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UNIDO Addresses Challenges In Wood sector

Reflex Eco Group – Ghana News

by Samuel Boadi (local journalist)

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The UNIDO Trade Capacity Building Programme for Ghana hosted stakeholders in the wood industry to a day’s workshop in Kumasi with the aim of helping identify gaps and areas that require intervention in the wood/timber value chain and facilitate competitiveness of the industry.

The workshop was organized in collaboration with CSIR Forestry Research Institute of Ghana (FORIG) for participants drawn from the private and public sectors.

The representatives came from the wood industry, academia, science associations and institutions.

“Trade in timber products contributes significantly to the Gross Domestic Product of Ghana and despite the availability of high quality wood species, the quality of wood and furniture products in the country is rather low,” said the National Project Coordinator of the programme for Ghana, Victor Mills in his remarks at the workshop.

“UNIDO intends to identify the main challenges and draw up activities that will add value to the industry for easy access to local and international markets.”

He added that one of the most important factors that affect value addition to wood products is the lack of an accredited testing center in the country to ensure that standards are complied with in the manufacture and processing of wood products.

He said as part of the programme, Berne University of Applied Sciences, Architecture, Wood and Civil Engineering (BFH-AHB), Switzerland is partnering FORIG to upgrade and accredit its existing lab to conform to the requirements of ISO 17025:2005- General requirements for the competence of testing and calibration laboratories.

The first phase of the UNIDO/MOTI TCB Project assisted a number of laboratories at the Ghana Standards Authority to gain accreditation to ISO 17025:2005.

The programme also established a Certification Body within GSA (GSA-MSCS).

The Scheme is accredited to certify systems to the ISO 9001:2008 and ISO 22000: 20005.

The Swiss Government (SECO) is funding the trade capacity building programme, which is being implemented by UNIDO in collaboration with the Ministry of Trade and Industry (MOTI).

The programme contributes to the development goal of supporting Ghana’s integration into world markets by developing a sustainable and competitive export economy compliant with trade-related standards.

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Put Up Modern ICT Infrastructures

Reflex Eco Group – Ghana News

by Cephas Larbi (Local Journalist)

This Blog is sponsored by

Mr. Paul Victor Obeng, Chairman of National Development Planning Commission (NDPC), has called on African leaders to raise sufficient resources to put up modern Information Communication Technology (ICT) infrastructure for citizens to realize their potentials and improve sustainable livelihood.

However, he said, in as much as there is the need to expand broadband services, the consequences of cyber security must not be taken for granted.

Mr. Obeng who made this known at a Regional Development Forum and Regional Preparatory meeting in Accra said given that ICT has become a dynamic tool for stimulating economic growth, African governments must champion development of infrastructure and make its user friendly.

He urged African leaders to place people at the centre of learning ICT to enhance sustainable development and improve quality of lives on the continent, adding that development without people at the centre is an aberration.

Mr. Obeng said governments could translate textbooks into ICT compatible for use at all levels of the educational ladder, and introduce ICT at early stages for children.

Mr Braimah Sanou, Director, Telecommunications Development Bureau, International Telecommunications Union (ITU) said countries must develop local content to suit the aspirations of respective environments.

He said “this would ensure proper applications of ICT in financial institutions, education, healthcare delivery, transportation, agriculture and other sectors of the economy”.

Mr Sanou said ICT must be defined in a way to stimulate social and economic improvement of the people and to make equal opportunity and access a guiding principle.

The conference, which was on the theme “ICT for development and empowerment of Africa,” gave stakeholders an opportunity to share knowledge and experience on ways of enhancing Broadband sustainability, Broadband Applications for Development Empowerment and create a safer cyberspace.

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Ghana: Fruit processing companies look offshore for fruits

Reflex Eco Group – Africa News

Antony Sedzro (Ghanaian journalist)

This Blog is sponsored by

Ghana’s pineapple production and exports have slumped to the lowest in nine years, throwing more than 500,000 people, mostly farmers out of job.

Not only has the situation denied the country the millions of dollars it used to receive in foreign exchange, the economy has lost some fruit processing companies, with the surviving ones struggling to get raw materials to process.

Processing companies such as Blue Skies, HPW, Peelco and Pinora have had to import more than half of their raw materials such as mangoes, pineapples and papaya (pawpaw) as they struggle to source them locally.

Other processing companies in Adeiso in the Eastern Region, Nsawam, Asamankese and Tema have all folded up for lack of raw materials that can make them competitive.

