Agric and its abysmal contribution to Ghana’s GDP

By giving the facts and figures about the contribution of agriculture to Ghana’s GDP (Gross Domestic Product) in years past, it is the writer’s hope that the reader will clearly see what governments continue to do or fail to do in weakening this very important sector of an economy.

Agricultural crops, including tubers(yam, cassava etc.), grains, cocoa, oil palms, kola nuts, shea nuts, and timber, form the base of Ghana’s economy. It has also been traditionally the largest employer of the Ghanaian population.

Labour force by occupation as at 2013; Agric – 44.7%, Industry – 14.4%, Services – 40.9%

Unfortunately, the contribution of agriculture, the backbone of Ghana’s economy, to the country’s Gross Domestic Product (GDP) has dropped by an alarming 12.8% in just seven years.

It dropped from 31.8% in 2009 to a mere 19% as of September 2015, a period of seven years.

The contribution of agriculture to GDP in the other years are: 2010 – 29.8%, 2011 -25.3%, 2012 – 22.9%, 2013 – 22.4%, 2014-21.5%.

It dropped from 31.8% in 2009 to 29.8% in 2010, representing 2% GDP contribution lost. In 2011, agriculture’s contribution dropped by 4.5% to 25.3% while 2012 recorded a 2.4% drop to 22.9%.

The year 2013 recorded a 0.5% drop in the contribution of agriculture from 22.9% in 2012 to 22.4% in 2013.

The contribution of the Agric sector to GDP growth recorded further decline of 0.9% in 2014, and as of September 2015, the sector had lost another 0.4% of its contribution to GDP.

The 2016 government policy problem

The contribution of the agriculture sector dropped further in 2016 as government cut its 2016 expenditure on the sector by GH₵40 million despite growth in the sector stalling to 0.04%  in 2015, when government had targeted 3.6% growth.

The year 2015, government’s budgeted expenditure on the agricultural sector was GH₵395.19 million while for 2016, GH₵355.14 million had been budgeted, indicating a 10.1% decrease.

By the end of September 2015, GH₵91.54 million had been spent out of the GHC395.19 million budgeted.

Out of the GH₵91.54 million spent, about GH₵82.57 million of this actual sector expenditure, representing 90.21%, was spent on poverty-focused expenditures.

In 2015, 90,000mt of fertilizer, out of a target of 180,000mt, was procured and distributed to farmers countrywide under the Fertiliser Subsidy Programme.

For 2016, a total of GH₵355.14 million had been allocated for this sector. About GH₵302.46 million of this allocation, representing 85.17%, was to be spent on the Fertiliser Subsidy Programme and the Agricultural Mechanisation Service Centres, among others.

The Ghana Statistical Service estimates that the sector will grow at an average of 3.3% between 2016 to 2018, indicating that the sector’s future remains far from bright as services and industry look to narrow agriculture’s contribution to GDP.

GDP contribution by sector as at 2016; Agric – 19.5%, Industry – 24%, Services – 56.4%

Ghana cannot continue to walk this path if we are serious about employment, modernizing our agrarian society and growing GDP.

 

By Abraham Lartey