smallholder farmers who use tractor hiring services, often consider themselves purchasing a tractor after 10 years.

Government-led channels refer to the Agricultural Mechanization Services Entreprise Center (AMSEC) Program. AMSECs are intended to procure tractors and sell/hire them at a subsidized price. Funding for AMSEC operations comes from concessional loans from leading manufacturing countries Brazil, China and India. A condition of these loans is that AMSEC uses the machinery produced by the lending country. (Source: Diao, X. & Takesima, H. Agricultural Mechanization in Ghana, 2014)

Meat

Market Size

In 2019, Ghana imported USD 92.7 million worth of meat products, and USD 749,530 worth of meat was imported by Australia, 94% of which was poultry. Ghana obtains over 50% of its poultry imports from Australia. Smaller exports of lamb, goat and preserved meats are also exported to Ghana. (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019; and Observatory of Economic Complexity, Ghana, 2019)

Opportunities

Growing hospitality sector

Imported frozen chicken meat is becoming more frequently consumed in Ghana. This demand is underpinned by two factors; the rapid growth in restaurants, hotels and fast-food sectors, who frequently serve chicken, and imported frozen poultry products are usually cheaper than locally produced products. (Source: The Ministry of Foreign Affairs, Analysis poultry sector Ghana, 2019)

Lack of Infrastructure

Local poultry producers and processors in Ghana lack the appropriate infrastructure and equipment to produce chicken cuts that are preferred by Ghanaian consumers. Therein lies opportunity for Australian exporters to leverage a relationship with the Ghanaian agriculture sector in providing necessary equipment and technologies for poultry production. (Source: The Ministry of Foreign Affairs, Analysis poultry sector Ghana, 2019)

Changing demographics

46% of Ghanaians are considered middle-class, compared to the continent-wide average of 34.3% (Source: African Development Bank, Africa’s Middle Class Triples, 2011). Western-style food preparation and fast-food outlets are increasing in popularity as a result, which frequently use imported chicken meat. (Source: Food and Agriculture Organisation, Chapter 7: The Rising Middle Class, 2013)

Consumption trends

Overfishing has greatly decimated seafood stocks in Ghana, which along with chicken, is a preferred source of protein. In 2018, Ghana imported an estimated USD 311 million in seafood and fish productions. Ghana currently imports about 50% of fish and fish products to supplement its total national catch. Ghana’s overexploited marine stocks are limiting domestic seafood production, creating a potential opportunity for Australian seafood exporters.

(Source: USDA Foreign Agricultural Service, Ghana: Fish and Seafood Report, 2019).

Challenges

Local preferences

Bushmeat from wild animals captured for food is a valuable and popular source of protein in Ghana. (Source: US Library of Congress, Regulation of Wild Animal Wet Markets, 2020).

More affordable sources of beef and chicken have been linked to a decrease in bushmeat consumption, indicating a domestic preference for other sources of protein. (Source: McNamara, J. Fa, J. E. & Ntiamoa-Baidu, Y. Understanding drivers of urban bushmeat demand, 2019)

Domestic Production

Domestic meat production in Ghana is small, reports estimating that the country only produces 10% of the meat it consumes. Since the outbreak of COVID-19 there has been a demand for domestic production of meat.

In 2020, Ghana’s Agricultural Development Bank has announced a USD 87 million loan in the support of the Ghanian government’s Broiler Revitalisation Programme which is aimed at increasing the domestic production of chicken. The programme is aiming to develop a strong local industry in the hope to end poultry imports in the next five years. This poses a challenge for international importers of poultry as demand for imported poultry declines. (Source: Euro Meat News, Ghana looks to end poultry imports in 5 years, 2021)

Competitive Environment

Ghana imports a large majority of their meat from Belgium, the United States and Poland. In 2019, Belgium, the United States and Poland dominated the market by importing approximately USD 37.8 million, USD 17.6 million and USD 8 million of meat to Ghana respectively. (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019)

Market Access

Importers of meat products must obtain a permit from the Veterinary Department. (Source: World Trade Organisation, WT/TPR/S/81, 2018).