Industry value chain actors told the GRAPHIC BUSINESS newspaper that the worsening condition was due to the lack of financing for cultivation, low quality inputs, especially pineapple suckers and the age-old challenge of the country not adapting quickly to a new variety now preferred in Europe, the MD2, developed by Costa Rica.

An acre of pineapple farm requires between GH¢8,000 and GH¢9,000 to cultivate. This has put the thousands of farmers out of the farm, even though there is huge market for fresh pineapples and other horticultural produce locally and internationally.

Currently, the country only exports about 35,000 tonnes of pineapple a year, with exporters reducing from 50 in 2004 to about 15. Employment in the industry has significantly slumped from about 600,000 to about 60,000.

Chief Agronomist at Blue Skies, Mr Ernest Abloh and the Head of Administration and Control at HPW Fresh and, Mr James Obeng, told the GRAPHIC BUSINESS in separate interviews that their sources of fruits to supplement what they get locally were Cote d’Ivoire, Burkina Faso, Togo and Benin

Mr Abloh said Blue Skies had just sealed a deal to air-lift 120 tonnes of mangoes a week from Brazil for 10 weeks, mainly due to inadequate local supplies and from the sub-region, especially during the crop’s off seasons.

GRAPHIC BUSINESS newspaper investigations revealed that the lack of credit is the principal challenge facing the industry, since pineapple cultivation is capital intensive.

Blue Skies, which has the capacity to process 30 tonnes of fresh pineapple a day for export, is only doing 20 tonnes a day. Last month, the company laid of over 400 workers due to lack of raw materials for off peak production.

HPW, a Swiss company which used to export fresh fruits from Ghana, had to make a hard U-turn to dry fruits – pineapple, mango and coconut.

“Ghana’s fruit industry consists of a huge amount of small farmers often with a weak set-up and very few large and professional fruit growers/exporters. Our demand of more than 6,000 tonnes of fresh fruit is substantial for the industry,” top company officials told the GRAPHIC BUSINESS at the factory at Adeiso.

Exports of fresh pineapples reached the highest in 2004 with 71,000 tonnes a year, making Ghana the second largest exporter of the produce, after Cote d’Ivoire. These exports raked in approximately US$50 million to private sector exporters.

The Director of Export Marketing and Quality Awareness Project, (EMQAP) Ministry of Food and Agriculture (MoFA), Mr Mawuli Agboka, told the GRAPHIC BUSINESS that although finance was a challenge for the farmers, the project was making very holistic intervention in the horticultural sub-sector.

According to Mr Abloh, the company cited its operations at the current location because of proximity to raw materials, but with time, productivity had dipped, particularly after the world demand shifted to MD2 from the smooth cayenne that Ghana used to export.

He said the company got its extra fruits from other countries, but had started “a vertically integration” to produce its own raw materials.

“We didn’t want to go into production ourselves, but now we have to do it. We already cultivate all our raw material needs for passion fruit,” Mr Abloh said.

Infrastructure abandoned

Huge edifices of pack houses and cold chains constructed in some pineapple and mango growing areas with grant from the United States government are lying idle, with the low productivity.

Some farmers have also converted their farms to grow other crops or sold them for estate development.

This is prevalent in Samsam, a village near Nsawam, where the GRAPHIC BUSINESS found some farmlands turned into sand winning pits or for the construction of residential property.

Centre of excellence

The GRAPHIC BUSINESS gathered the industry has no centre of excellence to bring best practice to the industry including tissue culture, multiplication of planting materials and other specialised studies.

Blue Skies has built one ultra-modern centre of excellence for mango, but until now the Ministry of Agriculture has not posted scientists and other personnel to make the centre functional.

Currently, the fresh fruit company has its own centre of excellence with which it supports its out-growers.

But the Director of EMQAP said the project had a number of interventions to increase productivity and make best practice part of the horticultural sub-sector.

He said the seven-year EMQAP project was tackling infrastructure, technology, provision of inputs and technology to support the industry.

For example, to make pineapple planting materials available, EMQAP was helping four farmer groups in the Ga West and Akwapim South districts to multiplicate planting materials.

The project has given each group 44,000 plantlets which could be multiplied six times as well as inputs. This intervention is expected to affect over 200 farmers.

Mr Agboka said EMQAP was also supporting the Crop Research Institute in the Ashanti Region to do maintenance breeding of selected crops under the project.

