Ghana is an emerging economy and a trade hub for much of West Africa, and agriculture is a mainstay of its economy. At the time of compact signing in 2006, the agricultural sector accounted for about 40 percent of the country’s gross domestic product and directly employed between 60-70 percent of its workforce. Owing to its ability to produce a wide variety of tropical and sub-tropical crops, Ghana appeared to have the potential to become an important supplier of fruit and vegetable products to both its neighbors in Africa and the European Union. Small farm operations, however, accounted for about 80 percent of total agricultural production and were largely dominated by rain-fed production of crops for local consumption. The average farm size was small (less than 1.2 hectares), and agricultural productivity was limited by low cropping intensity, few market linkages, and limited use of fertilizers, insecticides, high yielding varieties, or irrigation-based techniques. Additionally, high transport costs restricted access to major domestic and international markets, and poor access to basic services in rural communities reduced the ability to attract and retain entrepreneurs or workers.
To address the issues hindering the agribusiness sector in Ghana, MCC and the Government of Ghana signed a five-year, $547 million compact in August 2006 with the overall goal to reduce poverty through economic growth led by agricultural transformation. To achieve this goal, the program pursued two objectives: (a) to increase production and productivity of high-value cash and food crops in the intervention zones in Ghana, and (b) to enhance the competitiveness of Ghanaian high-value cash and food crops in local and international markets. These objectives were addressed through a set of investments in agriculture, rural development, and transportation implemented by the Millennium Development Authority, or MiDA, established by the Government of Ghana as a condition of the MCC grant. 4
The compact program built on Ghana’s Poverty Reduction Strategy and reflected input from broad and inclusive consultations. Projects were carried out in three Intervention Zones: the Northern Agricultural Zone, the centrally located Afram Basin Zone, and the Southern Horticultural Zone. The zones were selected for their high incidence of poverty and their potential as agricultural production centers.
- Original Amount at Compact Signing:
- Amount spent:
August 1, 2006
- Entry Into Force:
February 16, 2007
February 16, 2012
- 1,217,000Estimated beneficiaries over 20 years
MCC considers beneficiaries of projects to be those individuals who realize improved standards of living, primarily through higher incomes, as a result of economic gains generated by MCC-funded projects.
- $671,800,000Estimated net benefits over 20 years
“Estimated Net Benefits” is the sum of all projected net benefits accruing over the life of the project, typically 20 years, evaluated at a 10% discount rate. Estimates are reported in millions of US dollars in the year that the ERR analysis was completed.