Ghana Agribusiness Investment Summit, 2014 Attracting Foreign Direct Investment into Agriculture: opportunities and incentives
Mrs. Mawuena Trebarh, CEO, Ghana Investment Promotion Centre, gipcghana.com
Agenda for Today Agriculture & Agro-processing – Benefication across the value chain Opportunities In Agriculture & Agro-processing Investor benefits (Incentives & Guarantees ) Why Ghana About Ghana Invest in Ghana Contact us
Agriculture & Agro-processing Benefication across the entire value chain
Agriculture & Agro Processing Salient Facts
The Sector employs about 42% of the population of the country becoming the second largest to the services sector with 43%. Until recently the sector was the largest employer, employing above 50% of the population Total land area of 23.9million hectares with 57% suitable for agriculture 16% of arable land is currently under agricultural production 90% of farm holdings are less than 2 hectares in size , with some commercial farmers in rice, cocoa, rubber, oil palm
Agriculture & Agro Processing Salient Facts Irrigable land area of 346,000 ha, 29,345 ha is developed as at 2012and it is expected to increase to over 40,000 ha by end of the implementation of the GCAP project Growth in agriculture sector was 3.4% in 2013 and its is expected to grow at 5.3 in 2014. 4.9 in 2015, 5.2 in 2016 and 4.2 in 2017 . The sector’s contribution to GDP in 2013 is 22% 2nd largest producer of cocoa in the world
Agriculture & Agro Processing Salient Facts Progressively FDI attraction into the sector had been on the increase for the past years The total estimated value of FDI in the Agriculture sector for the past 10 years amounts to US$1,168,865,290.68 The yearly estimated FDI value for the past 10years averages US$116,886,529.07
Agriculture & Agro Processing Policy Trends Policy and Medium Term Agriculture Sector Investment Plan is focused on :
Food security and emergency preparedness Growth in incomes Access to markets Sustainable management of land and environment Applied science and technology Enhanced institutional coordination.
Agriculture & Agro Processing
Policy Trends  Government Priority Crops Category
Crop Types
Cereals & Grains
maize, soya, rice and sorghum
Fruits
Banana, pineapple, mango, orange and pawpaw
Vegetables
Pepper, tomatoes, carrots, lettuce, cabbage, green pepper and shallots
Tubers
Yam and Cassava
Investment Opportunities In Agriculture & Agro-processing Short, medium and long-term investment opportunities have been identified through analysis of a number of value chains based on their: market potential for growth; Ghana’s competitiveness in production; investor interest; potential social impact; and contribution to the development of Ghana
RICE - Production and Processing Local consumers’ preference for rice over other grains is increasing Current demand is about 700,000MT Ghana currently produces about 56% of its demand (405,000 MT) and imports the remaining 44% Opportunities exist to invest in rice to stimulate local production, particularly for straight-milled, aromatic rice to meet tastes of more sophisticated consumers
Cassava –Production and Processing Cassava demand is growing due to its various uses: as a key staple of the local diet, a beer input, and wheat flour replacement the most highly produced crop in the country (13 million MT in 2010) and yields are 20–30% higher than regional and global averages Opportunities exist to expand processing capacity to preserve the crop after harvest
Medium Term Opportunities Cashew: Opportunities to expand processing capacity to serve local and export markets as West Africa has a competitive advantage in production Sorghum: Production opportunities to meet demand from humans, animal feed producers, and breweries replacing barley with sorghum Soybean: Opportunities to supply soybean meal to the local poultry industry and soybean oil to paint manufacturers, as well as meet global demand for biodiesel Poultry: Opportunities to meet animal protein demand from growing middle class, if maize and soybean production can be increased to reduce feed costs and make Ghanaian poultry more competitive against imports
Long Term Opportunities  Government and donor initiatives will assist investors in scaling up inclusive business models as part of the long-term developmental priority to modernize commercial agriculture. Five such opportunities have already been identified  Commercial nucleus farm and out-grower scheme for irrigated rice production and processing in Bamboi  Nucleus seed crop farm to provide extension, inputs, and processing to farmers in an existing irrigation scheme in Tono
Long Term Opportunities Block irrigated rice farms in the Lower Volta Gravity-fed irrigation for rice and banana plantations in the Accra Plains Seed production and mechanized cultivation of maize and soy in Branam
Other Investment Opportunities Technological and support services
Distribution services Standards, training and certification
Agricultural inputs Storage and haulage services Irrigation facilities Large scale farming of crops
Other Investment Opportunities Food, cocoa processing High value textiles and garments Salt production and processing Seafood Processing Warehousing facilities Marketing of processed food in international market.
What Incentives are available to Agriculture & Agro-processing Companies ?
Specific Incentives and Guarantees for Agriculture & Agro-processing – Taxes Category Agro-Processing – converting fish, livestock, crops into edible canned products, other products
No. of Years
Percentage %
5 years tax holiday
Financial Institutions- income from loan to farming enterprises
20 tax instead of 25
Farming losses
carried for five years of assessment
Tariff incentive
zero rated for agro inputs, plant and machinery in the year of investment
50
subsequent years
25
Capital allowance -plant and machinery Capital allowance -plant and machinery
Specific Incentives and Guarantees for Agriculture & Agro-processing Category
No. of Years
Percentage %
Cocoa farmers and producers
Income tax exempt
0
Cattle ranching
10 years tax holiday
0
Tree cropping (e.g. coffee, oil palm, shea-butter and coconut) Livestock excluding cattle and poultry
10 years tax holiday
0
5 years tax holiday
0
Fish farming, poultry and cash crops
5 years tax holiday
0
Specific Incentives and Guarantees for Agriculture & Agro-processing –Locational Incentives
After the initial 5-year tax holiday period, Agro-processing enterprises which use local agricultural raw materials as their main inputs shall have corporate tax rates fixed according to their location as follows: Accra –Tema
20%
Other Regional Capitals (Excluding Tamale, Wa & Bolga)
10%
Northern, Upper West and East
0%
Other Incentives and Guarantees Custom duties exemptions Graduated and reasonable corporate taxes Location incentives Tax holidays Automatic immigrant quotas Other attractive tax concessions Relief from double taxation
Other Incentives and Guarantees Repatriation of dividends and net profit Transfer of funds in respect of servicing of foreign loans Guarantee against expropriation Remittance of proceeds in the sale or liquidation of investment Strategic investment incentives
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Mrs. Mawuena Trebarh CEO Ghana Investment Promotion Centre gipcghana.com