The project has also spearheaded the enactment of the Plant and Fertiliser Act, Act 803, 2010, which among other things, allows for certification of nursaries and vegetative planting materials for the country.

“We certified eight planting material producers in 2011. This is to ensure that we have quality planting materials on the market,” Mr Agboka stated.

The project director, however, agrees that beyond the direct intervention by the project, there was also the need for creating a pipeline of financial support, through public-private partnerships, to enable the farmers access finance to cultivate their produce.

He believes that Ghana had much more favourable conditions to do far better in pineapple and other horticultural produce than Costa Rica which currently leads in the sector.

History and Potential of Pineapples

Horticultural produce from Ghana has shown a lot of promise over the years. The country has been involved in the export of horticultural exports since the 1980s. Exports rose quickly from US$28 million in 2000 to US$75 million by 2006, with a lot of potential at hand, with mangoes, pineapples and chilies showing firmer promise.

Statistics indicate that there are about €1 billion worth of pineapple market; €3.5 billion for bananas and US$250 million, all in the European Union alone.

Ghana’s pineapple exports blossomed in the 1990s when pineapple exports formed an association and reached an agreement with a vessel to lift fresh produce from Ghana, after visiting Cameroon and Cote d’Ivoire.

The twice a week lifting accelerated exports of fresh pineapples and other horticultural produce. Pineapple exports, thus rose from a few tonnes a week to 71,000 tonnes in 2004. The exports started slumping very fast when Costa Rica introduced the much sweeter MD2 pineapple which caught on well in the EU market.

This caused the market for Ghana’s variety, the smooth cayenne, to plummet to the current low levels of 35,000 tonnes in 2012.

Accra, Africa, Bank of Ghana, BoG, Business, China, Dangote Group, Eastern Cape, FDI, Foreign Direct Investment, Ghana, Government, IMF, Invesments, Kenya, Nigeria, Nigerian Stock Exchange, Passenger Rail Agency of South Africa, Pravin Gordhan, Real estate, Real estate investment trust, Rwanda, Sierra Leone, South Africa, Uncategorized, Volta River Authority

Africa Focused News


by Dario Galluccio

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Ghana: Nigeria’s gas supply insufficient for energy push

Ghana has reaffirmed plans to develop its gas resources, which will aid a steam-driven thermal power generation push, as gas supply from Nigeria proves insufficient.

The West African Transnational Gas Pipeline (WAGP), established in 1982 to supply gas from Nigeria to neighbouring countries, was billed to provide 70 million cubic feet daily to Ghana, but currently delivers 50 million cubic feet — well below the agreement. In addition, the country’s demand for gas, which will drive an increase in energy output, has risen well above the maximum supply the regional pipeline can potentially offer, hence the need to develop its own resources.

The West African Gas Pipeline as designed today can only give us 170 million cubic feet. We need extra investment to be able to move from 170 to 240 in order to realise the full potential of that pipeline,” said Kirk Koffi, a deputy chief executive of the Volta River Authority (VRA), Ghana.

According to Koffi, the future of Ghana’s energy was dependent on its ability to meet the local gas consumption, noting that the country could no longer rely on irregular supply from its West African neighbour.

Nigeria: Stock Exchange records $213.5m increase in market cap

The Nigerian Stock Exchange (NSE) has recorded a N34 billion ($213.5 million) rise in its market capitalization, following positive returns on several blue chip stocks.

Tuesday’s trading, 22th October, at the bourse revealed a 0.29 percent appreciation from N11.905 trillion ($74.76 billion) at the start of business, to close at N11.939 trillion ($74.97 billion). An outcome that strengthens the Exchange’s target for a $1 trillion market cap by 2016. According to analysts, the stock appreciation is a result of its positive year-end earnings.

Companies that topped the gainers list include Forte Oil, which led the chart with a N6.58 ($0.04) gain to close at N70.88 ($0.45). Other gainers were Guinness Nigeria, with N6.06 ($0.038) to close at N246.02 ($1.54), and Nigerian Breweries, up to N176 ($1.1) after a N4 ($0.025) appreciation. Indigenous oil firm, Conoil, also managed a N1.92 ($0.012) gain to end the day N40.48 ($0.25).

Ghana: BoG disseminates 2012 Foreign Capital flow survey

Ghana continues to attract a significant share of total Foreign Direct Investment (FDI) flows to Sub-Saharan Africa (SSA), a survey conducted by the Bank of Ghana (BOG) has shown.