The Ghanian Food and Drug Authority (GFDA) is the national regulatory authority that is responsible for regulating the manufacture, import, export, distribution, use, and marketing of food, drugs and food supplements ensuring their safety, quality and efficacy. All food products that are imported, advertised, sold or distributed in Ghana must first be registered with the GFDA.

The Ghanian Food and Drug Authority stipulate general requirements in relation to the import of frozen meat:

Frozen meat, fish, shellfish and other aquatic invertebrates that are imported, distributed or sold for local consumption must be registered with the Food and Drugs Authority under Part 7, section 97 of the Public Health Act
Only businesses duly licensed by the Food and Drugs Authority as an importer in accordance with Part 7, section 122 (1) of the Public Health Act are permitted to import products.
Storage facility for the supply of frozen meat, fish, shellfish and other aquatic invertebrates must be licenced by the authority in accordance with Part 7, sections 103 and 131 (a) of the of the Public Health Act
All importers are required to renew their company license with the FDA annually
Importers are required to secure an electronic permit for all imports/consignments of frozen meat, fish, shellfish and other aquatic invertebrates prior to importation

(Source: Food and Drug Authority Ghana, Import Permit, 2019)

Ghana applies a tariff of 20% on all imports of poultry products.

(Source: USDA Foreign Agricultural Service, Food and Agricultural Import Regulations and Standards Country Report, 2020)

Key distribution channels

There are three retail environments in Ghana for meat sales: supermarkets, convenience stores and open-air markets. In the context of open-air markets, retailers and wholesalers throughout Ghana converge to source products and then return to their respective hometowns to sell products locally. Most restaurants and hotels get their meat supply from traditional markets. Traditional markets have 60% market share of retail food.

Convenience/small grocery stores have 36% of market share for retail food. The supply of food for convenience stores is usually obtained from wholesalers located at traditional markets.

Supermarkets usually procure meat products from three possible sources, namely importers/distributors/agents, wholesalers or the sub-wholesalers. Supermarkets have 4% of retail food market share, a figure that is predicted to grow.

The first point of contact for entry into the Ghanaian market is usually the Importer/Distributor. An exporting firm could also appoint an agent or sign an agreement to make a local business entity the sole representative. It is worth noting that almost all the major importers own registered retail outlets, and as such exist and operate as distribution companies themselves. (Source: USDA Foreign Agricultural Service, Retail Foods Report Ghana, 2017)

Grains

Market Size

In 2019 Ghana imported approximately USD 27,980 in oilseed and oleaginous fruit, and USD 11,990 in cereal from Australia. (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019)

Ghana’s grain production cannot meet domestic supply and depends on imports. In 2019, Ghana imported over USD 522 million in cereals. Commodities in high demand include rice and wheat.

Wheat

In 2019/20 total wheat consumption was at 770,000 MT, and has steadily increased over the past decade due to increasing population, dietary habits, the growing middle class and urbanization. Hard wheat is preferred for bakery inputs as it produces fluffier bread, and the growing middle class have become accustomed to Western wheat-based products such as bread, pasta, biscuits and pastry. Projections for wheat consumption are thus predicted to rise, representing a nascent opportunity for Australian wheat exporters.

Wheat imports have been increasing at approximately 2% per year, from 906 megatonnes in 2018, 950 in 2019, and 990 in 2020. (Source: USDA Foreign Agricultural Service, Grain and Feed Annual, 2020).

Rice

In 2017/18 rice consumption was estimated at 1 million MT, and has increased alongside population growth. Rice remains a popular and increasing part of Ghanian diet due to its convenience and changing palates. Domestic production of rice in Ghana continues to fall short of demand, wth the import share of rice consumed remaining around 50%. There is a preference for imported rice in Ghana as it is seen as being of better quality, therein lies opportunity for Australian rice exporters who are recognised worldwide for its high quality.

