C-Energy Global Holdings reports that only 15.0% of farms in Ghana are classified as commercialized.
Their report, titled “Creating Agriculture Financing Schemes for Sustainable Agriculture and Food Security,” further reveals that a mere 4.0% of total bank lending in Ghana has been directed towards agriculture over the last five years.
The report identifies key challenges impeding the agriculture sector, including low mechanization, inadequate farm recordkeeping, deficient rural transportation infrastructure, and post-harvest losses.
These challenges not only affect the sector’s performance but also hinder financial support. Agriculture portfolios are typically thin across all financier groups.
“Agriculture however remains rain fed and on a subsistence basis with only 15% of farms in Ghana commercialized. Low mechanization, poor farm record keeping, inadequate storage & processing capacities, poor rural transportation infrastructure and post-harvest losses are the core challenges affecting agriculture sector performance and disincentivizing financing for the sector”.
Despite efforts, agriculture in Ghana remains primarily rain-fed and on a subsistence basis, with only 15% of farms classified as commercialized.
The report emphasizes the urgent need to address core challenges such as low mechanization, poor farm recordkeeping, inadequate storage, processing capacities, rural transportation infrastructure, and post-harvest losses, which disincentivize financing for the sector.
To bridge existing funding gaps, the report calls for more interventions from funds and financial institutions, notably the Agriculture Development Bank and Ghana EXIM Bank, both mandated to provide funding to actors in the agriculture value chain.
The report also highlights the growing food security risk in Ghana due to climate change, with the country being among the top 10 most severely impacted despite contributing minimally to global warming. Ghana experienced a significant rise in food prices in 2022, evidenced by a 23.8% increase in the national food price index.
Ghana’s agriculture economy is valued at approximately $12.6 billion, contributing an average of 20% to Gross Domestic Product over the last five years. Cash crops and other commodity exports from agriculture make up 20-25% of total export revenues, with the sector employing over 35% of the total labor force.