TRENDS AND IMPACTS OF FOREIGN INVESTMENT IN DEVELOPING COUNTRY AGRICULTURE

GHANA
Trends and impacts of foreign investment in
developing country agriculture
TABLE 9
Expected employment creation by FDI projects as registered with GIPC, (in thousands)
Subsectors Cumulative
(Jan.2001–Dec 2008)
2007 2008
Ghanaian Foreign Total Ghanaian Foreign Ghanaian Foreign
Manufacturing 26.6 2.2 28.8 8.2 594 3.1 399
Service 19.3 1.8 21 1.9 233 2.9 642
Building and construction 16.1 1.6 17.6 1.6 532 7.7 430
Agriculture 184.3 435 184.7 772 67 178.9 132
Tourism 4.9 503 5.4 869 84 390 91
General trade 10.6 1.2 11.8 1.7 205 2.6 313
Export trade 2.1 245 2.4 421 30 329 56
Total 263.8 7.9 271.7 15.5 1.7 195.9 2.1
% of total 97.1 2.9 100 89.9 10.1 99 1.04
Source: Ghana Investment Promotion Centre (GIPC)
government to reduce, among others, its fiscal
deficits in the range of US$7.8 million annually.
FDI impacts have also been felt across other
subsectors of the Ghanaian economy especially
in agriculture and food security. According to
the GIPC, the expectation were for 263 798
jobs and 7 889 jobs to be created for Ghanaians
and foreigners respectively, between January
2001 and December 2008. Although agriculture
received a very small amount of investments
relative to other sectors of the economy, it is the
sector where most of the job creation was set to
take place. Thus, agriculture alone was expected
to create 184 296 jobs (Table 9) underscoring
again the crucial role FDI can play in reducing
poverty in rural areas given the relatively high
labour- intensive nature of agricultural related
activities therein.
The surge in FDI into in Ghana in recent times
has led to an increase in the levels of agricultural
outputs, the quality of a wide range of readily
available food as well as cash crop products and
the purchasing power of certain classes of people,
who are now in much better position to generate
demand for the agricultural products produced in
the country. All this is to suggest an improvement
in the state of food insecurity in the country.
This is evidenced by the fact that Ghana is one
204
of the few countries in Africa slated to meet its
MDG goal of eradicating poverty and hunger by
2015.
The next section presents an assessment of
two business models used by private investors
in Ghana drawing on case studies from: i)
the Integrated Tamale Fruit Company (ITFC)
to illustrate the nature and issues in a model
involving collaboration between a private
company and local farmers through a nucleus
estate and out-grower scheme for the production
of organic mangoes; and ii) the Solar Harvest Ltd
(formerly Biofuel Africa Ltd) which provides an
example of a production model centred on largescale
plantations.
4. Agricultural investment
business model and impacts –
evidence from case studies
This section examines key issues and impacts from
two forms of business models used by private
investors in Ghana drawing on case studies
from: i) the Integrated Tamale Fruit Company
(ITFC) to illustrate the nature and issues in a
model involving collaboration between a private
company and local farmers through a nucleus