Grain storage infrastructure

Grain storage infrastructure

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Grain storage infrastructure

Country
Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Beverage
Sub Sector
Most major industry classification systems use sources of revenue as their basis for classifying companies into specific sectors, subsectors and industries. In order to group like companies based on their sustainability-related risks and opportunities, SASB created the Sustainable Industry Classification System® (SICS®) and the classification of sectors, subsectors and industries in the SDG Investor Platform is based on SICS.
Food and Agriculture
Indicative Return
Describes the rate of growth an investment is expected to generate within the IOA. The indicative return is identified for the IOA by establishing its Internal Rate of Return (IRR), Return of Investment (ROI) or Gross Profit Margin (GPM).
20% - 25% (in IRR)
Investment Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.
Short Term (0–5 years)
Market Size
Describes the value of potential addressable market of the IOA. The market size is identified for the IOA by establishing the value in USD, identifying the Compound Annual Growth Rate (CAGR) or providing a numeric unit critical to the IOA.
Maize worth USD 7 million and rice worth USD 1,429 million were imported in 2019.
Direct Impact
Describes the primary SDG(s) the IOA addresses.
Zero Hunger (SDG 2)
Indirect Impact
Describes the secondary SDG(s) the IOA addresses.
Good health and well-being (SDG 3) Responsible Consumption and Production (SDG 12)

Business Model Description

Provide storage facilities for grain value chains like maize, rice, cassava, yams through silos, grain conveyors, grain dryers, vacuum hermetic fumigation and gas hermetic storage. Also offer complementary logistic services to aggregate production.

Expected Impact

Address post-harvest losses and contribute to food security of agricultural households.

How is this information gathered?

Investment opportunities with potential to contribute to sustainable development are based on country-level SDG Investor Maps.

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Country & Regions

Explore the country and target locations of the investment opportunity.
Country
Region
  • Ghana: Ahafo Region
  • Ghana: Eastern
  • Ghana: Ashanti
  • Ghana: Central
  • Ghana: Northern
Learn more

Sector Classification

Situate the investment opportunity within sustainability focused sector, subsector and industry classifications.
Sector

Food and Beverage

Development need
Agriculture accounted for 17% of gross domestic product (GDP) and 29% of total employment in 2019 in Ghana, and it constitutes most informal sector employment.(I) Total sales amounted to USD 13.2 billion in 2019, with estimated average growth of 5.6% between 2020 and 2025. Consumption was USD 10.4 billion in the same year and is estimated to grow at 4.9% between 2020 and 2025.(II)

Policy priority
Ghana's agricultural policy focuses on raising the productivity and value added in agriculture, via government initiatives such as Planting for Food and Jobs, and One Village, One Dam.(III)

Gender inequalities and marginalization issues
Women constitute the majority of agricultural employees and are most active in agro-processing and food distribution, and face numerous challenges. These challenges include poor access to land (female farmers own two times less land than their male counterparts) and credit (for every 100 men obtaining credit only 47 women do).(VI)

Key bottlenecks
Key sector challenges include poor farmer education and management skills, business atomization, poor supply chains, limited access to capital and inputs, lack of storage and poor handling practices, low access to information and information and communication technology (ICT) services, and an ageing farming population.

Industry

Agricultural Products

Pipeline Opportunity

Discover the investment opportunity and its corresponding business model.
Investment Opportunity Area

Grain storage infrastructure

Business Model

Provide storage facilities for grain value chains like maize, rice, cassava, yams through silos, grain conveyors, grain dryers, vacuum hermetic fumigation and gas hermetic storage. Also offer complementary logistic services to aggregate production.

Business Case

Learn about the investment opportunity’s business metrics and market risks.

Market Size and Environment

Critical IOA Unit
Describes a complementary market sizing measure exemplifying the opportunities with the IOA.

Maize worth USD 7 million and rice worth USD 1,429 million were imported in 2019.

In 2019, maize worth USD 7 million and rice worth USD 1,429 million were imported to Ghana to satisfy internal demand.(20a)

In 2018, Ghana's major crops were: cassava (20,846.0 metric tons), yams ( 7,788.9 metric tons), plantain (4,688.3 metric tons) and maize (2,306.4 metric tons).(19)

In 2018, financial value of grain losses in Ghana amounted to USD 92.3 million for maize, USD 46 million for rice, USD 13 million for sorghum and USD 8.6 million for millet.(32)

Indicative Return

IRR
Describes an expected annual rate of growth of the IOA investment.

