How Ghana is supporting sustainable expansion in agriculture

With an estimated 44.7% of the workforce employed in the agriculture sector, farming, forestry and fisheries are not only central parts of Ghana’s economy but are key parts of society. Many of the individuals employed in the sector are smallholder farmers, producing a wide variety of products, from coconuts to rice. The country is also the world’s second-largest producer of cocoa beans, after Côte d’Ivoire.

The importance of strengthening the sector was brought into stark relief by the Covid-19 pandemic, during which local food prices increased in some parts of the country. Meanwhile, the impact of climate change and deforestation continues to strain future growth. The government recommitted to addressing these issues at the 2021 UN Climate Change Conference, and specifically pledged to end deforestation by 2030. As the economy recovers from the pandemic, agriculture stands to benefit from renewed private investment and government support.


Even as the country holds a key position as a producer of cocoa, the development of value-added activities related to processing agricultural commodities remains nascent. This represents not only a challenge for the sector, but also an opportunity for investors aiming to enter the market. Indeed, bridging this gap has been a priority of the government, which has worked to facilitate greater valued added in goods produced at home.

Another challenge to development is the fact that the sector is dominated by small, traditional, family-run farms. Under this structure, farmers often produce small surpluses, while their access to capital and machinery remains limited. Government efforts have therefore prioritised increasing productivity and access to finance – whether through digital or conventional offerings – while developing both hard and soft rural infrastructure. The development of transport infrastructure in rural areas has been especially pressing, given its importance in reaching central and urban markets, reducing food waste and facilitating the use of mechanical equipment.

Economic Contribution

According to data from Ghana Statistical Services, agriculture’s contribution to GDP was 21.8% in 2015, rising to 22.5% a year later and declining to 18.5% in 2019. The figure recovered in 2020, reaching 20.5% of GDP, at a value of GHS73.8bn ($12.6bn). The overall downward trend was at least partially attributed to the rapid growth experienced by Ghana’s mining and energy sectors over the same period. The segment with the largest contribution to economic output in 2020 was crops, accounting for 16.6% of GDP, or GHS59.9bn ($10.2bn); followed by livestock at 1.7% of GDP (GHS6.1bn, $1bn), forestry and logging at 1.1% of GDP (GHS4.1bn, $700.7m), and fisheries at 1% (GHS3.7bn, $632.3m).


There are five main types of crops produced in Ghana: roots and tubers; cereals; legumes; fruits and vegetables; and tree crops. These products are grown across four agro-ecological zones: the northern savannah, spanning around 62% of the country’s land area; the transitional zone; a deciduous forest; the evergreen zone; and the southern, coastal savannah. The climate is tropical, with two rainy seasons in the south – March to July and September to October – and one in the north (May to October). Most tree crops are grown in the more forested south, along with water-intensive crops. In the northern areas of the country, roots and tubers are more predominant.

In 2019 the country had 12.6m ha of agricultural land, down from 13.9m ha in 2000, as well as 8m ha of forested land, down from 8.8m ha over the same period, according to the most recent figures from the UN Food and Agriculture Organisation (FAO). The majority of output is rain fed, with only 36,000 ha of agricultural land equipped for irrigation as of 2019. This makes the sector vulnerable to climate change, especially considering that the country’s water stress level increased from 4.3% in 2000 to 6.3% in 2018.

Of the 8.1m ha of land harvested in 2019, 2.2m ha was set aside for cereals, 1.8m ha for roots and tubers, and 1m ha for oil crops. In terms of acreage planted, the largest food crop is maize, with 1.1m ha planted in 2018, according to the most recent data from the Ministry of Food and Agriculture (MoFA). Other main food crops planted that year include cassava, with 977,000 ha planted, yams (470,000 ha), plantains (387,000 ha) and groundnuts (320,000 ha).

Ghana is responsible for around 20% of the $9bn global market for cocoa, with some 80% of the country’s output exported raw to international refiners and producers, making it a significant addition to the balance of trade. In 2018, 1.8m ha of cocoa was planted, by far the largest industrial crop. “About 25% of Ghana’s families depend on cocoa farming as a source of income,” Krishnakumar Pillai, managing director of cocoa producer Barry Callebaut Ghana, told OBG. “Teaching methods to improve yields will have a significant impact on growing the wealth of the Ghanaian people.” Oil palm, the second-largest industrial crop by area, stood at 351,000 ha of area planted that year. The crop, however, remains constrained by historically low yields.