The BOG’s 2012 Foreign Private Capital flows survey which was launched in Accra on Wednesday by the first Deputy Governor, Mr Millison Narh, indicated that in 2012, Ghana was ranked as the third highest recipient of FDI flows in SSA during 2011 by the World Investment Report on account of the newly developed Jubilee Oil field. However, FDI inflows to Africa in general, declined for the third successive year, though at a much slower pace to 42.7 billion US dollars in 2011 from 43.1 billion US dollars; but excluding North Africa FDI inflows to Sub-Sahara African increased to 37 billion dollars in 2011 from 29 billion dollars in 2010.

The survey sample was selected among entities in all the regions except the two upper regions with the objective of capturing Ghanaian enterprises with foreign direct investment and borrowing. At the launching of the survey, the findings, together with data obtained from monetary and financial sources for private cross border liabilities, showed that the economy recorded total external liabilities of 27.9 billion dollars in 2011, from 24 billion dollars in 2010. “This reflected an accumulated inflow liability position of cross border capital of 3.9 billion dollars in a year”.

Nigeria: Tiger Brands pushes for 70% stake in Dangote Flour Mills

Tiger Brands Limited, a leading South African foods company, seeks to increase its stake in Dangote Flour Mills (DFM) to 70 percent.

At a recent Nigerian Stock Exchange filing, Tiger Brands, which currently holds 63.35 percent in the company, indicated interest in buying an additional 332.5 million ordinary shares of 50 kobo each at N9.50 per share from minority shareholders to bring its stake to 70 percent. According to a report, Dangote Group will retain a 10 percent, Tiger Brands 70 percent, while other investors will have 20 percent.

Following the earlier acquisition of the 63.3 percent, the CEO of Tiger Brands, Mr. Peter Matlare, said he was “pleased with the successful conclusion” of the transaction, saying it would present growth opportunities for both organisations. He said the company would “go up to a maximum of 70 percent in total, leaving the balance in Nigerian hands.”

Rwanda: Chinese investors interested by Rwandan opportunities

A delegation of 20 Chinese investors from Zhenjiang Province has arrive in the country to assess the investment opportunities. While meeting officials from Rwanda Development Board (RDB), the group expressed interest in establishing light manufacturing plants for instance for the production of textiles. RDB CEO Valentine Rugwabiza noted that Rwanda is ready to assist them in their quest to invest in the country.

“Rwanda-Chinese relations are built on 46 years of continually improving commercial and diplomatic relations, and Rwanda offers one of the best business environments in the world which means that our government will provide you with all the required assistance as you plan to invest in Rwanda,” Rugwabiza said.

The head of the Chinese delegation, Justin Yifu Lin, a former chief economist and Senior Vice president at the World Bank and now a professor of Economics at University of Peking, China, said that investors want to tap into Rwanda’s labor force by creating factories that provide employment to thousands.

Helen Hai, an expert on China-Africa Investments, said that they were impressed by Rwanda’s efforts to facilitate investment in terms of business-friendly procedures and steady infrastructural development.

Rwanda has witnessed increased Chinese investment over the last five years, with over $219 million invested in sectors like construction, tourism and agriculture.

Ghana: 98% of working population economically active

According to the latest Ghana Living Standards Survey Labour Force report, only about 1.9 percent of the economically active population is unemployed.

The report says 75.7 percent of persons who are 15 years and above are economically active. The unemployment rate among 15 years and above is however higher in urban areas- about 3.6 percent than rural areas. The jobless rate is also higher among females-3.8 percent than males. It is higher among the age group 15-24 compared with 1.7 percent for the aged group 25-44 years.

A total of 21,554 persons were captured of which 10,486 were men and 11,068 were women.

With regard to the sector employment, 52.0 percent of persons who are 15 years and older are engaged in agriculture, forestry and fishing. It is followed by wholesale and retail trade with 15.9 percent. 46.8 percent of the employed persons are self employed without employees.

Kenya: Real Estate investment trusts rules fail to pique market interest

Four months after the Real Estate Investment Trusts regulations were gazetted, the Capital Markets Authority is yet to register any Reit scheme or Reit managers. The regulations were created to introduce a new tool in the capital markets to spur investments, while allowing more people to own a share of the real estate market through the Nairobi Securities Exchange.

