For the first time since 2014, the agriculture sector has overtaken the two other sectors – industry and services – in growth, signaling that the ailing sector is now showing some recovery.
Data released by the Ghana Statistical Services (GSS) have shown that the agriculture sector grew by 5.9 percent (from the 3.1 percent the previous quarter), whereas industry and services both grew by 5.7 percent in the third quarter of 2019. The last time that agriculture recorded growth higher than the two sectors was during the first quarter of 2014 when it grew by 8.2 percent, while industry contracted by 9.9 percent and services grew by just 2.6 percent.
The 5.9 percent growth is also the highest the sector has seen since the third quarter of 2017, as all growth figures prior to that have been below it. Peering into the figures further, it is observed that the fishing sub-sector also overturned its recent contraction and recorded a 0.4 percent growth. Little, though it is, it is a step forward as the fishing sector has not seen any growth in the past one year.
“There are several factors, but the most important reason is the confidence. Letting the farmers or other stakeholders know that you are serious and that you have put a lot of action into place such as the Planting for Food and Jobs and others to try to revamp the agriculture sector is now gaining grounds.
And I think it will continue to grow because of the campaign to eat Ghana rice and everything is on foot to push that agenda in terms of packaging, milling, among others. The agriculture sector should push the whole economy,” he said in an interview with the B&FT.
In terms of overall contribution to the economy, however, the agriculture sector still trails the other two sectors. It added GH¢14.7 billion to the economy between July to September 2019, representing 18.5 percent of GDP. On the other hand, industry added GH¢28.4 billion which is 35.7 percent of GDP, whereas the services sector maintained its dominance by adding GH¢36.7 billion, representing 45.8 percent.
What this essentially means is that, the agriculture sector is still far behind the other sectors, even though, it has been touted as the backbone of the economy. One of the major causes of this is the lack of interest from the financial sector in supporting agriculture, as it is considered a high-risk area for many banks.
In fact, a recent Banking Sector Report published by the Bank of Ghana (BoG) has shown that banks still see the sector in an unfavourable light as the share of banks’ credit that went to the sector was just a measly 4.5 percent, compared to the commerce and finance sector which received the highest share of 22.9 percent of total credit, followed by the services sector with a share of 22.1 percent as of end of June this year.
Agriculture’s third quarter growth of 5.9 percent further indicates that, if more efforts are made in supporting players in the sector with the needed financial assistance, it will live up to its tag as the backbone of the economy.
B&FT