A publication of the Ghana Investment Promotion Centre (GIPC)
Background Palm oil. Nearly 210,000 MTs of crude palm oil
Highlights Agriculture is the main driving force behind
Ghana’s economy, accounting for
approximately 42 percent of the country’s
GDP and employing 54 per cent of its work
force. In recent years, the government has
encouraged the development of the non-
traditional agricultural sector in order to
diversify the country’s export base. Special
emphasis is placed on horticultural
production in recognition of Ghana’s natural
and competitive advantages in this area. In
addition to possessing
the largest fresh water lake in West Africa,
the Volta, each of Ghana’s six agro
ecological zones is suitable for the
production of specific crops.
There has been a general increase in the
use of Ghana’s arable land for cash crop
production, especially for cocoa, oil palm
and pineapples. Irrigation schemes
consequently increased and agricultural
inputs became more readily available,
mainly as a result of private producers
importing these from abroad, although local
production of inputs also exists. Cold
storage and transportation services are also
available.
Trends
Ghana’s primary cash crops include cocoa
beans, palm oil, pineapples, cotton and
tomatoes. Others include bananas, citrus
fruits, coconuts, tobacco, spices and fresh
vegetables.
Cocoa. About 1.2 million hectares are
currently utilized for cocoa production.
Ghana processes between 18% and 22 % of
its output into liquor, paste, and butter for
export markets, while all other cocoa is
exported in its raw state. Ghana’s three
major cocoa processors, the Cocoa
Processing Company, West African Mills,
and Taksi, have a combined installed
processing capacity of 84,000 MTs.
1
were produced by large, medium, and small-
scale mills in Ghana in 1999, with the large- and
mediumsized mills contributing 31 percent of the
total. The operating capacities of the large and
medium sized oil palm processors are 125.5
MTs/hour and 23.8 MTs/hour, respectively. The
bulk of Ghana’s palm oil production is consumed
domestically.
Pineapples. Ghana’s pineapple industry has
grown significantly over the past twenty years.
Commercially produced pineapples are grown
within a 50km radius of the capital, Accra. From
here they are shipped to export markets such as
Germany, Holland and Italy by sea or air. From
1994 to 1999, the total value of Ghana’s
pineapple exports increased nearly threefold,
from US $5.3 million to US $15.5 million.
Pineapple processing has also increased, with a
number of companies involved in manufacturing
single-strength juice and juice concentrate. In
addition, the company Blue Skies recently
established a plant for processing pineapple into
slices and mixed fruit salads.
Cotton. Ghana’s cotton production takes place
mainly in the Northern and upper West regions
of the country. The Agricultural Development
Bank (ADB) is the main financier of cotton
production, processing, and export. The ADB
arranges for small-scale contract growers to
supply processors with product. The ADB also
provides small-scale producers with inputs.
There are presently nine large processors in
Ghana. The four working under the ADB
scheme produce combined output of 70,000
MTs. The Ghana Cotton Company, which
produces almost 60 percent of total national
output, owns four ginneries.
.
Tomatoes. The total land area utilized for
tomato production in Ghana grew from
28,400 ha in 1996 to 37,000 ha in 2000, an
increase of 30 percent. The average yield is
7.5 MTs/ha. Producers hope to double this
figure to 15 MTs/ ha in the near future in
order to increase both local and export
market share. Ghana’s imports of tomato
paste nearly tripled from 1993 to 1997,
increasing from 3,710 MTs to 10,621MTs. In
addition, Unilever Ghana recently began
importing bulk-pressurized tomatoes from
Europe for local repackaging and distribution.
Opportunities
Opportunities in Ghana’s cash crop industry
exist in the following areas:
FRESH AND PROCESSED FRUITS
Fresh and canned pineapples;
Papayas, mangoes and other exotic fruits;
Pineapple and exotic fruit juices.
FRESH AND PROCESSED VEGETABLES
Tomatoes and tomato paste;
Chillies and hot sauces;
Squash and cucurbits;
Frozen vegetables;
Asian vegetables.
