World Bank approves US$100 million for scaling up Commercial Agriculture in Ghana

March 22, 2012

WASHINGTON, March 22, 2012 - The Board of Directors of the World Bank today approved a US$100 million credit to support the Government of Ghana’s efforts to scale up the development of commercial agriculture nation-wide. The Commercial Agriculture Project seeks to facilitate access to land, strengthen Ghana’s investment promotion infrastructure for attracting agri-business investors, and promote public private partnerships and small-holder linkages in the Accra Plains the SADA Zone.

The Government of Ghana is currently implementing a nation-wide Food and Agriculture Sector Development Policy (FASDEP II - 2010 – 2015) focusing on six priority themes: Food Security and Emergency Preparedness; Increased Growth in Incomes; Increased Competitiveness and Enhanced Integration into Domestic and International Markets; Sustainable Management of Land and Environment; Science and Technology Applied in Food and Agriculture Development; Improved Institutional Coordination.

The Commercial Agricultural Project, which is designed to support the implementation of above priorities, is made up of four main components:

Component 1: Strengthening investment promotion infrastructure and facilitating secure access to land (US$11.8 million; to be complemented by USAID co-financing of US$5.9 million) - This component will promote a secure investment climate that clarifies and strengthens the rights and obligations of investors, government and affected communities, and support an improved mechanism for facilitating access to land by reducing the search costs to potential investors through an expansion of a database of land suitable and available for investors and by building on nascent mechanisms for actively matching potential investors with suitable land owners.

Component 2: Securing Public Private Partnerships (PPPS) and small-holder linkages in the Accra Plains (US$45.4 million) - This component will conclude transactions for PPPs in an irrigation investment in the Accra Plains. The project area includes the existing Kpong Irrigation Project as well as an expansion of an additional 7,000ha under a PPP arrangement, inclusive of commercial ‘anchor’ farms and associated out-growers.

Component 3: Securing PPPs and small-holder linkages in the SADA Zone (US$29.3 million; to be complemented by USAID co-financing of US$35.0 million) - This component will involve support to the identification and realization of private investments in inclusive commercial agricultural arrangements in the agricultural value chain through PPPs, complementary public investments, and technical assistance concentrated in the SADA zone.

Component 4: Project management including M&E (US$14.3 million; to be complemented by USAID co-financing US$7.2 million) - This component finances the operations of the project implementing agencies. It will also finance the various monitoring and evaluation and community engagement and communications functions.

According to Chris Jackson, Senior Economist and project Task Team Leader: “This project reflects the Bank’s continued support for Ghana’s agricultural development. By focusing on ‘socially inclusive commercial agriculture’ it will improve the enabling environment for farmers while also making sure that local communities can participate in new agriculture based opportunities. By strengthening the arrangements by which investors secure land, it will reduce investor risks and promote benefit sharing arrangements. The geographical focus promotes a balanced development between the high-potential Accra Plains and underexploited areas in northern Ghana.”

Even thought the project will support the scaling up of commercial agriculture on a national scale, it will have two main ecological areas of focus: the SADA zone and the Accra Plains. In the SADA zone it will primarily support the development of value chains in areas with a good potential for agricultural growth. In the Accra Plain the area targeted includes 11,000ha mainly for irrigated cultivation. In both intervention zones the project will promote contract farming and support the establishment of out-growers schemes for various agriculture commodities.

According to Hon Kwesi Ahwoi, Minister of Food and Agriculture, “the project directly supports the Government’s Commercial Agriculture agenda, and is a key pillar in our efforts to modernize agriculture. The Accra Plains, the SADA Zone and other ecological belts in the Western and Eastern Corridors have huge potentials which we need billions of dollars to fully harness. While the project will be housed in the Ministry of Food and Agriculture, we shall foster an active partnership between my ministry, the Lands Commission, the Ghana Investment Promotion Center, the Environmental Protection Agency and the Savannah Accelerated Development Authority to ensure smooth implementation”.

“By supporting out-grower schemes and contract farming arrangements, this project will help connect our small farmers to markets and strengthen key value chains. It will also increase the production of rice and maize to help the country to become self sufficient in these crops,”  the Minister reiterates.

In addition to the US$100 million being provided by the World Bank, USAID will provide a grant of US$45 million to jointly support the implementation of this project by promoting inclusive market growth and leveraging the resources and expertise of the private sector toward our common pursuit of improving food security in the SADA region of Northern Ghana. This is a key pillar of the U.S. Government’s new Feed the Future strategy for Ghana and will seek to build from the experience of Ghana’s U.S. funded Millennium Challenge Corporation program which closed at the end of February, 2012.  Feed the Future supports country-led processes for food security and agricultural development, and Paul Weisenfeld, USAID’s Assistant to the Administrator for the Bureau for Food Security, notes: “USAID is proud to support the Ghana Commercial Agriculture Program as a key component of Ghana’s strategy to increase food security and agricultural development through inclusive private-sector led growth designed to benefit Ghana’s smallholders".

Yusupha Crookes, newly appointed World Bank Country Director for Ghana notes, “I am glad we are scaling up our support for Ghana’s agricultural sector. Ghana has great potential to become a leading food producer in the West African sub-region. What we all have to do is to put serious traction behind this project to help create more jobs particularly for rural folks and women, and ultimately bring more agricultural products to the markets.”

Media Contacts
In Washington
Aby K. Toure
Tel : +1 (202) 473 8302
In Accra
Kafu Kofi Tsikata
Tel : 233 302 214100