How the Fertilizer Subsidy Program can Boost Economic Growth and Employment in Ghana
Ghana’s agricultural sector has performed sluggishly in recent years, expanding at just 3.6% a year between 2010 and 2016, compared with average growth of 7.2% in the economy overall. Any growth in the sector has mostly been attributed to land expansion rather than improvements in productivity, raising serious concerns about sustainability, especially given Ghana’s rising levels of urbanization. To promote productivity and create jobs in the agricultural sector, Ghana’s government rolled out the Planting for Food and Jobs (PFJ) program in 2017. The program encourages farmers to adopt new technologies, such as improved seeds and fertilizers, by providing incentives and appropriate training, as well as improved access to markets through the use of ICT. The experience of numerous countries suggests agricultural transformation increases productivity, and that the use of modern agricultural inputs such as fertilizer is an essential feature of this transformation. However, there is no consensus on the economic impact of input price subsidy programs. The cost of implementing such programs is often high, and evidence on their impacts is mixed.