Opportunities

Changing consumption patterns

The growth of a middle class who move away from consuming traditional starches such as cassava and yam towards rice and wheat-based convenience foods represents a burgeoning market for Australian grain producers.

Imported rice is preferred over local varieties, as it cooks faster and swells more. (Source: Food and Agriculture Organisation, Chapter 7: The Rising Middle Class, 2013).

Local conditions

Ghana’s cereal output fluctuates often as few farms have the appropriate machinery and fertilizer inputs to maximise yields. Yields are also highly dependent on rainfall, in the absence of water irrigation systems. These limitations indicate that Ghana is likely to have solid underlying demand for grain imports into the future to smooth consumption patterns.

(Source: Oxford Business Group, Investment in irrigation and technology supports Ghana's agriculture sector, 2020; and International Food Policy Research Institute, Ghana Strategy Support Program, 2014).

Challenges

Policy environment

The Ghanaian government has expressed a desire to obtain greater food sovereignty and to move away from reliance on food imports, as stated under the Planting for Food and Jobs Initiative. These objectives are also reflected in the Fertiliser Subsidy Programme, which subsidizes up to 50% of fertilizer inputs provided to grain farmers, a program which has been running since 2008. The government also introduced the National Food Buffer Stock Company, which establishes grain reserves by purchasing excess grain produced by farmers. (Food and Agriculture Organisation, County Fact-Sheet on Food and Agriculture Policy Trends, 2015)

Market Concentration

Australian grain exports are competing for market share against well-established grain importers in Ghana. The two key import commodities, rice and wheat, are supplied each by only a handful of countries. Australian exporters will have to overcome lack of recognition and offer extremely competitive prices to enter the market. However therein lies an increase in demand for wheat products in Ghana because of increasing population, urbanization and a growing middle class. This presents a sound opportunity for Australian exporters to participate in the Ghanian wheat market. The Australian wheat industry has an excellent reputation and is in demand in international markets, about 65-75% of Australia's total wheat production is exported each year.

Competitive environment

There is no cultivation of wheat in Ghana, therefore all available wheat on the Ghanian market is imported. The export market share is dominated by Canada at 52% (USD 79.9 million) Russia at 33% (USD 47.3 million) and the USA at 8% (USD 11.7 million).

The rice market is also highly concentrated, as Vietnam holds the largest market share of 69% (USD 268.4 million), with Thailand following at a further 12% (USD 60.4 million). (Source: UN Comtrade, UN Comtrade: International Trade Statistics, 2019)

The large market share held by Canada and Vietnam in the wheat and rice markets respectively, indicates a highly concentrated market with limited scope for market entry.

Market access

The import process in Ghana is hindered by a duplication of required documentation and antiquated legislation. Key players are: Customs Division of the Ghana Revenue Authority; the Ministry of Trade and Industry (MOTI); the Ghana Food and Drug Authority (GFDA);the Ghana Standards Authority (GSA);and the Ghana Port Authority.

Rice imports attract:

A duty of 20%
VAT 12.5%
ECOWAS levy 0.5%
EDIF levy 0.5%
Inspection fee 1.0%
GCNET 0.4% of CIF value
National Health Insurance Levy (NHIL) of 2.5%

Wheat imports attract:

A duty of 20%
VAT 12.5%
ECOWAS levy 0.5%
EDIF levy 0.5%
Inspection fee 1.0%
GCNET 0.4% of CIF value

The Ghanaian government has included a “National Health Insurance Levy” (NHIL) of 2.5% to be collected by the VAT Secretariat. (Source: USDA Foreign Agriculture Service, Grain and Feed Update Ghana, 2018)

Key distribution channels

Grains, cereals and related products can enter the Ghanian market in a variety of forms, specifically:

Bulk goods: wheat, coarse grains, rice, soybeans, pulses, peanuts;

Intermediate goods: wheat flour, soybean meal, soybean oil, vegetable oils, feeds & fodders;

Consumer oriented: snack foods, breakfast cereals, nuts.

