Books and Book Chapters

× Ghana’s Economic and Agricultural Transformation: Past Performance and Future Prospects explores the challenges and opportunities of Africa’s transformation through an integrated economic and political analysis. Using Ghana as a case study, a wide range of primary and secondary data used to look at the potential of urbanization, the role of public investments, government support for value chain development, and government commitment to agriculture sector transformation. Agriculture offers real options for transformation, and this book examines the viability of those options given political-economy constraints, past investment decisions, and the broader global environment in which Ghana, and Africa, must now compete.

× Most of the evidence presented in this book about changes in the agricultural sector draws on secondary data and nationally representative household surveys like the GLSS. This chapter seeks to ground the truth of some of the key findings by providing village and farmer perspectives on important changes that have impacted on their livelihoods since the 1980s, and how they have adapted their farming systems and practices. The chapter also addresses several key questions. What were the key factors driving farmers’ adaptation decisions, including the roles of changes in population density and the availability of additional land for cultivation, improved access to markets, changing market demands, increased competition for labor from the rural nonfarm economy, and higher wages? Why, despite continuing rural population growth, have farmers generally chosen to adopt technologies and farming practices that increase labor productivity relative to land productivity? Finally, what happens once options for bringing more land into production become exhausted?

× This chapter has shown that Ghana’s reputation for upholding political rights and civil liberties since the country’s democratic transition in 1992 is well deserved. As Africa’s only institutionalized two-party system, competitive elections have enforced a commitment to the poor and a broad swathe of voters, evidenced by an impressive national health insurance scheme and an extensive social transfer program. Resources also have been heavily invested in health and education, resulting in substantial improvements in social outcomes. Foreign direct investment is attracted by the country’s political stability and openness. Compared to the country’s years of political instability prior to the 1980s, when ideological differences resulted in high levels of policy volatility, substantive partisan differences between the NDC and NPP have narrowed on key issues. As Throup et al. (2014: 155) note with respect to agriculture, there is now a bi-partisan consensus on key policies: “the peasantry must be encouraged, nontraditional crops must be promoted, development must be brought to the North [through the Savannah Accelerated Development Authority], and investment on infrastructure should be prioritized.”

× The chapter addresses three broad questions. First, are patterns of rural employment in Ghana changing with urbanization and are those changes related in any systematic way with proximity to urban centers of different sizes? Second, does proximity to different-sized urban centers have any impact on patterns of agricultural intensification? Finally, what are the impacts on household livelihoods and welfare outcomes? To answer these questions the analysis goes beyond the usual agroecological breakdown (Chapter 4) and uses a spatial typology of rural areas based on work by Berdegue et al. (2015) and others in Latin America.

× As in most of Africa, agricultural mechanization in Ghana has been slow to develop, either in the form of animal or tractor power. But this has changed markedly since the early 2000s, and today about one third of all Ghana’s farmers report using some form of mechanization, mostly tractors for land preparation, as do over half the farmers with five or more hectares of cropped land. However, policymakers often are skeptical of the role played by the private sector in providing mechanization services and worry that supplyside issues may be constraining its uptake, especially amongst smaller-sized farms. With this in mind, the government recently started to directly engage in the importation and subsidization of tractors, and has established a network of subsidized agricultural mechanization service centers around the country (Diao et al. 2014). The government program operates in direct competition with an already established private sector supply system, and this raises a number of important questions. In particular, is the government program overcoming some inherent market failure problems or is it introducing market distortions in machinery prices, encouraging rent-seeking behavior and possibly crowding out more efficient private suppliers? If the latter, then as suggested in Chapter 6, the program may be an unnecessary and costly addition to the financial burden of the public sector.

× Chapter 2 shows that the predominant source of labor productivity growth in Ghana has come from productivity increases within sectors, with the agricultural sector showing a particularly strong performance. Rodrik attributes this source of growth to what he calls “fundamental capabilities,” or the longer-term benefits from investments in better institutions, healthier and better educated workers, technologies, and more enabling policies. Another source of productivity growth arises from the movement of workers from low to higher productivity sectors, (e.g., from traditional agriculture to manufacturing). Rodrik calls this the gains from “structural change,” which result from changes in the relative importance of different sectors in national income and employment.

× This final chapter pulls together the main findings of the book, highlights future challenges and opportunities for Ghana, and provides some guidance on the kinds of strategic changes that might help the country’s efforts towards more sustained structural change. It also concludes with some reflections on what the Ghanaian experience suggests for the rest of Africa.