SPECIAL COMMODITIES
Conventional, organic and specialty coffees;
Conventional and organic cocoa and
derivative products;
Cotton lint.
OILS
Palm oil;
Cottonseed oil.
Advantages
Ghana possesses a number of advantages
that make it a favorable choice within the
sub-Saharan region for agricultural
investment:
Human resources. With 54% of its working
population employed in agriculture, one of
Ghana’s main competitive advantages is its
skilled human resource base. From
university-trained
agricultural engineers to experienced farm
managers and field hands, Ghana’s
agricultural workers easily adapt to the
introduction of new production systems and
technologies.
Irrigation. The main types of irrigation
systems used - drip and sprinkler types - are
imported from Europe by local distributors
including Dizengof Ghana Ltd. And Pasico
Ghana Ltd. In addition, rising demand by high-
value horticultural growers has led to local
production of these systems.
Storage. Ghana has a total cold storage
capacity of about 70,000 MTs, with over 90%
of facilities situated in Accra and Tema. Plans
are also advancing to construct additional cold
storage at Kotoka International Airport’s cargo
village.
Transportation. In addition to MAERSK and
other carriers operating at the port of Tema,
there are five air cargo lines (Swiss Air,
Lufthansa, KLM, Ghana Airways and Race
Cargo) serving Kotoka International Airport.
Air freight ranges $0.74 to $1.25/kg on direct
flights to most European destinations. Ghana
also has a comparative advantage in its
proximity to the EU, with flights to Amsterdam
averaging just 6 hours compared to over 11
hours from other origins.
Financing. Ghana’s finance sector is one of
the most developed in Africa. With over 30
banks, insurance and brokerage firms and a
stock exchange that allows companies to
raise long term capital at low cost, the
country’s finance sector is well-poised to
support the private sector in coming years.
Available services include working capital
finance, project finance, and letters of credit.
Other advantages include:
• Well-developed transportation infrastructure,
electricity and water supplies, internal and
external communications, and sea and airport
facilities;
• A strategic location within the West African
subregion and preferential access to
neighboring ECOWAS markets (with a total
populace of 250 million);
• Well-established democratic institutions and
a free market economy;
• No restrictions on the issuing of work and
residence permits to foreign investors.
Investment
ENVIRONMENT
Ghana enjoys a liberal investment
environment and has a noted reputation for
friendliness and transparency. Ghana’s
investment benefits include ownership in
local companies and joint start-ups. The
minimum required equity for foreign
investment in a joint-venture is US $10,000;
the corresponding amount for enterprises
wholly-owned by a non-Ghanaian is US
$50,000. Foreign investors are also
permitted to lease land for a period of up to
50 years with an option for renewal.
INCENTIVES
The operative law regulating general
investment in the country is the Ghana
Investment Promotion Centre Act 1994 (Act
478), which makes provision for the
automatic award of investment incentives
and benefits without prior approval.
Incentives under the law include:
• Exemption from customs import duties on
plant and machinery, equipment and
accessories imported exclusively and
especially for establishing enterprises;
• Depreciation or capital allowance of 50%
in the year of investment and 25% in
subsequent years for plant and machinery,
respectively, and 20% in the first year and
10% in subsequent years for building;
• Corporate tax rebates of 40% - 75%;
• Investment allowance of 7.5% per annum;
• Full repatriation of earnings in the
currency of investment.
Additional incentives have been packaged
into the Free Zone Act of 1995 for parties
interested in developing and operating
Export Processing Zones (EPZs). These
include: • Complete exemption from
payment of direct/ indirect duties and levies
on all imports for production purposes and
exports from the Free Zones;
• Complete exemption from payment of
income tax on profits for a period of 10
years (the income tax rate after 10 years
shall not exceed 8%);
• Complete exemption from payment of
dividend taxes arising out of Free Zone
investments;
• No import licensing requirements;
• 100% ownership of shares in the business
entity by any investor;
• No conditions or restrictions on the
repatriation of dividends or net profits.