Some 60% of all farms are less than 1.2 ha in size, with 15% of farms larger than 2 ha. Customary tenure arrangements account for most land governance practices. Many farms are unmechanised, using hand labour supplemented by working animals. Irrigation, water management, and agronomic and animal husbandry practices are yet to be widespread. The use of poor quality seeds and weak warehousing and storage also impact farmers negatively.

Oversight & Policy

The MoFA is tasked with developing and executing policies related to the agriculture sector. It aims to promote modernisation, food security, sustainability and employment, while at the same time reducing poverty, and facilitating the use of technologies. It leads efforts under the Planting for Food and Jobs (PFJ) programme, which was implemented in 2017 and aims to improve productivity, bolster agro-processing, create jobs, and promote food self-sufficiency, import substitution and exports.

A number of other key government bodies and agencies are also involved, including the Ministry of Fisheries and Aquaculture Development, the Ministry of Lands and Natural Resources, and the Ministry of Local Government and Rural Development. The Ghana Export Promotion Authority, for its part, promotes exports such as cocoa, roots and tubers, tuna and lobster, as well as processed wood products, domestically produced chocolate and agri-business goods. Ghana also operates a decentralised government structure, with national ministries coordinating with municipal and regional departments of the local authorities.

Cocoa has its own oversight authority, the Ghana Cocoa Board. The regulator sets prices, and is the sole purchaser and marketer of cocoa beans. For the season starting October 2021 the cocoa producer price was set at GHS10,560 ($1800) per tonne, including a $400 living income differential to incentivise farmers.


Yields of key crops in 2020 amounted to 3.3 tonnes per ha for maize, 4.5 tonnes per ha for rice, 2 tonnes per ha for sorghum and 1.6 tonnes per ha for soya bean. The year saw a period of drought – impacting maize and soya-bean-growing regions in particular – and yields of these crops fell from the 2019 levels of 3.8 tonnes per ha and 2 tonnes per ha, respectively. Yields have been suboptimal, with the MoFA calculating that Ghana could produce 5.5 tonnes per ha of maize, 6 tonnes per ha of rice, 2 tonnes per ha of sorghum and 3 tonnes per ha of soya bean.

The pandemic and countermeasures against it had a sharp effect on the sector. Lockdowns deprived many small farmers of their ability to sell in local markets, while supply chains were interrupted. This impacted factors such as the supply of feed and fertiliser, spare parts to fix equipment and the ability of labour to travel. The price of imported staples also rose, while exports were hit by declining international demand. In July 2020, for example, cocoa prices hit a 15-month low of $2150 per tonne, although the price rebounded to $3000 per tonne by November of that year. Food inflation, meanwhile, jumped in spring 2020, up from 8.4% in March of that year to peak of 15.1% in May. Food prices slowly ticked downwards as supply-chain disruptions eased, hitting 5.4% in May 2021 before rising again to 12.8% in December 2021.

In response to the pandemic, the government launched a number of programmes aimed at alleviating its economic effects, including the four-year, GHS100bn ($17.1bn) Ghana CARES initiative. Running to 2023, the package includes support for commercial farming and training programmes to attract youth into agriculture. “Today’s youth are looking at the agriculture sector but unsure if it will provide a sustainable, long-term living,” Muhammadu Muzzammil, country manager of wholesaler ECOM Agrotrade, told OBG. “Because of this, it will be necessary to modernise and make it more attractive to younger generations.”


