South Africa has set the table to unlock a new market for some of its agricultural products: Ghana.
The two countries recently signed a memorandum of understanding during President Cyril Ramaphosa’s state visit to Ghana, and bilateral agriculture ties may soon see local farmers exporting more produce to the African country of the west.
According to Reggie Ngcobo, spokesperson for the Department of Agriculture, Land Reform and Rural Development, the African continent has rich natural resources and vegetation that allow it to produce various agricultural products in its various regions. If implemented, the MoU should therefore contribute to food security in both countries and their respective regions.
“It also creates opportunities for trade between member countries of the continent,” he said.
It should be noted that some private sector companies and individual entrepreneurs are already operating in Ghana, says Ngcobo. âOur interest is to develop our footprint in primary agriculture and agro-industry. “
A joint management committee will be set up by January of next year (2022) to develop an operational plan drawn from the signed memorandum of understanding. âThe issues that will be addressed in the operational plan will specify the commitments between the parties. “
What Ghana needs
It is reported that Ghana’s economy is in pieces, mainly due to the poor performance of agriculture in the country. As a result, many opportunities exist for agricultural products from South Africa to Ghana.
At present, Mzansi is already Africa’s largest buyer of Ghanaian exports and the world’s third largest importer of Ghanaian products.
According to an agricultural economist with the National Agricultural Marketing Council (NAMC), Lucius Phaleng, Ghanaian exports to South Africa have grown faster than those of any other major trading partner. The aim is to capitalize on this growth to position the two markets as the main engines of exports, he said.
The agricultural products with the greatest export potential from South Africa to Ghana are cane or beet sugar, followed by raw cane sugar and margarine.
Phaleng says, âThe majority of the commodity export potential has not been realized. This with the exception of fresh apples (100%), cider (77%) and prepared sauces (71%).
Currently, South Africa’s agricultural exports to Ghana amount to around US $ 38 million. The main exported products are $ 6.3 million fresh apples, $ 4.2 million undenatured ethyl alcohol, $ 3.4 million fruit juice blend, corn seeds of $ 2.9 million and food preparations of $ 2.3 million.
South Africa is responsible for 1.2% of Ghana’s total imports, which it says shows that agricultural exporters have not explored ways to improve South Africa’s performance in this market. of destination.
âOne of the challenges in reaching Ghanaian markets is the high tariffs and transaction costs, including logistics. He maintains that it is essential to explore some of the agricultural products that have export potential to Ghanaian markets.
|Agricultural potential. some products||Actual exports (US $ ‘000)||Untapped potential (millions of US dollars)||Realized potential (%)|
|Cane or beet sugar||838.3||18.6||2%|
|Raw cane sugar||8.2||2.0||0%|
|Margarine (except liquid)||57.9||9.1||1%|
|Denatured ethyl alcohol||2.7||8.9||24%|
Exchange of experiences and knowledge
Ngcobo points out that the ability to produce and add value to agricultural commodities differs from country to country. Therefore, bilateral relations are an instrument that can help the sharing of knowledge and expertise by the public and private sectors.
âThese MoUs are instruments that create an enabling environment in which countries can share their technical expertise and knowledge in the field of agriculture and agribusiness.
âThe MoU also creates opportunities for exchange between South African farmers and the countries with which they have MoUs,â Ngcobo said.
Some of the technical issues the MOU will address include regulatory measures that support agricultural trade and investment in both directions. South African producers and agro-industries are also interested in the implementation of the African Continental Free Trade Agreement, says Ngcobo.
The signing of the MoU is further considered as one of the instruments that can help accelerate the implementation of the Comprehensive Africa Agricultural Development Program (CAADP), which is a flagship of the African Union development program. NEPAD.
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