Concluding Remarks and Way Forward

1. Concluding Remarks and Way Forward Ghana Strategy Forum: The Role of Agriculture in Achieving Middle Income Status November 16, 2007 Accra

2. Outline • What we have learnt:- Critical role of agriculture in attaining middle- income (MIC) status - Composition of subsector within agriculture matters - Regional growth pattern matters - Mobilization and allocation of investment to support growth - Improvement of governance and institutions • Knowledge gaps and way forward Page 2

3. Role of agriculture in attaining middle-income (MIC) status • Reaching MIC requires broad-based economic transformation across the manufacturing, services and agricultural sectors: • Transformation: resources and labor move from traditional to modern sectors • Given agriculture’s large share of economy, it is impossible to have rapid economy-wide growth without accelerating agricultural growth • Agricultural growth is a pre-condition for any economy to take off (India, China) • Considerable room to promote growth in agricultural sector in Ghana • Improve productivity through modern inputs, technologies, irrigation, sustainable land management. • Structural shifts to high value production • Improve the delivery of services to smallholders and develop new ways to include smallholders in more efficient value chains • Growth in the agricultural sector requires strong support from the government to raise agricultural productivity and encourage structural transformation • Structural transformation in successfully transforming countries rarely just market-driven • Critical role of government in Asian green revolution Page 3

4. Composition of subsector within agriculture matters • Opportunities to accelerate growth in export-oriented agriculture exist but domestic agricultural sub-sectors, such as staple foods, have much stronger growth-multiplier effects • Domestic market-oriented agriculture supports overall growth by: • Lowering food prices • Competing with imports • Providing cheap inputs for manufacturing • Natural limits to export-led growth based on primary products, therefore: • Diversifying Ghana’s export structure is needed for exports to become an engine for accelerated growth and structural change • Government must search for policies that promote private entrepreneurship and investment (foreign and domestic) in new activities with dynamic international demand Page 4

5. Regional growth pattern matters • North/South divide in Ghana’s development • Export-led growth in South not trickled down to North in form of higher incomes • Current growth path will lead to greater regional income divergence and further concentrations of poverty in the North • To overcome income disparities and to foster growth/poverty reduction in North, Ghana needs to make agricultural growth more inclusive by focusing on: • Lagging regions and household groups that may be left behind in growth process • Activities that benefit majority of farmers/smallholders, such as cereal production, livestock and nontraditional cash crops that are typically grown in North • Regional liberalization Page 5

6. Increased investment to support needed agricultural growth Increased investment for (not just in) agriculture • agricultural research and extension programs are needed to support the accelerated growth • Improved infrastructure, irrigation, and development of input markets • Improved rural education • Focus on poorer regions Page 6

7. Improvement of governance and institutions • For Ghana to reach MIC status => coordination between increasingly complex macroeconomic, industrial and financial market policies • To implement these such complex policies, Ghana needs to overcome political, administrative, and fiscal feasibility challenges through: • Decentralization (political, administrative and fiscal) • Increased use in political decision processes of policy research results on inclusive growth • Improved capacity of (i) administration to supply services and (ii) farmers to demand services • Overall, more attention needs to be paid to the specific requirements of the agricultural sector • Role for public agencies and civil society organization in facilitating cooperation among stakeholders and between stakeholders and agribusinesses • Help to improve the governance systems of these arrangements Page 7

8. Way Forward 1 • Knowledge Gaps: • How to set up knowledge and information (including data) support system to support the formulation and implementation of various development strategies • Need to evaluate returns to investment in nonagricultural sectors. • How to mobilize resources to support pro-poor growth: reform od tax system. • How climate change, high-energy prices, the rise of new players like China, India, Brazil affect growth and the poor in the country • How urbanization affects rural growth and poverty reduction` Page 8

9. Way Forward 2 • Need to strengthen the national capacity • Demand side: -politicians -government officials -civil societies -private sectors • Supply side: -government institutions -universities -thinktank culture Page 9

10. Way Forward 3 • Mutual Learning and cooperation with other developing countries • Ghana as a successful case for other developing countries • Regional cooperation with other African regions • Asia/LAC Page 10