Last month, the International Development Association (IDA) of the World Bank has extended $200 million financing for the Tree Crop Diversification Project (TCDP) to diversify and grow the economy through modernising agriculture to accelerate productivity, resilience and industrialisation.
This gesture can be seen as an endorsement of the World Bank of the establishment of the Tree Crop Development Authority (TCDA) and in recognition that the tree crops sector has the potential to turn the country’s economy round through agriculture if properly resourced with enough funding.
The project will strengthen farmer-based organisations as well as the institutional capacity of the Ghana Cocoa Board (COCOBOD) and TCDA and improve sector governance for competitive and sustainable development of tree crops.
It will improve value chain governance through traceability in tree crops and other investments, technical assistance and other programmatic support to reform the sector.
The project includes a child labour sub-component to identify and mitigate child labour risks in project communities.
Currently, there is an overreliance on cocoa, as the main foreign exchange earner, fetching averagely over $1 million annually for the country.
Tree crops can play an enormous role in the country’s economic transformation hinging on agriculture and this belief gave birth to the agricultural flagship policy, Planting for Food and Jobs (PFJ), of which the Planting for Export and Rural Development (PERD) focuses on tree crops.
That is why the TCDA, an offshoot of the PERD, which was championed by the former Minister of Food and Agriculture, Dr Owusu Afriyie Akoto, came as a saviour of the country’s economy, with the projection that within the next six to eight years, the country can begin to reap its labour from the investment in six tree crops under the TCDP.
The six tree crops, under the TCDP, namely Oil Palm, Rubber, Shea, Coconut, Cashew and Mango are expected to generate a minimum of $6 to $12 billion annually.
This will be aside from the $1 billion from our traditional cocoa.
The TCDA is a legal institution established by an act of Parliament, Tree Crops Development Authority Act, 2019 ( Act 1010) is tasked to regulate and develop in a sustainable environment; the production, processing, pricing and marketing of the six crops.
The authority was, therefore, set up to lead the agenda for the diversification of Ghana’s agriculture by putting in place policies and programmes to guide research, production, processing, pricing and marketing of the six stated tree crops with enormous agricultural, economic, export and forex earning potential for Ghana.
TCDA on its feet
The injection of the $200 million towards the TCDP is indeed, good news because the TCDA, which was projected to be on its feet by the close of this year, with an annual $5 million seed fund for three years to raise $15 million is still struggling with only $3 million.
Even though the utilisation of the $200 million factors cocoa into the equation, it is clear that the much-needed fund that the TCDA needed for stability to hit the ground running has been solved, thanks to this single gesture by the World Bank.
The injection of the $200 million into the TCDP would not only contribute substantially to Ghana’s economy and society than it currently does, it would also engender job creation, export revenue generation, and poverty reduction of the country’s poorest people.
According to the IDA of the World Bank, this financing will directly benefit 12,800 cocoa farmers and 39,975 cashew, coconut and rubber farmers and their households, while an additional 20,000 jobs are expected to be created in downstream value addition by mobilising private capital, with nearly 40 per cent of on-farm beneficiaries expected to be women.
A press statement from the World Bank on the extension of the funding observed that challenges limiting the development of the tree crop sector included low and stagnant productivity, weak institutional capacity, poor sector governance, and poor climate resilience due to weak adoption of climate smart agriculture technologies and practices.
It added that there was little value addition and weak coordination between actors of the tree crops value chains and also, lack of connectivity between farmers and improved inputs and services providers, and vulnerability to pests and diseases.
“In addition, deforestation, child labour and the persistence of gender inequities in these agricultural subsectors are of concern,” the statement observed.
The statement gave an assurance that the TCDP would support demand-driven research and enhance on-farm productivity and resilience to improve the productivity, profitability, and climate resilience in the tree crop value chains.
It said the project would support post-harvest management, value addition, and market access as well as support the deployment of public resources to crowd-in private sector investments in the sector where possible, accelerating economic transformation and developing critical agricultural value chains.
The statement quoting the World Bank Country Director for Ghana, Liberia, and Sierra Leone, Pierre Laporte, said, “the World Bank is pleased to support Ghana’s medium-term national development strategy through the Ghana Tree Crop Diversification Project and directly contribute to the Government of Ghana’s priorities for economic and social development in the Coordinated Programme of Economic and Social Development Policies, for inclusive, resilient and sustainable economy.
“The project will support private investments in Small and Medium Enterprises (SMEs) in cocoa, cashew and coconut value chains and in cashew and coconut processing units,” Mr Laporte said in the statement.
With this massive injection of funding, the TCDA should not be seen as standing on its feet, but running.
After all, the intention of the government was that with the $15 million, the TCDA was expected to stand on its feet and have the capacity to borrow money based on its balance sheets.
The clock has already started ticking and all eyes are on TCDA to salvage the country from the clutches of the international financial institutions.
With the political will and the needed support, the TCDA is set to be the golden pot for the country to address its developmental challenges.