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Sowing Solutions: How Agriculture Can Curb Ghana’s Cost of Living Crisis

The increasing cost of living in Ghana has become a pressing concern for citizens and policymakers alike. To address this challenge, Professor Godfred Bokpin, a respected economist and finance expert, is calling on the government to place agriculture at the center of its economic recovery strategies.

He emphasizes that a renewed focus on agriculture could alleviate household financial pressures, generate jobs, and promote long-term economic stability. Speaking on Joy FM’s *Super Morning Show* on November 20, 2024, Prof Bokpin highlighted that the incoming government, regardless of the election outcome, must act decisively in the first quarter of its tenure. He stressed that prioritizing agribusiness could be a game-changer for Ghana’s economy, particularly in reducing food prices, which currently account for up to 44% of the average Ghanaian’s disposable income.

“If food prices are brought down significantly, it would have a direct and immediate impact on the lives of Ghanaians,” he noted. “Lower food costs free up household incomes, enabling families to save, which is crucial for both short-term relief and long-term economic growth.”

The Importance of Savings and Economic Stability

Prof Bokpin explained that low household savings remain a significant obstacle to economic development. When individuals lack savings, they are unable to invest or take advantage of emerging economic opportunities. This, in turn, hampers overall capital accumulation in the country. Addressing food price inflation could, therefore, not only improve living standards but also encourage a culture of saving that is essential for sustained economic progress.

Beyond food security, Prof Bokpin underscored the untapped potential of agro-processing. Modernizing agriculture and promoting agro-industries could create formal employment opportunities and enhance tax revenues. Although agriculture contributes about 26% of Ghana’s Gross Domestic Product (GDP), its informal nature results in less than 1% of tax revenue.

“Agriculture is inherently job-rich,” Prof Bokpin explained. “By formalizing and modernizing this sector, we can create stable jobs while increasing government revenue streams. This is critical for reducing Ghana’s reliance on external borrowing and ensuring financial independence.”

Addressing Structural Challenges

Prof Bokpin also identified inefficiencies in public spending as a barrier to economic progress. He pointed to inflated costs of infrastructure projects, such as interchanges, as examples of wasteful expenditure that could be better allocated to support the agricultural sector. By redirecting funds to enhance agricultural productivity, Ghana could achieve a dual benefit of reducing public debt and stimulating economic activity.

Agriculture, he argued, should be a top priority for any government serious about addressing poverty, inequality, and long-term economic growth.

Challenges Facing Ghana’s Agricultural Sector

Despite its pivotal role, Ghana’s agriculture sector faces significant hurdles. Climate change, outdated farming practices, ageing farmer populations, and limited access to modern technology have hindered productivity. Most Ghanaian farmers operate as smallholders, relying on traditional methods that are both time-consuming and inefficient. Furthermore, post-harvest losses caused by inadequate storage and poor transportation infrastructure exacerbate the challenges, leading to wasted produce and reduced income for farmers.

Recognizing these issues, the government has implemented initiatives such as the *Planting for Food and Jobs (PFJ)* programme to stimulate food production, reduce reliance on food imports, and create employment. While these efforts have shown promise, more comprehensive strategies are required to address systemic issues and fully harness agriculture’s potential.

The Path Forward

Prof Bokpin’s recommendations come at a critical time for Ghana, as rising inflation continues to erode purchasing power and deepen economic inequality. By prioritizing agriculture, the government could unlock significant opportunities for economic transformation. Investments in modern farming techniques, agro-processing industries, and infrastructure development would not only reduce food prices but also create jobs and boost government revenues.

Ultimately, agriculture remains a cornerstone of Ghana’s economy. With proper planning and investment, it could serve as the foundation for tackling the country’s rising cost of living, fostering financial independence, and driving sustainable growth for years to come.

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Source: Myjoyonline.com