Market potential: Growing domestic consumption and the use of maize as feed stock for the poultry market point to a number of opportunities for investment in this value chain. Total annual domestic maize consumption stands at 1.8 million metric tons and is met almost entirely by local production. Of this total, 63% is consumed by humans, 23% serves as a key input into the animal feed market, and the remaining 14% is used in industrial processing (breweries, beverage producers) or the production of processed foods such as flour. Domestic per capita consumption of maize has been decreasing due to urban households’ preference for rice, which is easier to prepare. However, this trend has been offset by population growth; from 2005 to 2009, local demand grew at 8% per year. The poultry industry, which is dominated by “layers,” is the largest consumer of animal feed maize. While white maize is more widely produced, yellow maize is preferred in this market segment as it contributes to a more pronounced yolk colour. Regional and global consumption is growing by 6.6% and 3.6% per year, respectively. However, stringent export licenses and caps on exports in times of food shortage have limited Ghanaian producers’ access to export markets.
Competitiveness: Ghanaian maize competes favourably within the West African region. Production yields are on par with regional yields at 1.9 metric tons per hectare; similarly, domestic farm-gate prices, at $384 per metric ton, are only 2.7% higher than regional averages. However, Ghana’s maize has not yet achieved global competitiveness: global yields are approximately three times higher than domestic yields, while local farm-gate prices exceed global averages by 22%. There is potential to enhance global competitiveness through the use of improved seeds and fertilizers, which could result in yield improvements of over 23% and significantly reduce costs of production.
Investor outlook: Surveyed investors showed high interest in the maize value chain. Their interest/activity was concentrated in processing and primary production, with a few engaged in the supply of improved seeds.
Social impact: Investments in maize cultivation stand to improve incomes of the roughly 320,000 smallholder farmers involved in maize cultivation, including many female maize farmers who frequently manage their own fields and have full discretion over the disposal of harvest.
Illustrative Investment Opportunities
¬ Import substitution of yellow maize for poultry feed through the expansion of commercial yellow maize production to 10,000 hectares in the Volta Region
¬ Expansion of operations of high-yield maize seed producers in northern Ghana
¬ Intercropping of maize with cotton to optimize innovative cultivation techniques that have been developed to rehabilitate soil that has hardened due to inefficient plowing practices
Market potential: Currently, Ghanaians consume roughly 862,000 metric tons of rice per year. From 2005 to 2012, total annual domestic consumption of rice grew 3.6% per year—and this upward growth is expected to continue. Increasing urbanization and income levels are driving a notable shift in consumer preference from maize to rice as a source of starch. More affluent Ghanaian consumers show a strong preference for aromatic, straight-milled rice, while local, non-aromatic, parboiled rice is considered to be of inferior quality and consumed by poorer households. Rice imports, primarily from Southeast Asia and the United States, account for approximately 75% of total consumption; domestic supply has not yet been able to meet demand despite the 13.5% per year growth in production. Importantly, demand for rice is growing steadily both regionally (6.2% per year) and globally (1.9% per year).
Competitiveness: Rice yields in Ghana are 26% higher than regional averages but lag behind global yields, which are at least 1.5 times higher. At $506.80 per metric ton, local prices are 2% higher than global prices even though local rice (60% of which is parboiled) is considered inferior in quality. Local rice is parboiled to repair cracked and brittle grains and reduce breakage during milling. This is an additional cost to processors but does not earn a premium over straight-milled rice, thereby reducing the competitiveness of Ghanaian rice on global markets. From a regional perspective, Ghanaian farm-gate prices are, on average, 20% higher than those found in other West African countries. This is at least partly due to the fact that local rice is generally of a better quality than the rice produced throughout the West African region.
Investor outlook: There is high interest from investors in rice production due to the significant potential that that exists in import substitution to serve the domestic market. The Indian group Avnash Industries Ghana Ltd. has set up three rice mills in Tamale, Bolga, and Pombussi, with a combined capacity of 5.4 million metric tons of rice per year. The company is looking to contract farmers on an out-grower basis to supply rice to their processing facilities.
Social impact: Investments in rice have the potential to increase incomes for the 80,000 farmers who currently cultivate this crop as well as the thousands of women in northern Ghana who take part in the paddy parboiling process. Further investments in this value chain are also expected to contribute to the empowerment of women, as women are reported to dominate the trade and on-farm labour of rice.
Key players: Olam Ghana, Finatrade, Brazil Agro-Business Group, Avnash Industries, etc.
Illustrative Investment Opportunities
¬ Commercial production of rice, soya, and maize on a 3,000 hectare nucleus farm with accompanying out-grower scheme involving 6,000 smallholder farmers on 10,000 hectares of land in Ejura, Brong-Ahafo
¬ Provision of cleaning and warehousing services for rice and maize producers in the SADA zone
Farmer Helpline: 0500000996