20% - 25%

The benchmark internal rate of return is estimated to be up to 50%, based on a similar project using metal silos for maize in a similar country context.(33)

The benchmark return on equity ranges from 19% to 23%. This estimated range is based on cost of equity data for the storage and packaging, and transportation and logistics subsector including a country risk premium.(34)

Investment Timeframe

Timeframe
Describes the time period in which the IOA will pay-back the invested resources. The estimate is based on asset expected lifetime as the IOA will start generating accumulated positive cash-flows.

Short Term (0–5 years)

Silos can take from 2 months to 2 years to be functional and start generating returns. The timeframe depends on the size of the complex, materials, logistics and technology.(35),(36),(37),(38)

Market Risks & Scale Obstacles

Business - Supply Chain Constraints

Conventional storage systems were predominantly used in the past (constructed using locally available resources such as mud, wood, wheat, paddy straw, bamboo or bricks).(7)

Business - Supply Chain Constraints

Storage practices varied widely depending on the ethnic group, cultural traditions, production scale and socio-economic conditions of farmers.(8)

Capital - CapEx Intensive

The initial capital investment costs and complexity of the technology can make development difficult.(5) Another obstacle is the limited local availability of construction materials for advanced projects.(6)

Impact Case

Read about impact metrics and social and environmental risks of the investment opportunity.

Sustainable Development Need

Annually, Ghana loses an estimated 18% of maize, 12.5% of sorghum, 12% of rice and 11% of millet due to several factors.(11)

Food loss related to incorrect post-harvest handling and storage with distribution is estimated at 11% for maize, 7% for rice, 16% for cassava, 18% for cowpea and 25% for yams.(39)

High levels of stunting and wasting (22% and 8% respectively) are observed in Ghana's Central region.(14) The average prevalence of stunting in Ghana is 19%, although levels rise to 33% in the Northern region.(13)

Gender & Marginalisation

Small-scale farmers often lack the opportunity to store grains and so are the most affected by their loss.

Expected Development Outcome

Improve food security due to reduced post-harvest losses, strengthen value chain for agricultural product distribution

Alleviate poverty levels due to higher supply of agricultural products, reduce food losses caused by incorrect post-harvest management, storage and logistics

Improve agricultural opportunities, generate cash inflows due exports that improve the trade balance

Gender & Marginalisation

Greater and more stable income opportunities especially for small-scale farmers

Primary SDGs addressed

Zero Hunger (SDG 2)
2 - Zero Hunger

2.1.1 Prevalence of undernourishment

2.1.2 Prevalence of moderate or severe food insecurity in the population, based on the Food Insecurity Experience Scale (FIES)

2.2.1 Prevalence of stunting (height for age <-2 standard deviation from the median of the World Health Organization (WHO) Child Growth Standards) among children under 5 years of age

2.2.2 Prevalence of malnutrition (weight for height >+2 or <-2 standard deviation from the median of the WHO Child Growth Standards) among children under 5 years of age, by type (wasting and overweight)

2.3.1 Volume of production per labour unit by classes of farming/pastoral/forestry enterprise size

Secondary SDGs addressed

Good health and well-being (SDG 3)
3 - Good Health and Well-Being
Responsible Consumption and Production (SDG 12)
12 - Responsible Consumption and Production

Directly impacted stakeholders

People

Households obtaining reliable grain supply at a stable price

Gender inequality and/or marginalization

Small-scale farmers

Planet

Reduced wastage of natural resources

Corporates

Small and medium enterprises (SMEs), markets, processing facilities, wholesalers, retailers who benefit from improved access to food supplies

Indirectly impacted stakeholders

Public sector

Enhanced opportunities to plan and manage grain resources nationwide

Outcome Risks

Possible soil sealing and degradation e.g. by removing the topsoil upper layer to develop a strong foundation for the building, which affects soil-related ecosystem services. This may reduce soil water holding capacity (affecting flooding), pose a threat to soil biodiversity (sealing prevents recycling of dead organic material) and interfere with the carbon cycle (due to topsoil and vegetation removal).(3)

Health hazards if chemicals are applied (4)

Impact Classification

C—Contribute to Solutions

What

Investment in storage facilities and silos for grains may lessen post-harvest losses of staple food commodities, increase food security and improve household incomes.

Risk

Initial capital investment costs may be an obstacle for small and medium farmers. Large-scale projects may potentially result in environmental degradation or losses in grain quality/quantity.

Impact Thesis

Address post-harvest losses and contribute to food security of agricultural households.

Enabling Environment

Explore policy, regulatory and financial factors relevant for the investment opportunity.

