Grain storage infrastructure
Grain storage infrastructure
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
- Ghana: Ahafo Region
- Ghana: Eastern
- Ghana: Ashanti
- Ghana: Central
- Ghana: Northern
Sector Classification
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.
Agricultural Products
Pipeline Opportunity
Grain storage infrastructure
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
Market Size and Environment
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
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
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
Business - Supply Chain Constraints
Capital - CapEx Intensive
Impact Case
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
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
Directly impacted stakeholders
People
Gender inequality and/or marginalization
Planet
Corporates
Indirectly impacted stakeholders
Public sector
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
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.
Who
Small and medium-scale farmers who bear high product losses and therefore have reduced incomes. Processing facilities, wholesalers and retailers, who benefit from improved access to food supplies.
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
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
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
Ghana: Ahafo Region
Ghana: Eastern
Ghana: Ashanti
Ghana: Central
Ghana: Northern
References
- (I) World Bank database. https://data.worldbank.org/ (II) IHS Markit. Comparative Industry Forecast Tables, Agriculture, ISIC Classification Rev. 4. (III) Republic of Ghana (2017). Medium-Term National Development Policy Framework: An Agenda for Jobs: Creating Prosperity and Equal Opportunity for All (First Step) 2018-2021. https://s3-us-west-2.amazonaws.com/new-ndpc-static1/CACHES/PUBLICATIONS/2018/08/23/Medium-term+Policy+Framework-Final+June+2018.pdf (IV) Sachs, J., Schmidt-Traub, G., Kroll, C., Lafortune, G., Fuller, G., Woelm, F. 2020. The Sustainable Development Goals and COVID-19. Sustainable Development Report 2020. Cambridge: Cambridge University Press. (V) Ministry of Food and Agriculture (2018). Investing For Food and Jobs (IFJ): An Agenda for Transforming Ghana’s Agriculture (2018-2021). https://mofa.gov.gh/site/images/pdf/National%20Agriculture%20Investment%20Plan_IFJ.pdf (VI) Send Ghana (2014). Women and Smallholder Agriculture in Ghana - Policy Brief 2014. https://www.sendwestafrica.org/phocadownload/Women%20and%20Smallholder%20Agriculture%20in%20Ghana%20Policy%20Brief%20-%20Copy.pdf
- (1) Ghana Investment Promotion Centre (2017). Doing business in Ghana - To Know and Invest in Ghana.
- (2), (4), (5), (6), (7) Manandhar, A. and Milindi, P. (2018). An Overview Of The Post-Harvest Grain Storage Practices Of Smallholder Farmers In Developing Countries. Agriculture. https://www.researchgate.net/publication/324539264_An_Overview_of_the_Post-Harvest_Grain_Storage_Practices_of_Smallholder_Farmers_in_Developing_Countries
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