Business Climate

Agriculture has driven Ghana’s economic growth in recent years and remains the primary livelihood for the majority of its population of 28.21 million inhabitants (~2016), especially for the rural poor. Agricultural Gross Domestic Product (GDP) grew by around 6% per annum over 2007 –2010, driven largely by the liberalization of the sector and by domestic and regional market demand. Agriculture accounts for 30% of GDP and 60% of employment, indicating a significant labour productivity gap with other economic sectors and the need to increase labour productivity and attract capital investment.

With approximately 90% of farm holdings of less than 2 hectares (4.94 acres), Ghanaian agriculture is still dominated by traditional smallholder farms. Rural poor and food insecure households are mainly smallholder food crop farmers with limited access to factor and output markets. This results in low productivity of land and labour, poverty, low investment capacity, and lack of opportunities for young people. Nevertheless, domestic and regional demand for food crops is strong and agribusinesses are interested in working with smallholders, but they are asking for more formalized business relationships along the value chains. Rural women and girls contribute significantly to farm labour, particularly in view of high migration rates of young men because of the lack of economic opportunities, resulting in an ageing and generally less dynamic rural population, high rates of youth unemployment, underemployment and social inequality. The focus on employment opportunities for rural youth is a top priority of Government of Ghana (GoG) and Development Agencies.

Between 1991 and 2006, the poverty profile of Ghana has remarkably improved both at national level and in urban areas. Extreme poverty has been halved from 36.5% to 18.2%2, while the proportion of people living below the upper poverty line decreased from 51.7% to 28.5%. Nevertheless rural poverty remains the topmost challenge of GoG, in particular because of its impact on livelihoods of young people and women. Ghana is reasonably food secure at national level, but household food insecurity is a concern in particular in the Northern, Upper East and Upper West Regions, where respectively 20%, 38% and 24% of households are food insecure.

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