Policy Environment

Ghana Shared Growth Development Agenda II (GSGDA II) 2014–2017: This policy highlights the need for higher agricultural productivity to ensure food and nutrition security. Increased production will facilitate public and private investments in post-harvest management operations.(20b)

Food and Agriculture Sector Development Policy (FASDEP II): This policy notes markets are characterized by the lack of suitable commodity-specific storage facilities. Although published in 2007, the document is still considered Ghana's main agricultural policy.(21)

Investing for Food and Jobs (IFJ) - An Agenda for Transforming Ghana’s Agriculture (2018-2021): This policy prioritizes poor storage and transportation systems as one of the major developmental issues. It states that 'incentives to the private sector to invest in post-harvest activities will be made'.(22)

National Nutrition Policy 2016: This policy emphasizes that Ghana's nutrition situation depends on food availability, access and utilization at household and national level. It acknowledges the challenges to food security that often occur across the food chain.(23)

Ghana National Climate Change Master Plan Action Programmes for Implementation 2015–2020: This policy plans for improved post-harvest management, by supporting the provision of processing and storage infrastructure.(24)

Financial Environment

Financial incentives: Under the Ghana Shared Growth Development Agenda II (GSGDA II) (2014–2017), the government will ensure 'an adequate flow of financial resources to agriculture and aquaculture' with particular attention to smallholder farmers.(44)

Fiscal incentives: Food produced in Ghana and sold in its raw state and equipment for agriculture and fishing are listed among goods and services exempted from Value Added Tax and the National Health Insurance Levy (VAT/NHI).(41) Agricultural and industrial plant, machinery and equipment imported for investment purposes are exempted from customs import duty.(42) Companies operating in the livestock, fish and cash crops sectors enjoy a tax concessionary rate of 1% on their chargeable income for the first 5 years from commencement.(43)

Regulatory Environment

Ghana Public Health Act 2012: This Act prohibits sale of poor quality food.(25) Standards Authority Act 1973: This Act gives the Ghana Standards Authority the right to check foods quality parameters (e.g. pesticide residues).(26)

Ghana Investment Promotion Centre Act 2013: This Act sets out regulations, which provide benefits and regulations for an enterprise registered by the Ghana Investment Promotion Centre (GIPC).(27)

Ghana Grain Council (GGC) Warehouse Certification Program: GGC offers an audit-based certification scheme, which uses the Warehousing and Fulfilment Process Benchmark and Best Practices Guide. It evaluates a facility’s potential and capacities to perform core warehousing functions.(40)

The Ministry of Food and Agriculture is the main regulatory body responsible for legislations within the agriculture sector.(47) The Ghana Standards Authority sets Food, Chemistry and Material Standards (FMS).(45)

The Environmental Protection Agency is responsible for preserving the natural environment and preventing its degradation.(46) The Food and Drugs Authority sets regulations and licensing frameworks for food handling practices.(48)

Marketplace Participants

Discover examples of public and private stakeholders active in this investment opportunity that were identified through secondary research and consultations.

Private Sector

Garin West Africa (GWA), Green Gold Farms Ghana Ltd, ABC Hansen Africa, Ponndorf Anlagenbau GmbH

Government

Ministry of Food and Agriculture, Food and Drugs Board, Environmental Protection Agency

Multilaterals

World Bank (WB), European Investment Bank (EIB), African Development Bank (AfDB)

Non-Profit

Conference of Heads of African and French Agricultural Research (CORAF), International Food Policy Research Institute (IFPRI), Food and Agriculture Organization of the United Nations (FAO), United States Agency for International Development (USAID), KfW Development Bank, Agence Française de Développement (AFD)

Public-Private Partnership

Ghana Investment Promotion Centre (GIPC)

Target Locations

See what country regions are most suitable for the investment opportunity. All references to Kosovo shall be understood to be in the context of the Security Council Resolution 1244 (1999)
country static map
semi-urban

Ghana: Ahafo Region

In 2019, the biggest dry weight loss in maize was observed in Brong Ahafo (68,082 tons), Eastern Ghana (57,082 tons), Ashanti (35,484 tons), Central Ghana (32,856 tons) and Northern Ghana (25,207 tons).(28)
semi-urban

Ghana: Eastern

The same year, the largest post-harvest losses in rice occurred in Northern Ghana (15,394 tons), Volta Region (11,314 tons), Eastern Ghana (3,103 tons) and Ashanti (2,432 tons).(29)
semi-urban

Ghana: Ashanti

Upper West, Northern and Upper East Ghana incurred losses of 12,658 tons, 11,205 tons and 10,493 tons respectively of sorghum.(30)
semi-urban

Ghana: Central

Northern, Upper West and Upper East Ghana incurred losses of 7,135 tons, 6,221 tons and 5,594 tons respectively of millet.(31)
semi-urban

Ghana: Northern

In 2016, Upper East, Upper West, Northern, Brong Ahafo and Volta were identified as areas of greatest concern, with 16% of households experiencing food insecurity.(15)

References

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