Decline in agric worrying; sheds 10% of GDP growth in 5yrs

Experts have warned that the Ghanaian economy will continue to decline due to the lack of attention paid to the agriculture sector, which has been the backbone of the economy for decades.

The contribution of the agriculture sector to Gross Domestic Product (GDP) has dropped by a whopping 10% in five years.

It dropped from 31.8 % in 2009 to 29.8% in 2010, 25.3% in 2011, 22.7% in 2012 and 21.3% in 2013.

The contribution of the agriculture sector is likely to drop further this year as government failed to deliver on fertiliser subsidies.

In addition, government allocated only GH?306,891,987 to the Agriculture Ministry in the 2015 budget while Interior Ministry had as much as GH?1,013,251,214 and Defence Ministry got GH?687,254,558 far more than the agriculture ministry.

At the Second Ordinary Assembly of the African Union in July 2003 in Maputo, African Heads of State and Government endorsed the “Maputo Declaration on Agriculture and Food Security in Africa” (Assembly/AU/Decl. 7(II)).

The Declaration contained several important decisions regarding agriculture, but prominent among them was the “commitment to the allocation of at least 10% of national budgetary resources to agriculture and rural development policy implementation within five years.”

Speaking to The Finder, Deputy General Secretary of General Agricultural Workers Union (GAWU) of Trades Union Congress (TUC), Mr Edward Kareweh said so long as the budget pays less attention to agriculture, the overall national development would continue to be compromised.

What is even more worrying, he said, was that the few good policies in various budgets have also not been implemented.

For example, he said, last year’s budget provided for irrigation facilities, including irrigation of the Accra Plains, but they were never implemented.

“Ghana’s economic woes are a reflection of the state of agriculture in the country, which has been characterised by under-investment, application of outmoded technologies, and use of rudimentary agricultural equipment.

“It is also the result of poor application of technology, no strong linkages between agriculture, industry and services sectors,” he said.

According to him, the development of agriculture directly correlates with expansion of industry and the services sector.

Mr Kareweh said that on the other hand, expansion of the services sector would not necessarily result in the expansion of the agriculture sector because the growth in the services sector in recent years was largely based on financing of imports, which suppresses domestic market for agriculture.

He explained that for budget to serve as a policy framework to induce national development, it must be anchored on agriculture, with strong linkages to industry.

“That is why GAWU advocates for a policy paradigm shift that will oblige financial institutions, particularly banks, to provide a certain percentage of their loan portfolio to agriculture.

“This will certainly address the credit deficit that characterises agriculture productions in the country,” he stated.

The Deputy General Secretary of GAWU said if manufacturing and industry were expanding to absorb employees in the agriculture sector, then that would have been acceptable.

However, that is not the case as the contributions of agriculture, manufacturing and industry to GDP growth have all been shrinking, resulting in a declining economy and rising joblessness.

He said government’s failure to explain in the budget why it could not implement the fertiliser subsidy programme this year was disingenuous and reflects a lack of accountability to farmers.

Mr Kareweh said inadequate budgetary allocations for the sector undermine its capacity to expand and create more jobs, despite the fact that agriculture has the propensity to create more jobs than other sectors.

According to him, large numbers of unemployed youth have low skills, thereby making them not qualified for high-skilled jobs in the services sector, saying “they are best suited for the agriculture sector.”

“The quest for the country to reduce poverty significantly is hampered by the lack of job opportunities in the agriculture sector and the declining contribution of the sector to GDP growth.

“This is so because poverty is predominant among people with low skills and low educational background, including peasant farmers who could otherwise be catered for by agriculture,” he stated.