× The future sustainability of the current patterns of agricultural growth is constrained by the availability of remaining virgin and fallow land for future expansion of the cropped area. As the land frontier runs out, farmers will need to shift towards more intensive modes of production, and options will need to include higher-yielding technologies and a greater focus on high-value products. The economic viability of these options will depend on government policies towards agricultural R&D, infrastructure, and value chain interventions that condition access to modern inputs and urban markets and their costs, and trade policies that condition the level of competition farmers must face in their domestic markets. These policies will need to be cognizant of the needs of the changing nature of Ghanaian agriculture. As more small farm households are attracted into nonfarm activities, farms become more consolidated, rural wages rise, and rural youth become better educated, more emphasis will be needed on the development of technologies and commercial farming practices that raise land as well as labor productivity, are attractive to young farmers, and meet the needs of Ghana’s increasingly urbanized food system.

× This chapter examines past patterns of public spending on agriculture in Ghana, and asks whether Ghana has invested enough resources in agriculture and how the patterns of investment in the sector have impacted agricultural productivity growth.

× This chapter examines and compares four important but different types of value chains in Ghana: two export crops—cocoa and pineapples, and two import-substitution crops—rice and tomatoes. Apart from cocoa, these crops have under-exploited opportunities, and we examine the opportunities and constraints along their value chains, and the roles that the public sector has or might need to play. This leads to some more general conclusions about the best ways to develop these and related agricultural value chains in Ghana.

× Why have African economies developed in this way and why has industrialization been so difficult to achieve? And if industrialization is going to be difficult to achieve for African countries, what viable policy options exist to generate sustainable structural transformations in the region? To tackle these important questions in a tractable manner, this book focuses on the experience of one country—Ghana—and examines the country’s overall economic performance since it went through a major Structural Adjustment Program (SAP) in the early 1980s and provides a detailed analysis of the performance of the agricultural sector. In so doing, the book aims to explain why Ghana has not transformed its economy more substantially, why its agriculture sector— beyond cocoa—has not played a greater role, and what it must do in the future if it is to continue with a successful transformation. Addressing these puzzles requires integrating economic and political analyses. Finally, the book considers what the rest of Africa can learn from Ghana’s experience.

× Chapter 7 reflects Ghana’s later stage of development by focusing on the link between urban development and the livelihoods available to rural youth living close to cities or towns.

× After almost 20 years of declining cocoa production, Ghana has been able in the last decade to increase the share of export prices going to producers, more than doubling production. Contrary to Washington Consensus prescriptions, these accomplishments were achieved through reforms but without liberalization of domestic and export marketing. The Cocoa Coast: The Board-Managed Cocoa Sector in Ghana seeks to understand the success of a sector that was not liberalized. The authors identify three major reasons for Ghana’s success in cocoa production. First, cocoa producers receive an increasing share of export prices, because of factors including a stakeholder-advised process for determining producer prices that also pays explicit attention to discouraging smuggling of cocoa to neighboring countries and the popular perception that cocoa performance is tied to the country’s general economic performance. Second, the Ghana Cocoa Board (COCOBOD) has a policy of retaining a portion of producer revenues to promote the adoption of yield-enhancing measures. Third, centralized marketing and maintenance of the high export quality for which Ghana is known enables the country to offer stable prices to producers and opportunities for local businesses to participate in the sector and retain some power in the global value chain.

× After almost 20 years of declining cocoa production, Ghana has been able in the last decade to increase the share of export prices going to producers and more than double production. Contrary to Washington Consensus prescriptions, these accomplishments were achieved through reforms that did not include market liberalization. In The Cocoa Coast: The Board-Managed Cocoa Sector in Ghana, the authors identify factors that have contributed to Ghana’s success in cocoa production. These include the accountability of the government for the sector’s performance (cocoa-sector performance being seen as a key dimension of economic management), its interest in maintaining the ability to raise funds globally as a reliable supplier of high-quality cocoa, and its policy of retaining a portion of producer revenues to promote the adoption of yield-enhancing measures. The authors also suggest how Ghana can improve the efficiency of the cocoa sector through measures such as increased transparency and curtailing services that would be better provided by the private sector. The Cocoa Coast will be a valuable resource for policy makers, development specialists, and others interested in different national development paths.

× Several Sub-Saharan African nations have experienced increased economic growth and political stability in recent years compared with the stagnation and turmoil of previous decades. Ghana is one of the biggest success stories of the region; the nation has enjoyed an annual average of five percent economic growth for the past 20 years and will probably be the first Sub-Saharan African country to achieve the Millennium Development Goal of cutting poverty in half by 2015.