Ghana’s agri-preneurs: connecting the dots between macro and micro

While leaving for a yearly meetup with Rabo Foundation’s portfolio partners in West Africa’s ‘Black Star Nation’, global developments were unfolding fast. At the end of February, it became clear that the majority of USAID’s foreign assistance programs were revoked, and as of today, the European Commission is not filling the gaps. Inasmuch as global power dynamics might change, the perpetual challenges that agri-entrepreneurs in growth markets face remain relentlessly systemic. Together with the smallholder farmers they support, agri-entrepreneurs are the wardens of global food security. Despite their best efforts or innovative business models, they remain vulnerable to global shocks. A few observations from my engagement with our Ghanaian partners confirmed this concern. I have labeled these observations as ‘the four Ds’.

A drought lasting over seven months put many agribusinesses to the test in the northern parts of Ghana and the Sahel region in 2024. This was unprecedented, given that second harvests of key food crops never came to fruition, impacting seasonal cash flow projections. The trend of longer drought periods with shorter rains is expected to endure, so businesses brace themselves either through climate mitigation (e.g., crop insurance against drought) or adaptation. In these conditions, the commercialization of shea nuts is a great example of adaptation, as these trees are naturally drought-resistant, wild-harvested without inputs, and sold internationally at good prices. Sommalife is leading by example on this front.

Annual inflation slowed to 23.1% in February. Despite this, the Ghanaian cedi has seen a depreciation against the USD by 150% between now and 2020. The combination of fiscal and trade deficits, hard currency shortages, and IMF bailout negotiations appears to be creating cost pressures for agri-preneurs. For over five years, Rabo Foundation has been collaborating with one of Ghana’s largest exporters of horticultural produce, who tends to avoid local banking due to the costs associated with scaling the business. To navigate these challenges, approximately 95% of the products are exported, as the local market does not seem to be competitive, even though there is a demand for fresh produce.

Essential for achieving food security, Ghana relies heavily on imported inorganic fertilizers and, to a lesser degree, on imported crop seeds. Therefore, local seed production is crucial for self-sufficiency and must be adapted to new climate realities. Maize, a key ingredient for local delicacies like banku and gari, is becoming more drought-resistant and matures earlier for harvest.

Cocoa, which contributes to about 30% of Ghana’s export revenues, has been under significant pressure recently due to disappointing harvests related to climate change, among other factors. This trend is encouraging agri-preneurs and farmers to explore other sources of income outside the cocoa season. I visited a cacao farmer group in the Sunyani region where poultry farming is being piloted. This initiative not only adds additional revenue but also addresses food security (in 2023, over 86% of Ghana’s poultry was imported).

Local realities on the ground are closely connected to global megatrends. Rabo Foundation, along with our peers, remains dedicated to enhancing the resilience of agri-preneurs against future global shocks. As we navigate increasing pressures on food security, driven by climate change, it is important to remain aware of the knock-on effects of megatrends on our partners. Despite the risks associated with drought, depreciation, dependence, and diversification, we strive to provide tailor-made solutions for Ghanaian agri-entrepreneurs and beyond.