Ghana’s agriculture sector, once the backbone of the country’s economy, is facing tough times, growing by just 3.2% in the third quarter of 2024, compared to the same time last year, a big drop from the 5.4% growth seen in the second quarter.
Quarter-on-quarter, growth slowed to a mere 0.7%, falling from 1.2% in Q2. This performance shows how the sector is struggling, especially when compared to Industry, which grew by 10.4%, and Services, which posted a 6.4% growth.
Agriculture’s contribution to GDP growth also dropped to 0.6 percentage points (p.p.) in Q3, down from 1.1 p.p. in Q2. Meanwhile, Industry and Services made stronger contributions of 3.4 p.p. and 2.8 p.p., respectively.
Cocoa, Ghana’s most famous crop, is facing serious problems. In Q3, it shrank by 26.0% compared to last year, barely improving from the 26.2% decline in Q2.
Even quarter-on-quarter, cocoa’s performance worsened, dropping by 5.8% in Q3 after a 2.9% drop in Q2. On the ground, cocoa farms are struggling with poor rainfall, the swollen shoot disease, and illegal mining (galamsey), which is destroying farmlands.
To make matters worse, reports indicate that about 160,000 tons of cocoa were smuggled into neighboring countries in the 2023/24 crop season as farmers sought higher prices elsewhere. This Ghana Cocoa Board (COCOBOD) admitted it has hurt Ghana’s cocoa exports and weakened their efforts to stabilize the sector.
The fishing sub-sector has seen one of the biggest drops. In Q3, it shrank by 21.7% compared to last year, a sharp fall from the 4.7% growth in Q2.
Quarter-on-quarter, fishing fell by 6.5% in Q3 after growing by just 1.1% in Q2. Overfishing, fewer fish in the sea, and weak enforcement of fishing laws are leaving fishing communities with little to earn.
Forestry and logging also continued to struggle. It shrank by 4.4% in Q3 compared to last year, though this was an improvement from the 5.2% drop in Q2. Quarter-on-quarter, forestry fell by 1.1% in Q3, following a similar drop of 1.3% in Q2. These declines show how unsustainable practices like illegal logging are keeping the sub-sector in trouble.
In a struggling sector, livestock is one bright spot. It grew by 4.8% year-on-year in Q3, up slightly from 4.7% in Q2. While this growth is small, it shows some stability in a sector otherwise filled with challenges.
At 24.5% of GDP in Q3, agriculture is now the smallest contributor to Ghana’s economy, behind Services (42.9%) and Industry (32.6%).
Farmers are battling rising prices for fertilizers and pesticides, leaving many unable to afford what they need to grow their crops. Many farms have been abandoned because of illegal mining, especially in cocoa-growing regions. On top of this, unpredictable rains and long dry spells have disrupted planting and harvesting.
Economists warn that agriculture’s struggles could deepen the gap between rural and urban areas and slow down Ghana’s overall development. With agriculture contributing just 0.6 p.p. to GDP growth in Q3, its role in driving the economy is steadily shrinking.