CMA is however yet to receive a single application from promoters seeking establishment of Reit schemes, a sign that the hype in the build up to the regulations may have been artificial as they are yet to pique investors’ interest. It has also not registered any Reit manager, signalling it will take longer before the first Reit is listed at the NSE. The CMA has however issued checklists and application forms for registration of Reit schemes, managers and trustees to guide the process.

Reits are meant to enable the public to buy unit trusts of listed schemes at the NSE and earn dividends from their investments. They have been structured into D-Reits (for developers) and I-Reits (for income).

The regulator said it is working closely with market participants to ensure clarity on regulatory requirements and address preliminary queries in order to encourage uptake of the new product.

South Africa: More funding for infrastructure projects

South Africa is to channel additional public funding into a number of priority infrastructure projects in the transport, communications and energy sectors, Finance Minister Pravin Gordhan told Parliament. Presenting his medium term budget policy statement in Cape Town, Gordhan said that billions of rands would be spent on the country’s digital broadcast migration project, rolling out new train coaches, and refurbishing research facilities for nuclear research.

As expected, Gordhan allocated additional funding to support the Passenger Rail Agency of South Africa’s procurement of new rolling stock. The agency plans to purchase more than 300 six-car trains over the next decade, with initial deliveries expected in 2015/16. More investment was expected in other areas of transport, Gordhan said.

“Projects that will get under way soon include a new dam in the Eastern Cape, rehabilitation of the main roadway between the Eastern Cape and KwaZulu-Natal, and a new coal-fired power station” he said.

Sierra Leone: IMF approves $96m credit facility

The International Monetary Fund (IMF) has approved a $96 million 3-year enhanced credit facility for Sierra Leone, as it plans to support economic development and poverty reduction in the country. When disbursed, the fund will assist in facilitating the country’s growth and investment plans.

Sierra Leone, which was torn apart by a civil war that lasted 11 years, is slowly recovering. Investor and consumer confidence have continued to rise, adding impetus to its economic recovery. Commending the West African nation’s progress, the IMF noted that the country, which has a population of over six million people, still faced several social and economic challenges, urging its government to step up efforts in strengthening public financial management.

Mr Min Zhu, IMF’s Deputy Managing Director, said the commission would seek to improve these conditions by enhancing revenue mobilisation. According to him, the country has achieved strong macro-economic gains in recent years, and the “facility would be critical to propel its fiscal strategy.” He listed remarkable components in Sierra Leone’s economic strategy, including tax administration improvements and the adoption of a comprehensive fiscal regime for the natural resources sector.

Zhu concluded by revealing that with the approval, the country could get around $13.7 million as first instalment.

Accra, Africa, Business, Energy industry, Gas station, Ghana, Government, Invesments, Lubricant, Shell, Uncategorized, Vitol, Vivo Energy

Turkey Builds Industrial Parks In Ghana

Reflex Eco Group – Ghana News

by Samuel Boadi (local journalist)

This Blog is sponsored by

Turkey is to construct two industrial parks at Accra and Kumasi respectively beginning next year at a cost of over $300 million.

Outgoing Charge d’Affairs of Turkey Embassy in Accra, Simay Erinoglo, speaking to journalists in Accra on Tuesday, said the two projects, which are designed to attract many Turkish investors into Ghana would be funded by the Turkish Exim Bank.

The Ankara Chamber of Industry and the Ghana National Chamber of Commerce & Industry signed an agreement to that effect recently.

Ms Erinoglo said Turkish exports to Ghana last year recorded $223.5 million while it imported $303.5 million worth of goods from Ghana.

For the first six months of 2013, Turkey exported $103.6 million worth of goods to Ghana while it imported $128.9 million worth of goods from Ghana.

The outgoing diplomat also indicated that Turkey was currently supporting a yam growing project in the country since the crop is a rich source of starch. “We are planning to start an advertisement on yam imports to Turkey soon.”

She added that other crops, including cassava and cocoa would also be grown with the support of her Government in selected locations in the country.

Ms Erinoglo added that Turkish investors were eyeing a number of projects in the various sectors of Ghana’s economy, including construction.

Also, it intends to help with the construction of an international airport.

In the health sector, Turkey wants to assist with the construction of eight pre-fabricated hospitals at a cost of $118 million.

The Turkish Development Agency (TIKA) is working on a lot of projects in Ghana, she indicated.

Turkish investors are hesitant to come over to Ghana to invest because of the monstrous land acquisition challenges, she stated.

