As a pack of sport utility vehicles jostles in the parking lot of Ghana’s flagship KFC restaurant in Accra, Venkataraman Balakrishnan is putting in orders to make sure the fast food chain will not run out of chicken.
Trouble is, Balakrishnan, the franchise quality manager, cannot find enough low-cost, high-quality chickens in Ghana and must order them from as far afield as South Africa and Egypt.
Potatoes for the chips come from Belgium and Holland.
“Ghanaian farmers can’t produce to standard,” Balakrishnan said. “When you talk of brand, we’re looking at global food safety. The expertise is not there.”
While affluent Ghanaians see the arrival of KFC, which is owned by Yum Brands, as a symbol of the west African nation’s growing prosperity, the 60 percent of the workforce that is sustained by farming is not benefiting from a surge in demand for fare from restaurants catering to the expanding middle class.
With thousands of young Ghanaians flocking to oil- and gas-related job fairs held in conference centres across Accra, the capital, food agriculture outside basic grain production is stagnant.
Ghana, the world’s second-biggest cocoa exporter and Africa’s second-largest gold producer, faces persistently low agricultural growth and a huge prosperity gap between the oil-producing south and the north, which relies on subsistence farming, according to a report released in December last year by the US Agency for International Development.
The imbalance mirrors that of Nigeria, Africa’s biggest oil producer, which imports more than $10 billion (R102bn) worth of food a year.
Ghana’s oil exports from the Tullow Oil-run Jubilee field began three years ago, and the government expects to more than double output to 250 000 barrels a day by 2021, as the $4.5bn offshore TEN project comes online in 2016.
Rural families are not getting the full benefit of Ghana’s economic growth, which is expected to outpace Africa’s average for a sixth consecutive year, according to Shashidhara Kolavalli, a senior development strategy researcher at the International Food Policy Research Institute.
“Agriculture is not very dynamic: most of the money comes from donors and goes to budget support and policy meetings,” Kolavalli said. “The picture that emerges historically is that Ghana has always imported its food.”
Ghana allocated less than 2 percent of its budget to agriculture in 2011, down from an average of 8.7 percent between 2003 and 2009, according to ONE, a US-based NGO that tracks the progress of a 2003 pledge by African leaders to spend 10 percent of their budgets on agriculture.
The contribution of agriculture to gross domestic product fell to 22.7 percent last year from 31 percent in 2008, according to Ghana’s Statistical Service.
Ghana spends about $1bn a year importing agricultural products to meet a growing appetite for consumer foods fuelled by rising middle-class incomes and changing consumption patterns, according to the US Department of Agriculture.
A fifth of that amount alone, or $200 million, was spent on shipping in frozen poultry. At the same time, food exports of goods such as cashew nuts amounted to $100m.
“The consumer gets a variety from across the globe because imports are cheaper than producing here,” Balakrishnan said.
Ghana does produce its basic grains, with output of maize last year at 2 million tons – twice local demand. But it imports everything from tomatoes, carrots and onions to apples and dairy products such as milk and cheese.
“Go to the shop even in rural neighbourhoods and you will find processed goods such as juices from Israel and all those places,” Kolavalli said.
“You can’t get fresh orange juice in a country that produces oranges.
“I think that demand for fresh products is just not in the culture.”
A local unit of UK-based Blue Skies Holdings this year imported pineapples and mangoes from neighbouring Ivory Coast and Burkina Faso because local farmers could not supply enough, chief executive Anthony Pile said.
“There’s a group of people who can afford to buy fresh juices, and that group is growing,” he said.
“There is tremendous opportunity in Ghana, but we need a social mindset change – more entrepreneurial spirit when it comes to agriculture.”
Kenneth Quartey, a founder of two of Ghana’s largest poultry farms, Sydals, said that his company had operated below capacity since imports of frozen chicken from Europe began flooding the market more than a decade ago.
The price for imported chickens was about half the cost of those produced locally.
The farm stopped producing chicken meat altogether because it could not compete with imports, shifting to eggs instead, Quartey said.
Now, his farm delivered eggs to at least three supermarkets in the capital.
“Agriculture is becoming less and less attractive in this country as the years go by,” he said. “Our farm is very indebted and still we’re way below our capacity; banks don’t have any concessions for us. Rather, agriculture is considered riskier than other trades.”
While the Agriculture Department was supposed to subsidise fertilisers and help improve farming methods, it lacked adequate funds, said Deputy Agriculture Minister Ahmed Yakubu Alhassan.
The government is struggling with a fiscal gap that climbed to 12 percent last year.
“In many instances there’s not enough in the government kitty so the ministry’s budget has to be cut down,” Alhassan said in an interview. – Bloomberg