Banana producers warn of threat from foreign competitors

Banana producers have said competition from Latin America, where production levels are very high with developed infrastructure and enjoy economies of scale, continues to be a threat to the industry’s international markets.

Banana export from Ghana has grown from about 3,000 tonnes per year in 2007 to over 70,000 tonnes in 2017, positioning the commodity as second to cocoa and oil palm in agricultural produce exports. Banana remains the single most important non-traditional export crop and employment generator, engaging over 5,000 direct employees in the Lower Volta Region of the country.

Managing Director of Golden Exotic Limited, Mr. Benedict Rich, in an interview with B&FT after the inauguration of Banana Producers Association of Ghana at Kasunya, Asutuare, in the Greater-Accra Region explained: “Our industry really has the capacity to make a major impact on the Ghanaian economy, but to do that we have to scale-up to the level of our neighbors in Cameroun and Ivory Coast – who are producing and exporting four and five times our total volume of about 70,000 tonnes.

“In Ghana, banana producers have always cooperated at all levels; but the threats we now face on the international market require that we do better than that. Besides, we face constantly changing legislation which sometimes negatively impacts our business in our main market of Europe.”

Government, according to Mr. Rich, has been supportive of the fruit exports industry – with policies and programmes such as the Ghana Free Zones Act and provision of the Export Fruit Terminal at Shed 9 Tema Harbour – but more needs to be done to realise the horticultural industry’s enormous potential.

Outlining some major challenges facing the banana industry in the country, Mr. Rich called for major improvement at the port of Tema because the cost of operations too high and act as a disincentive to investment in the fruit industry.

He added: “Energy cost at Tema Port is three times that of our neighbours in Ivory Coast and Cameroon. Access to the port is becoming a problem due to excessive traffic on the main route. This makes it difficult to have a quick turnaround for out-going trucks.

“We note that something is being done, but all these add to our logistics cost and affects our competitiveness on the international market.”

He explained that the original intention of the Ministry Food and Agriculture, in providing the Export Fruit Terminal at the Port of Tema as a promotional tool to support the fruit industry, has largely been defeated by the shaving-off a large portion of the facility – which has been handed over to a private company without any consultation or knowledge of the industry.

For such an important facility that is at the last end of a long chain starting from planting, it is important the industry be directly involved in what goes on at the port – including controlling cost to remain competitive, he said.

“The uncertainty of how the cost of operations at the port will evolve is a worrying situation for all exporters in the fruit industry, and the Ministry of Food and Agriculture needs to do something about this fast,” he said.

Deputy Minister of Food and Agriculture in Charge of Horticulture, George Oduro, commended banana producers for their rapid evolution and growth of the industry and putting the country on the international market through their massive scale-up of production and export of the fruits.

He indicated that success of the industry through hard work and perseverance has clearly inspired new investors, such as Golden Exotics and Musahmahat.

“I am reliably informed that 20 percent of the country’s banana exports go to fellow West African countries of Senegal, Burkina Faso, Niger and Benin. This is significant, given that the achievement gives great impetus to the efforts and objective of promoting regional trade in line with the goals of ECOWAS,” he said.

Production and export of banana from Ghana was started by Volta River Estates in 1994. The industry was faced with huge challenges under the EU country-specific quota agreement tariff regime for banana exports from African, Caribbean and Pacific (ACP) countries into the EU: making it unattractive for newcomers to venture into the industry until some significant changes took place in the EU Banana Tariff Regime In 2005.

With the establishment of two major banana plantations – Golden Exotic Limited and Musahmahat Farms Limited in 2014 – banana exports from the country have grown significantly.