Set up national raw material council - AGI to government

The Association of Ghana Industries(AGI) has suggested that government should establish a National Raw Material Council to address the age-long problem of shortage of local raw materials, especially during the lean production seasons.

This was among others recommendations raised by the group in a press statement in relation to 2019 budget statement as regards the Agric sector.

Below are the details of the press statement:

IMPLICATIONS ON THE AGRIBUSINESS SECTOR

INTRODUCTION

The Agribusiness Sector of the Association of Ghana Industries-AGI wish to commend the Minister for Finance for presenting the 2019 Budget Speech of the Government of Ghana dubbed a STRONGER ECONOMY FOR JOBS AND PROSPERITY.

As the Agribusiness private sector, we consider and envisage our farmers as autonomous entrepreneurs and their organizations as farmers’ business organizations who have to operate and deal with a range of public and private sector players such as sourcing companies, banks, agro-input dealers and many others. This reinforces the role of the Agribusiness in being the backbone of our economy.

AGI wish to commend the bold steps being taken by the Government of Ghana to support the Agro-industry especially with the Launching of the Ghana Commodity Exchange which by extension is expected to promote private sector investment in industry and agriculture and open up market opportunities for farmers and stakeholders in the agribusiness.

In the budget statement, the Minister intimated that Ghana spends over $2billion on food imports annually i.e.

– Rice – 1 billion

– Sugar – 320 million

– Poultry – 374 million

According to the Honourable Minister, it is the Government’s key goal to replace a significant fraction of these and other imports with domestic products in the medium term. In paragraph 169 of the budget speech, the Minister spelt out that the Roadmap for the Agric Sector is to set up Tree Crop strategy (Tree Crops Development Authority).

OUR CONCERNS

We, therefore, wish to make a few comments and appeal to the Government to consider, as it seeks to implement the budget.

1. The agricultural sector is still very informal and there is the need for further skills development in the sector that will benefit the industry.

2. We need to ensure that the Tree Crop Authority initiates its role as a development partner rather than a regulator. Regulation becomes secondary and should be based on self-regulation through private sector with the support of the authority. The development partner approach will aid in strategic plans to increase production and address any issues.

3. There is need to have a clear understanding of who manages the fund and how this fund will be operated and ploughed back into the sector similarly to other Countries where the fund is used to incentivize local processing which in turn will lead to further investors wanted to be a part of the processing part of the value chain.

4. The Government should make the GIRSAL (Ghana Incentives-Based Risk Sharing System for Lending) more functional to benefit stakeholders in the industry.

5. On the Industrial policy of government, we wish to state that local raw materials supply is still a major challenge in Ghana. Farmers do not usually produce at the right quantities and qualities the industry requires hence market access becomes very difficult for small holder farmers. Prices are also not competitive.

6. We need to collectively ensure that any levies that are being considered are discussed and go through a monitoring and regulatory body that comprises of both the Government and Private sector. The role would be to ensure that any raw materials levies or proposals do not go in favour of neighbouring markets and hamper our market opportunities.

7. As the government seeks to implement the One District One Factory policy, she should focus on increasing productivity especially for commodities that Ghana has comparative advantage to check the temptation of importing raw materials into the country that may further aggravate the plight of the Cedi. We recommend that the government must as a matter of urgency, establish a National Raw Material Council to address the age-long problem of shortage of local raw materials especially during the lean production seasons.

8. On Agric financing, the AGI wish to state that credit to the agribusiness sector is abysmally very low and the government must provide special purpose vehicles that will target specific commodities for special funding. Government should speed up the proposal to merge ADB and NIB to set up an Industrial (Development) Bank that will focus on agriculture to realize government’s industrialization efforts.

9. Government should focus on the massive commercialization of commodities that will provide ready source of local raw materials for industrial processing. The country imports raw materials for industry which can be readily produced locally to reduce cost of doing business in Ghana.

10. We wish to appeal to government to as a matter of urgency, focus on commodities where we have comparative advantage for instance cassava, yam, cashew, shea, oil palm, layers, piggery etc. these are intermediary goods that can be targeted for agro-processing

CONCLUSION

The AGI is willing and ready to support government as it seeks to implement the agenda for job creation and Ghana Beyond Aid.

As a leading voice in the Private Sector in Ghana, we will continue to strengthen the cooperation and provide constructive critiquing where necessary to support agro-industrialization in Ghana.