Agriculture is a significant contributor to Ghana’s trade balance. Indeed, in 2019 the sector accounted for 24.7% of the country’s exports, at $3.5bn, and 16.4% of its imports, at $1.7bn, according to the most recent figures from the World Trade Organisation. Cocoa and timber exports are particularly valuable, with data from the Bank of Ghana, the country’s central bank, showing that in 2020 nearly 586,000 tonnes of cocoa beans were exported, at an average price of $2530 per tonne, along with 273,000 tonnes of cocoa products, at a unit price of $310 per tonne. Some 226,000 sq metres of timber was also exported that year, at an average unit price of $590 per sq metre. Ghana’s agricultural imports, meanwhile, include both processed foods and beverages, and staples such as rice. In 2020, while Ghana produced 973,000 tonnes of rice, it imported 708,000 tonnes.

Fertilisers & Inputs

The PFJ, which offers subsidised fertilisers and improved seed varieties to farmers, has resulted in significant improvements farming practices and inputs in recent years. Under the auspices of the programme, the quantity of fertiliser distributed increased from 134,000 tonnes in the base year of 2016 to 423,000 tonnes in 2020, within reach of the 520,000 tonne target set for 2021, according to MoFA figures from August 2021. Seeds supplied also increased, from 2750 tonnes to 29,500 tonnes over the same period.

The provision of improved seed varieties resulted in higher yields of many of the country’s major crops. Maize output expanded, rising from 1.7 tonnes her ha in 2016 to 3.3 tonnes per ha in 2020, as did rice (2.7 tonnes per ha to 4.5 tonnes per ha) and sorghum (1.1 tonnes per ha to 2 tonnes per ha). While soya bean yields fell from 1.7 tonnes per ha to 1.6 tonnes per ha over the same period, the drop was attributed to a drought in 2020. Higher levels of staple crop production enabled a reduction of imports of these products, with the import of maize falling from 40,600 tonnes in 2017 to 9350 tonnes in 2020. With import substitution one of the government’s key objectives, this was seen as a major success. At the same time, exports of staple food crops to neighbouring countries rose from 35,200 tonnes in 2015 to 70,100 tonnes in 2020.

The Planting for Export and Rural Development programme, meanwhile, concentrates on tree crops and provides subsidised seedlings to farmers. Some 23.2m were distributed over the 2018-20 period, and were predominantly cashews and oil palm.


While most farmers are smallholders, larger agri-businesses often work with them in outgrower schemes or help them to form cooperatives in order to secure a supply of local raw materials for their processing plants. These agri-businesses themselves may also be micro-, small and medium-sized enterprises (MSMEs), as such businesses account for some 98% of all companies in Ghana. Encouraging MSMEs and larger firms to become involved, the One District, One Factory (1D1F) and One District, One Warehouse programmes provide incentives for firms to establish facilities in each district. While these schemes are not limited to agriculture, some 48% of the 278 companies participating were in agri-business as of August 2021, according to the MoFA. The Ashanti Region was home to the largest number of agro-based facilities under 1D1F, at 27, followed by the Eastern Region (15 facilities), Bono (14 facilities) and Greater Accra (13 factories). These facilities are often focused on the raw product for which the host region is known, according to Godfred Amoh-Mensah, manager at PwC Ghana. “The Central Region predominantly cultivates fruits, and as such, the schemes encourage fruit-processing companies to establish themselves, in turn bolstering local employment.”

Incentives on offer vary according to type of activity and location. For cash crops, livestock and processing, a five-year corporate tax holiday is available, and agro-processing companies can benefit from reduced tax rates, depending on where they are based. Those that fall under the Ghana Free Zones Authority have a tax exemption on profits for 10 years, in addition to a 0% import duty on equipment – a benefit also available to those registered with the Ghana Investment Promotion Agency. Moreover, firms can benefit from export-promotion programmes, the repatriation of dividends and investment protection schemes.


While the pandemic and the impact of climate change continue to create uncertainty in economies worldwide, the year ahead looks likely to be one of continued recovery for Ghana’s economy and its agriculture sector. Major challenges remain, however, especially in terms of rural transport infrastructure, processing capacity, the lack of mechanisation and the difficulty smallholder farmers have reaching economies of scale.

Even so, recent investment in improved crop varieties will begin to bring significant returns, as will investment in local food processing, along with improved inputs, mechanisation and fertiliser distribution. The creation of new methods for financing within the sector is also likely to bring results, with support from the government bringing expansion to one of Ghana’s most important economic sectors.

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