14 04 29 1120 gipc agribusiness investment summit presentation

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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


Invest in 3 easy steps Incorporate, contribute and register


Investment in Ghana  Step 1 - Registration with Registrar General's Department  Step 2 - Minimum Equity Contribution for foreigners  Step 3 – Registration with GIPC


Why Ghana? Your Prosperity Partner


Did you know? The “center of the world” is just off the coast of Ghana


Ghana is……  Middle income country  West Africa’s 2nd largest economy and market  Best destination for ease of doing business in West Africa - World Doing Business Report 2014  Among the top 5 destinations for doing business in Sub-Sarahan Africa  Populated with 25.28m people  60% employed  11% unemployment rate  28,026,482m mobile subscribers  Receiving significant FDI inflows  Increase of 58% from 2010 to 2013


Middle-Income Country Growth GDP Growth Rate 8 7 6 5 4

GDP Growth Rate 6.8

3

5.5 4.6

2

4.2 3.3

1 0 Ghana

Cameroon

Senegal

Botswana

South Africa


Ghana Has…  A stable political environment with economic stability  Good infrastructure and favourable labour conditions  Strategic global positioning and readily available finance and funding  Sound business-to-business services structure and access to land  Good quality of life and safety  Many investment opportunities


Ghana also offers you…  Access to a large and vibrant ECOWAS market  A country that is blessed with its strategic position:  6 hours from Europe  6 hours from South Africa  9 hours from the USA  8 hours from the UAE

 A country that is described as the “beacon of hope” for Africa


Only Ghana offers you…  A prosperity partnership  A team focused on “Win-Win” relationships  An IPA that:  Builds its corporate culture on service excellence to investors  Allocates a personal consultant to assist investors all the way

 A country that is known for “Akwaaba” – where investors are always welcome


Join our other partners‌


Ghana Investment Promotion Centre, Public Services Commission Building, Ministries, Accra, Ghana P.O. Box M193 Accra, Ghana T +233 302 66 5125 – 9 F +233 302 66 3801 E info@gipcghana.com

Contact us today

www.gipcghana.com


Thank you

Mrs. Mawuena Trebarh CEO Ghana Investment Promotion Centre gipcghana.com


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