Turkey, a friend of Ghana since the 1960s, broke up the relationship in 1980 and returned in 2010.

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Housing Supply in Ghana

A recent study by UN-Habitat reports that Ghana’s housing need is expected to hit 5.7 million units by 2020. The analysis highlights that housing in the country has never been a significant component of the country’s national economic planning, but has been seen rather as part of its welfare sector. As much as 90 percent of Ghana’s housing stock has been produced through self-build. According to the Ghana Real Estate Developers Association, the slow pace of residential property construction is now changing. Since 2005, completions and new building plan approvals have increased. Permit approvals for registered real estate developers and parastatal real estate developers have more than doubled. In 2012, activity declined somewhat, however, with cement production increasing by only 5.82 percent, compared with an increase of 11.22 percent in 2010. This was mainly due to a temporary shutdown of the West African Cement production plant following a lightening storm. Cement prices increased by 85% from GH¢14 (US$7.38) to GH¢25. This affected the entire construction industry – although by the middle of the year, the crisis seems to have abated.


There is some delivery of housing by the government. Players include the Social Security and National Insurance Trust and the State Housing Company. Housing developments driven by the state, which primarily targets the public service, have, however, been unable to significantly dent the demand. Over the 10-year period 1991 – 2000, state housing institutions produced less than 40 000 mortgageable units. In 2012, a high profile development being driven by Korean construction firm STX, and which promised the delivery of 200 000 units, came to a halt due to difficulties in contracting arrangements. Concerns among the Ghanaian construction sector that local players had been sidelined in the project were also an issue. A second initiative by a local developer for the delivery of 10 000 affordable housing units has also been reported as having problems. Since the collapse of the STX programme, there have been reports of some smaller developments for public sector housing, but nothing significant. South African firm, Bigen Africa, has offered technical capacity and support in addressing Ghana’s housing backlog. Development in the upper income market remains vibrant, as developers scale-up on the need for high end expatriate accommodation. Companies such as Taysec and Clifton Homes offer housing in the US$100 000 to US$600 000 and above range – this covers two bedroom apartments to four to five bedroom homes.


The Tema Ashaiman Municipal Slum Upgrading Fund provides useful lessons for slum upgrading, and integrated development for the poor. Funded in part by UN-Habitat, the project is driven by the Ministry of Local Government in Ghana, and two municipalities. UN-Habitat provided a grant of US$400 000 as a capital enhancement, and a further $100 000 for administration and development. A further $400 000 capital enhancement grant is expected. Working with People’s Dialogue on Human Settlements, the first project will develop houses and shops, and ultimately an entire integrated development for the slum dwellers involved. By marking land both for residential and commercial purposes, the project addresses to some extent the competing land uses that often undermine the poor’s access to well located land.


Homeless International has been working in Ghana since 2003. It has partnered with the Peoples’ Dialogue on Human Settlements to support Ghana’s urban poor to advocate for their rights to adequate housing, safe settlements, secure tenure and affordable infrastructure.


Property Market


Demand for housing has accompanied generally good economic performance. Incomes of middle-class Ghanaians have risen gradually together with lively property markets. A significant rise in the number of Ghanaians living abroad who want to own houses back home, foreign buyers of residential property, and foreign investment by multinational companies into the country, have all contributed to growth in the market.


With the growth of the oil and gas industry in Ghana, private sector development of upmarket homes is rampant and almost all selling off-plan; these prices range from upwards of US$300 000 to more than US$1 million. Property rentals in the middle to upper sector range between US$2 500 and US$8 000 a month.


Ghana’s construction industry continues grow steadily. In the past decade, the industry’s annual growth in 2008 and 2009 was 8.6 percent and 9.3 percent, respectively. A more recent challenge has been the apparent market saturation with cheap but low-quality imported building materials, which has had a direct, negative impact on the local manufacturing industries.

Accra, Africa, Agriculture, Business, Ghana, Government, Invesments, Land grabbing, Land tenure, Latin America, Middle East, Saudi Arabia, Uncategorized

THE SCRAMBLE FOR AFRICA LANDS: Cash rich but land poor; whose interest is served?

Reflex Eco Group – Africa news

by Paul Frimpong (Ghanaian Economist)

This Blog is sponsored by

Land grabbing is not a new phenomenon. For centuries, communities have been intimidated to abandon – or have been forcibly removed from – their land. However we are now witnessing a new aggressive land grab, driven by high food prices and growing global consumption, with multinational corporations, often in partnership with governments, seizing the land.


