TCI Investment Days 2012 Rome, 17-18 December 2012

Creating an enabling environment for investment in Ghana: MAFAP preliminary

results and policy recommendations

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Federica Angelucci, MAFAP, FAO Christian Derlagen, MAFAP, FAO

Outline

1. Preliminary results for:

Rice

Palm Oil

2. Policy recommendations

3. Dialogue with Government

institutions

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GHANA COMMODITY COVERAGE

Aligned with the Medium Term Agricultural Investment Plan

(METASIP) priority commodities

key import substitutes (e.g. rice, maize and palm oil)

key export crops (e.g. cocoa, yam)

key crops that are non-traded but important for food security (e.g. cassava, yam)

crops with high potential (e.g. sorghum, ground nuts)

Totaling around 63% of the value of production

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Why Ghana?

Call for more private investment by

Main policy documents (FASDEP II)

Medium Term Investment Plan (METASIP)

Development agencies

Commodity analyses confirm need for policies

which are more conducive to private investments

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MAFAP METHODOLOGY is an effective tool to

inform policy decisions

RICE – commodity context

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Rice production is increasing

First import crop

70% of the rice consumed is

imported

RICE- Policy context

Import duty of 20%

Additional 3%

Statistical fee; processing fee; inspection fee;

Export development and investment levy;

ECOWAS levy

Rice is included in the National Food Buffer Stock

Company (NAFCO

Input subsidies (fertilizer, machinery)

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RICE Results

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Policy recommendations

Tariff on imported rice penalizes consumers and

does not effectively support producers (quality)

Market-oriented support aromatic rice

varieties favoured by consumers

Better processing methods

In depth assessment of the impact of NAFCO

purchasing policy on producers (floor prices)

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PALM OIL – Commodity context

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2% of agricultural production in 2010.

Huge productivity variation across farms

Demand > Supply

Constraints fro small scale processing industry:

Market access,

Access to credit

Processing technology and skills.

Palm oil- Policy context

Sector privatized (1990s -2000s)

Inputs distribution

Policy documents:

The Palm Oil Master Plan

The tree crops policy;

Import tariff at 20%

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Results: Palm Oil

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Policy recommendations

Improve efficiencies of small scale

processing facilities

Further analyze impacts of access

costs on farmers outside outgrower

schemes.

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Concluding remarks

MAFAP unveiled disincentives for farmers in

both cases

Low price transmission

High access costs (infrastructure gaps, illicit taxation)

Lack of investment in upgrading small scale

processing facilities for palm oil

Restrictive trade policies are not effective for

farmers

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Government response

MAFAP CB workshop in November

2012

As a result, MOFA

Adopted the methodology

Added poultry and livestock analysis

Created a team within the PPMED

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Assess impact of policy and investment

decisions Investments target the areas of greatest need

Policies fully support agricultural development

Support METASIP and the G8 New

Alliance for Food Security and Nutrition.

Provide quantitative indicators

supplementing existing M&E mechanisms

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How to use MAFAP in Ghana?

Thank you!

Visit www.fao.org/mafap

Ask questions at Mafap@fao.org

Annex I: Progress of activities in Ghana

8 technical notes on rice maize cassava yam

cocoa sorghum palm oil groundnuts

Public Expenditure analyzed as per MAFAP

methodology of PE classification - early 2013;

GHANA COUNTRY REPORT (summary of

results + COHERENCE between public

spending and results on

incentives/disincentives) Mid-2013.

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Annex II Partnerships and country level activities

Ministry of Food and Agriculture (MOFA)

Policy Monitoring and Evaluation dept. (PPMED)

Statistics and research dept. (SRID):

incentives/disincentives

CSIR-STEPRI: public expenditure work

CAPACITY BUILDING on incentives disincentives

analysis:

requested by MOFA

targeted to both MOFA as well as COCOBOD, and

selected representatives from the private sector

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