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Ghana Offers Incentives to Poultry Processing Investors

14 August 2014

GHANA - An incentive package aimed at doubling investments in Ghana's poultry sector is being offered to potential investors in the poultry processing and packaging industries.

According to GhanaWeb, currently before government for consideration is an incentive package that include tax rebates and reliefs as well as soft loans and grants that would be rolled out in the coming days.

The initiative is part of government’s policies aimed at ensuring the availability of processed poultry food in the country so as to reduce its imports, a Deputy Minister of Food and Agriculture, Dr Yakubu Alhassan, said in an interview.

Already, the Internal Revenue Act, 2000 (Act 592), grants income tax exemptions on livestock farming over a period of five years, starting from the year the business commenced.

Beyond that, however, Dr Alhassan said the ministry was looking at introducing attractive policies that would complement the existing ones.

The agriculture sector, of which the poultry business is a subsector, is one of the few in the country that suffers from sufficient investments due, mainly, to the perceived risks associated with its operations.

The contribution of the sector to GDP, for instance, was 1.1 per cent in the first quarter in 2013 but rose to 14.9 per cent in the same period this year, data from the Ghana Statistical Service (GSS) showed.

The sector’s growth rate translated to some GH¢ 3.6 billion at basic prices.

Growth in the livestock sub-sector, of which poultry is an integral part, was at 4.5 per cent, after growing (at 3.2 per cent) in the same period last year.

However encouraging this trend is, the Deputy Minister of Agriculture in charge of crops, said it was very surprising, given that investments in agriculture were "visible" compared to other areas.

"Why is it that somebody can pump hundreds of millions of dollars into an oil block, which is in the open sea, and yet believe that it pays to attract that money, yet agricultural investment, which is visible, can't attract such funds? he said.

"Somebody must, therefore, be able to tell the story for the private investor to be keen on putting his money into agriculture as is the case with the other sectors, and that's exactly what we are doing of late," he said.

"For the poultry sector, we know that one of the significant challenges is that we (the country) don't have the required infrastructure for the post-harvest management of the fresh meat such as to get the feathers off, cut the meat into pieces and do the packaging for consumption. That is why we are saying that the private sector should invest in the provision of infrastructure that can help make the local birds attractive to people instead of always depending on imports," he explained.

Ghana’s consumption of poultry has been increasing over the years, rising from about 167,00 metric tonnes (MT) in 2012 to 175,000 MT last year.

Per capita consumption of poultry, which measures individual intake of the bird in the country, also grew by 33 per cent between the last two years.

It rose from 6.6 kilograms (KG) in 2012 to (KG) 6.8 in 2013, following increased demand for the bird and its associated foods nationwide, data from the MOFA showed.

But while this happened, local production of poultry has lagged behind mainly due to low investments from the private sector and government as a whole.

As a result, out of the national demand of 175,000MT as reported in 2013, the domestic market sector provided about 40 per cent, leaving the rest to imports, which are mostly from the United States of America.

These imports cost the country some US$169.2 million in 2013, an amount the deputy minister said was too costly for the country hence the decision to incentivise investments into the poultry processing business.

"If we do that and the local bird is readily available, it will automatically reduce the imports and also create jobs for our people," he said.

"I know the poultry producers are in league with some private investors so that they can cut their production base to fit the processing capacity that's available so that as they grow, some processing equipment can be imported to meet that capacity," he added.

He mentioned the Brong Ahafo Region as one area that was currently suffering from lack of processing equipment despite being a strong base in the poultry production business.

TheMeatSite News Desk

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