Ghana’s urban population is moving away from consuming meals requiring long preparation and cooking times and rather towards already-processed foods.
Recent surveys show significant presence of processed foods in retail shops, including milled rice, processed fruits and vegetables as well as frozen meats. However, only about a fifth of these products are locally processed.
The main reason processing has failed to take off is not because of lack of policy but rather the main constraint to a vibrant processing sector is the low production and productivity, high cost and poor quality of local raw materials.
Policymakers in Ghana endorse agro-processing as an important component for transforming the country’s agriculture-based economy into an industrial powerhouse. Except for wheat and barley products, most of the imported products are processed from crops that are widely grown in Ghana.
Ghana’s food processing sector comprises the following;
- Meat and Meat Products
- Fish and Fish Products
- Fruit and Vegetables
- Oils and Fats
- Dairy Products
- Milled Grain Products
- Animal Feeds
- Bakery and Confectionary
- Other Foods
Some of these enterprises include-
- Quarcoo Initiatives, producers and exporters of organic fruit juices and exporters of fresh limes to Europe,
- Grace Foods Limited, producers of Corn flour, Vinegar and Ketchup
- Uplife Co. Ltd., producers and marketers of honey products;
- Elsa Foods, producers of assorted fufu flour;
- Blessed Child Foods, producers of Shito, assorted cereal mix, etc;
- Homefoods Limited, producers of palm oil, gari, and spices.
Table 2.1: Ghana’s exports of some processed foods -2016
|Product||Weight (Kgs)||Value (US $)|
|Milk and Cream||2,179,677||6,169,257|
|Butter, Cheese etc||396,831||324,945|
|vegetables prepared nes||14,278||7,229|
|condiments and seasonings||6,250||1,268|
|fish prepared nes||2,290||3,127|
|Fruit juice, pineapple||643||285|
Source: Ghana Export Promotion Authority Annual Report, 2016+
- There is an opportunity to develop higher quality processed meats mimicking the successes in Europe (eg Parma ham, foie gras, leverworst) and/or with African flavours and ingredients to produce a new unique product range.
- The production of a polony/vienna that is cheap and shelf stable outside of a cold chain to provide processed meat to the large numbers of low income consumers.
- There is an opportunity in the production of milk and other dairy products such as;
- The development of new health yogurts using new and different African herbs for possible health benefits as well as taste.
- The development of the cheese market to accept new and higher value added cheeses based on those that succeed in the international market but which best meet Ghana’s conditions.
- Ghana has a wide range of agro-products that are currently exported in their raw state.
Opportunities therefore exist in the agro-food processing sector for manufacturing industries to add value to local agricultural products such as cereals, legumes, starchy crops, cashew, tropical fruits and vegetables. With the emphasis shifting from raw exports to processed exports, the investment opportunities are endless.
- Fruit juice Production
- Processed Cereals
- Processed Vegetables
- The seafood processing sub-sector is emerging as one of the attractive sectors for investment. The free zone can currently boast of one of the major fish processing firms in West Africa, processing about 170 tons of seafood (tuna) a day.
There is, in fact, a large volume of tuna, available all year round in the coastal water of Ghana. The processing of tuna and many other marine species therefore presents a great opportunity to any investor interested in seafood processing.
Major exporters of fish and sea food are;
- Pioneer Food Cannery
- West Africa Fishery Products and Marketing
- Continental exports (GH) Ltd
- Golden Europe Key Co. Ltd
- Heritage fresh food enterprise.
Cocoa plays an important role in the economy of Ghana. The cocoa industry employs about 800,000 people. The crop generates about $2 billion in foreign exchange annually and is a major contributor to Ghana’s revenue and GDP. Cocoa products like chocolate, pebbles and cocoa powder are consumed by many Ghanaians. Cocoa is indeed, Ghana and Ghana is Cocoa.
Cocoa is cultivated in all the forest areas of the country, particularly Eastern, Ashanti, Brong Ahafo, Volta, Central and Western Regions.
Value Addition in the Cocoa Industry
Currently, there are about five large processing companies operating in the country all at various levels of processing. These are the Cocoa Processing Company (CPC), Barry Callebaut, Afrotroprics, Cargill and Archer Daniels Midland (ADM). There is primary processing into the pastes, butter and nibs and there is secondary processing into confectioneries and chocolates.
Production of Cocoa Gin and Brandy
Project Description: Manufacturing facilities are required for the production of Cocoa Gin and Cocoa Brandy from the cocoa pulp juice (sweating) which are mostly wasted after breaking the cocoa pods. These are also economically viable/feasible for commercial production.
