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 (MOU) during president Cyril Ramaphosa’s state visit to Ghana, and the bilateral relations on agriculture could soon see local farmers export more produce to the West African country.
According to Reggie Ngcobo, spokesperson for the department of agriculture, land reform and rural development, the African continent boasts rich natural resources and vegetation which enables it to produce diverse agricultural commodities in its different regions. If implemented, the MOU is thus expected to contribute towards food security in the two countries and their respective regions.
“It also creates possibilities for trade among member countries on the continent,” he said.
It must be noted that certain private sector companies and individual entrepreneurs are already operating in Ghana, Ngcobo says. “Our interest is to grow our footprint in primary agriculture and agribusiness.”
A joint management committee will be put in place by January next year (2022) to develop an operational plan that is drawn from the signed MOU. “The issues that will be covered in the operational plan will specify the commitments between 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 South Africa’s agricultural products in Ghana.
As it stands, Mzansi is already the largest African purchaser of Ghanaian exports, and the third largest importer of Ghanaian products globally.
According to an agricultural economist at the National Agricultural Marketing Council (NAMC), Lucius Phaleng, Ghanaian exports into south Africa grew faster than to any other major trading partner. The aim is to capitalise on this growth to position both markets as leading drivers of exports, he says.
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, “The majority of the commodities’ export potential have not been realised. This is with the exception of fresh apples (100%), cider (77%) and prepared sauces (71%).”
Currently, South Africa’s agricultural exports to Ghana amount to about 38 million US dollar. The main exported products include fresh apples of $6.3 million, undenatured ethyl alcohol of $4.2 million, a mixture of fruit juices of $3.4 million, corn seed of $2.9 million and food preparations of $2.3 million.
South Africa is responsible for 1.2% of Ghana’s total imports, which he believes shows that agricultural exporters have not explored ways to improve South Africa’s performance in that market destination.
“One of the challenges to reach Ghanaian markets is high tariff duty and transactional costs, including the logistics.” He maintains that it is critical to explore some of the agricultural products that show potential to be exported to Ghanaian markets.”
| Potential agric. products | Actual exports (US$’000) | Untapped potential (US$’million) | Realized potential (%) |
| Cane or beet sugar | 838.3 | 18.6 | 2% |
| Raw cane sugar | 8.2 | 2.0 | 0% |
| Margarine (excl liquid) | 57.9 | 9.1 | 1% |
| Sunflower seed | 43.7 | 2.2 | 2% |
| Undernatured ethyl alcohol | 2.7 | 8.9 | 24% |
| Wine | 7 million | 1.3 | 56% |
| Hake | 3.3 | 5.6 | 0% |
Exchange of experience and knowledge
Ngcobo highlights that the ability to produce and to add value to agricultural commodities differs from one country to the next. Therefore, bilateral relations are an instrument that can assist in the sharing of knowledge and expertise by both the public and private sectors.
“These MOUs are instruments that create an enabling environment in which the countries can share technical expertise and knowledge in the field of agriculture and agribusiness.
“The MOU also create possibilities of exchange between farmers in South Africa and the countries with whom they have an MOU,” Ngcobo says.
Some of the technical issues that the MOU will address include regulatory measures that support two-way agricultural trade and investment. South Africa’s producers and agribusinesses are also interested in the implementation of the African Continental Free Trade Agreement, Ngcobo further points out.
The signing of the MOU is furthermore seen as one of the instruments that can help accelerate the implementation of the Comprehensive African Agricultural Development Programme (CAADP), which is a flagship of the African Union Development programme NEPAD.
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