These commodities can be understood as a direct-to-consumer product, such as a snack food, which would be distributed to food retail outlets such as supermarkets, convenience stores and open air markets. This requires collaboration with local distributors and wholesalers.

Bulk and intermediate goods function as inputs for value added processing in Ghana, such as supply of grain to manufacturers. (Source: International Trade Administration, Ghana - Agricultural Sectors, 2019)

International Freight Assistance

The International Freight Assistance Mechanism (IFAM) is a targeted, temporary, emergency measure put in place by the Australian Government in response to COVID-19.

Eligibility for products supported by IFAM is determined by a set of overarching principles rather than by specific commodities. These principles determine eligibility based on Australian-made or produced products that are:

high-value
time-sensitive
reliant on airfreight, for example, due to perishability or are:
- products that could not be sent by an alternative to airfreight without losing their essential product characteristics or value
- goods that have a limited shelf life or are required to meet a sudden or immediate need

otherwise deemed to be in the national interest

Given the economics of airfreight, low-value products are not likely to be eligible. For example:

products that are heavy and/or bulky
products that are conventionally (or could be) shipped by sea
where the market is not open to airfreight of the commodity
where export via air freight is not likely to be economically viable on an ongoing basis

More information about international freight assistance is available from Austrade.

Doing business

The way to do business is different in each country. Before you export, it is good to get familiar with the business environment and main economic features of the market you are interested in.

Business Environment in Ghana

Basic economic and trade information is available from the Department of Foreign Affairs and Trade’s Ghana page. On the page, you will also find Ghana’s fact sheet.

Strengths:

Sector-specific regulatory bodies, such as the Ghana Food and Drugs Authority.
A professional army and vibrant civil society; bodes vital for long-term political stability.

Weaknesses:

MOFA has institutionalised the effort to move the country away from reliance upon food imports under the objectives of the Planting for Food and Jobs Initiative from 2008.
Government gridlock might prove a challenge following the December 2020 election in which both major parties won exactly 137 seats each, with the balance of power held by a single independent.
A number of recent scandals have heightened concerns over corruption in Ghana and undermined the country’s previously high standing on governance and contract enforcement in the region.

Ease of doing business rank

The current ranking for Ghana is 118 out of 190.

Source: World Bank Ease of Doing Business index

Setting up

Australian companies setting up business in Ghana will have two options:

Subsidiary (often known as local company): is a limited liability company incorporated in Ghana and will be governed by Ghana Companies Act, 1963 (Act 179);
External company (often known as a branch): is governed by laws of the company incorporated country, and can only provide customer support, market research, feasibility studies, and assessing investment opportunities. This is often suitable for foreign companies to minimise risks.

(Source: Doing Business in Ghana, PwC, 2018)

Business Registration fees and detailed process can be accessed from Ghana Investment Promotion Centre.

Cultural considerations

In each country, the way people do business varies. You may need to adjust your expectations and be sensitive to how business is done.

Resources for doing business in Ghana:

Promoting your business

Australian exporters are encouraged to increase their brand recognition in Ghana through organising public events with target communities.

Australian exporters are highly encouraged to participate in trade missions and exhibitions in Africa to advertise and make contact with the Ghana Investment Promotion Centre.

Getting in touch with the Ghana High Commission Canberra will also be helpful to establish initial contact and business relations. The High Commission’s Trade and Investment page is an optimal launch point.

Visas

Australian travellers should consult Smartraveller, the Australian Government’s free online travel advisory service.

You are also advised to enquire directly with the Ghana High Commission Canberra’s Consular Services.

Intellectual property

Consult with an IP lawyer in Ghana. Austrade can refer you to a list of IP lawyers in Ghana. Contact Austrade on 13 28 78 or email info@austrade.gov.au.

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