Notwithstanding its economic potential, Agriculture has been declining in the last few years – consequently losing to the services sector its position, as the highest contributor to the country’s GDP.
The Agricultural Economist however describes this as expected – explaining that, once an economy develops, agriculture’s contribution to GDP is also anticipated to decrease for industry to take over and spearhead economic growth.
According to him, agriculture losing its status as the highest contributor to GDP should therefore not necessarily be of concern as opposed to what caused it. “Unfortunately the decline has not been because we are now processing more or industry is growing.
When you have the forward and backward linkages well integrated, agriculture will decline and even offload its labour force to industry which will invariably then grow. So, you have that organic relationship which is good. For a resource-rich country like Ghana, this should have been the normal trajectory compared with another country not endowed with resources and therefore can allow the services sectors to lead growth.
So in our case it’s an abnormality and need to try and correct it,” he explained. He blames the anomaly on reduced investment in agriculture and promotion of imports. “Banking, insurance and other financial services are offering their loans and services to importers rather than producers because of the decline in local manufacturing.
The warehouses that have historically stored products from the domestic factories have been sold out and turned into churches as witnessed at North Kaneshie here in Accra. The remaining few too no longer house domestic goods but imported ones. It tells you that we are not producing to fill them.
This is not by accident. The 1980 Economic Recovery Programme and the 1990 Structural Adjustment Programme which were hailed by the World Bank and others fundamentally made us liberalize the economy to cause these,” he averred. He however disagrees with suggestions that the services sector over-taking agriculture in terms of contribution to the GDP disproves the pivotal role agriculture has been hailed to play in economies.
“This gives impetuous to advocates of the services sector to call for more investments in that sector at the expense of agric. But the difference here is that, the growth in the services sector hasn’t created the type and number of jobs required.
The movement from the rural to urban areas and the social vices witnessed in our cities today are all because these people have come to look for jobs. So the argument is that, take the jobs to them where they are. That is what agriculture can do but services doesn’t necessarily because it is concentrated in urban areas,” he emphasized.
The Agricultural Economist maintains, Ghana thus has no option but to still prioritize agriculture as the foundation of the economy. “As things stand now, we have no choice than to look at agriculture as backbone of the economy and that is why government’s focus on agriculture is commendable. The only option for us today, is to use agriculture to build industry and stabilize our economy,” he noted.
