Presentation by Mima Nedelcovych Chairman, Schaffer International
Mapping Assessment of Investment & Partnership Opportunities
Agriculture Drives Ghana’s Economy
The Market: Projected Rice, Maize, and Soy Shortfalls
MoFA: Source: Statistics, Research and Info. Directorate (SRID), Min. of Food & Agric.-February, 2013 FtF: Ghana FY2011-2015 Feed the Future (FTF) Multi-Year Strategy, February 2011. Feedthefuture.gov EAT: “The Market for Maize, Rice, Soy and Warehousing in Northern Ghana”, USAID Enabling Agricultural Trade (EAT), prepared by Fintrac Inc. January 2012.
Overview of Ghana’s Agribusiness Sector Agribusiness is: • 30% of Ghana’s GDP • 60% of Ghana’s labor market • Predominant sector in rural and agro-pastoral northern regions
Agribusiness lending: • Is only 5% of Ghana’s banking system (most of which is in cocoa production and forestry/logging) • Barely reaches FinGAP key value chains of maize, rice, and soy In a recent survey* 59% of respondents in Ghana’s North, Upper East and Upper West regions ranked access to funding and capital as their single greatest challenge. *International Food and Policy Research Institute (IFPRI) and International Fertilizer Development Center (IFDC) Survey, Washington, D. C. 2009.
GOG approach •
•
NEW POLICIES – Encourage investment to transform the agriculture sector – Active collaboration with the international and national private sectors to overcome high borrowing rates for agricultural inputs GCAP Appraisal*: North offers two-pronged investment opportunities that could result in: – Economic growth – Positive financial returns
Production Figures for Major Crops in the SADA Zone (mt) Northern
Upper East
Upper West
% of Total
Maize
202,316
62,256
96,018
56%
Rice
185,877
135,221
7,291
57%
Soy
49,950
6,940
14,970
70%
*GCAP 2012 Appraisal: http://wwwwds.worldbank.org/external/default/WDSContentServer/WDSP/IB/2012/03/05/000350881_20120305092319/Rendered/PDF /664990PAD0P1140losed030501200SIMULT.pdf
The North is positioned to meet demand: • National demand for rice, maize & soy is dramatically rising • Emerging market linkages are connecting the farmer, aggregator/trader, and processor • Entrepreneurial spirit, particularly among the nucleus farmers and aggregators, are impressive • Undeniable availability of arable land, and high potential for major irrigation and water retention improvements • Connecting northern production areas to southern processing facilities and markets
Transforming Tamale: Transport & Investment Hub • Only Northern city near rice, maize and soy production areas • Ideally located along Volta transport routes to aggregate and ship south • Well-situated for aggregating/warehousing grains en route to North and Sahelian trade routes • Growing availability of warehousing facilities and agriculture support services
Transforming Tamale: Constraints to Growth • • • • • • •
Lack of water retention and irrigation schemes Poor access to mechanization High cost of financing Input supply constraints Land utilization rights Overall poor yields Post harvest losses (especially at farm levels)
Interventions to develop the farm-to-fork agro-allied value chains • • • • • • •
Input supply financing Post-harvest trade and finance Impact investors Strategic investors DFIs Commercial/trade finance Export Development and Agricultural Investment Fund • PPP irrigation schemes
Mapping of initial investment opportunities This map map captures the existing investment opportunities identified by the USAID-FinGAP program
Prototype Financial Interventions • Identified deals ranging $15,000 to $20 million • Working capital (short-term, up to 1 year) – Pre-planting input financing – Offtake purchase/post-harvest crop financing
• Medium-term financing (up to 3 years) – Equipment purchasing – Warehouse construction
• Long-term financing (more than 3 years) – Greenfield processing projects or upgrades – Irrigation infrastructure – PPP schemes
USAID-FinGAP Financing by Value Chain to Date Total Financing: $1,571,000 Maize, 1,060,000.00 67.5% 30.5%
Soy, 481,000.00
2%
Rice, 30,000.00 Soy
Rice
Maize
Thank you! Dr. Mima S. Nedelcovych Chairman Schaffer International miman@africaglobal.com +1 910 547 0673