Project Scope: Potential investors could partner Cocoa Research Institute of Ghana (CRIG) to optimize the process of obtaining raw materials from the small holder farms for cost effectiveness and so the need for modern processing factories to be established at the districts or identified large cocoa plantations.
Initial Capital Outlay: The initial capital requirement for a factory to produce these products for the domestic and export markets is estimated at US$ (2- 4) million.
Project Location: The processing facilities can be sited in all the districts located in the six (6) cocoa growing areas namely Ashanti, Brong Ahafo, Eastern, Volta, Central and Western Regions.
Local Content (Human and Infrastructural Resource Available): There is a pool of available labour force who can be employed by these processing companies. There are motorable roads for the easy transportation of the raw materials from the farms to the prospective factory sites, constant power supply and adequate water supply in all the areas.
INCENTIVES AND BENEFITS
- Duty exemptions on plant, machinery and equipment
- Automatic immigrant quotas (i.e. work and resident permits)
- Five year tax holidays
The Ghana Investment Promotion Centre Act 865 also provides for automatic quota incentives and benefits etc. Please consult our website, www.gipcghana.com for further details.
Ghana is a safe investment destination. Guarantees against expropriation of private investments provided under the GIPC law are also buttressed by the Ghanaian Constitution. Some investment guarantees are detailed below:
i. Free transferability of capital, profits and dividends.
ii. Insurance against non-commercial risks – Ghana is a signatory to the World Bank’s
Multilateral Investment Guarantee Agency (MIGA) Convention.
iii. Double Taxation Agreements (DTAs) – to rationalize tax obligations of investors in order to prevent double taxation. DTAs have been signed and ‘ratified with several countries. (e.g) France, Germany, United Kingdom, Belgium etc.
POTENTIAL SOURCES OF FUNDING
Viable companies and projects can easily attract financing both on the local and international financial markets. The main sources of funding are:
- 34 Banks
- 60 Non-bank financial institutions
- 138 Rural and community banks
- The Ghana Stock Exchange – noted that in the last four years, many issues of shares on the GSE have been oversubscribed by 100% – 300%, meaning that there is a lot of money for investment purposes.
- Ghana Venture Capital Fund
- International development finance institutions based in Ghana, such as the International
Finance Corporation (IFC) and the African Development Bank (AfDB)
A number of foreign financial institutions also provide off-shore financing directly to companies in Ghana. (e.g.) Barclays Bank, Stanchart, Ecobank etc.
GHANA’S COMPETITIVE ADVANTAGE
Major strengths of the sector are:
- Relative proximity to Europe (i.e. 6 hours direct flight) as an export destination compared to competitors in Southern Africa and Central and South America
Ghana also offers many attractions to the foreign investor. They include:
1. Stable Political Environment
Ghana is a politically stable country. This has been recognized by the world’s famous leaders including former US President Barack Obama and his predecessor and the former UK Prime Minister David Cameroon and his predecessor. They have all commended Ghana for the political stability in the country over the years.
2. Macro-economic Policies
The Government of Ghana has initiated a number of sound macroeconomic policies designed to accelerate the process of growth and transformation of the economy under competitive conditions. In the face of dwindling crude oil prices, Ghana’s economy is still relatively stable.
3. Foreign Ownership
In Ghana, hundred per cent (100%) foreign ownership is permitted.
4. Access to ECOWAS Market
Ghana is easily accessible to the markets of all the member states of the Economic Community of West Africa (ECOWAS) with its population of approximately 300 million people.
5. Good Physical Infrastructure
Ghana possesses well developed seaports, airports and road networks capable of meeting the needs of businesses in the 21st century. There is an effort to upgrade the rail network to make it easy to get to the ports from inland. Telecommunication facilities in Ghana are excellent with more private service providers offering telephone, internet and other telecommunication services. Basic utilities such as water and electricity are readily available at relatively affordable rates.
6. Excellent Labour Force
There is a large human resource base of both skilled and unskilled labour which can be sourced at relatively low rates. The minimum wage in Ghana is GH¢ 9.68 per day (approximately US$ 2.095).
7. Access to International Markets
Ghana has easy access to the USA and European Union Markets. The flight time to almost all European Union countries is about 6 hours and 9 hours to the USA.
8. Availability of Fund Sources
Ghana has a large number of fast developing financial institutions available to raise long-term capital at competitive rates. These institutions include banks, insurance and venture capital companies and a stock exchange market (Ghana Stock Exchange).
9. High Safety Standard
There are high standards of health and safety measures in the country.
10. Warm and Friendly People
Ghana is internationally acclaimed for her hospitality to her investors and foreigners as a whole.
11. High Quality of Life
The quality of life of Ghanaians is fairly high.
12. Availability of Land
Ghana has a wide expanse of land that can be acquired with little difficulty through appropriate agencies and owners.