High food prices, combined with growing demand for land and for other natural resources and a financial crisis that forced investors to look for new speculative investments, have triggered a new global land grab. Only now, it is multinational corporations, often in partnership with governments, which are taking the land, frequently depriving local communities of critical resources. These companies often secure long leases to exploit the land for profits, extracting natural mineral resources, or growing crops for food, fuel or carbon credits.

Over the last couple of years, large-scale acquisitions of farmland in Africa, Latin America and Asia have made headlines across the world. Africa is in the period of witnessing one of the biggest transfers of lands in its history. Foreign investors are leasing hundreds of thousands of hectares of farm lands to giant business enterprises of agricultural nature–billions of dollars are been invested, so are a number of questions being asked.

Is this really a new form of neo-colonialism? Is there really the incidence of large land grabs? Who actually plan these mega deals? And who actually benefits from them?

Let’s remember that, land is very essential to the survival of people; without lands many will starve and die. The land acquisition in Africa is not by only investors from within Africa but also from foreign government, individuals and companies.

Land grab in Africa basically emanates from three sources; first of all by governments, especially those in the Middle East, Asia looking at their food security initiatives. Land and resource rich but cash poor governments are seeking foreign direct investment in land and agriculture. While many of the governments involved are seeking to expand their domestic production of food crops and crops for fuel, agribusiness is seeking to expand its operations and boost profits, growing more, more cheaply; growing new crops for new markets, particularly for agro fuels – as well as gaining access to new markets in rapidly developing economies. Investors and speculators are looking for good investment returns.


Secondly, institutional investors who have diversified away from the equities market to longer term investment such as in land perhaps as inflation hedge. Private companies are both keen to gain access to fertile land at a low cost. Countries such as China, India and Egypt want to ensure they have access to rice and grain. Other countries such as Saudi Arabia have recognized that the changing climate and limited water supplies mean that some crops can no longer be grown at home. Instead they are looking to outsource production to areas where fertile land and water are in greater supply. A lot of these multinational and private equity investors who are doing the land deals are using the land to farm for their own food security.

Lastly, we are looking at the previously small scale farmers within Africa also scaling up as a result of the attractiveness of the agricultural sector.
This incidence of land grab has led to a lot of uproar on the continent. I think that what the up roar is arising from is the fact that people want to see a lot more openness and a lot more benefits and even perhaps the method of engagement with the people interested in the land acquisition in Africa perhaps more participatory enough. For instance, no information is given to local owners while taking up their lands depriving them of the opportunity to feed themselves whiles at the same time, exposing them to negative environmental implications of the activities on such lands.

Government policies are very critical in this regard; to what extent is government policies directed towards attracting systematically the institutional investors in such way that there are long term sustainable benefits to both investment companies and also to the host countries? This is where a number of the engagement methodologies need to change to a more transparent ones. This again will require that government policies are geared towards addressing the social implications, environmental implications and also the engagement with the local partners.

Land grabbing leads to some level of local or domestic discomfort. For instance; the lack of adequate and secure access to land and natural resources by the rural and urban poor is a prime cause of hunger and poverty across the continent. In addition, inequalities in land contribute directly to inequalities in health and quality of life. These inequalities cannot be reduced without addressing the overconsumption that lies behind this growing demand for land.

The traditional users lose their land and access to water and other resources—and so lose their livelihood. Sometimes entire villages are displaced. Land grabbing again undermines food sovereignty. The farming taking place on these lands is not for local consumption but for ex-port.
Practices of industrial agriculture are geared to quick profits. They endanger biodiversity and water resources and damage the quality of the topsoil.


In addressing the issues of scramble for Africa lands, governments and stakeholders on the continent must ensure they respect constitutional provisions on land tenure. Thus move quickly to design, move a bill, enact and enforce a law to protect citizens who own land under customary tenure system

Measures must be put in place to stop the grabbing of land for agro-fuels, carbon credit trading and other monoculture systems and instead support policies and laws that promote agro-ecological farming systems and practices. Target public investment towards peasant agriculture, family farming, artisanal fishing and indigenous food procurement systems that are based on ecological methods


Paul Frimpong CEPA

Chartered Economist (ACCE-Global) who writes on the macroeconomy and global affairs. He is also an African Affairs Analyst

Tel: +233 -241 229 548


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