Flour industry in the country is controlled by a small producer group. While there are 23 flour mills in 2000, this decreased to 10 in 2013 and 9 in 2014. 5 of them dominate 90 percent of the flour industry in the country. In Ghana, it is known that there are 3 flour mills. 80 percent of wheat flour produced in the country is used to produce bread. Remaining 20 percent is also used for cake and other bakery product.
Being located on Midwestern of Africa, Nigeria is one of the countries having the largest land area. Nigeria, which has the largest population in Africa with 181 million (2015 estimate), achieved independence from Britain and became federated. Being a rich country in terms of natural sources, Nigeria has an equatorial climate in South, tropical inland and arid climate in the North. Fertile land rate of the country is 37,3 percent.
Being located on the coasts of Guinea Gulf in Western Africa, Ghana has a population of 26,3 million in total. Achieving independence from Britain in 1957, Ghana is seen as a model for other African countries today although it had many politically unsteady years. On southern east and western parts of the country, dry and hot climate, on southern West humid climate is seen.
GENERAL ECONOMIC OUTLOOK
Being the 12th biggest oil producer and 8th oil exporter, Nigeria is the number one trade partner of USA in Sub-Sahara Africa. USA realizes 11 percent of its crude oil import from Nigeria. This makes 46 percent of total crude oil export of Nigeria. Although growth in oil industry since 2005 fell behind the other industries, increasing oil prices in 2007 and 2008 enabled a serious growth in oil revenues. Political tension, conflict and sabotage to oil facilities in Niger Delta which is the most important oil area of the country prevent the nation make production and exportation with a capacity of 100 percent. In the country where heavy industry has not developed enough, the government adopted heavy industry policy in order to develop steel, petro chemistry, fertilizer and metal industry with the help of industry. Textile, beverage, cigarette, detergent and cement industries form 60 percent of industrial production.
High growing rates that Nigeria has had recently became remarkable. In this aspect, it is observed that Nigeria, which has been trying to strengthen its economy through market-based reforms recently, is struggling to quit capital-based oil industry, to strengthen and diversify its economy. Despite all of these developments, Nigeria is counted as a country where doing business is difficult due to problems in cases such as acquisition of property, getting the planning permission, international trade and paying taxes. Showing a serious growing rate in economy recently, Ghana has been strengthening its international relations since 2000s. Gaining speed by globalizing with Kofi Annan who was Secretary General of United Nations, Ghana has become one of the most mentioned countries following African countries in this period. Agriculture is the main industry of economy and shares 35 percent of GDP. Service industry shares around 30 percent and industry shares 25 percent of GDP. GDP of Ghana has shown a significant development in recent years. Being around 7,7 percent in 2010, GDP has reached a record level like 14,4 percent in 2011. As a result of ongoing developments in agricultural industry in the country, increasing gold production in significant rate, ongoing improvements expected in oil production and services industry, it is foreseen that a growing rate above 5 percent can be gained in the upcoming years. Significant developments in communication and construction industry in Ghana are expected to continue in the upcoming period. Recently applied economy policies in Ghana focused on areas such as using public expenses efficiently, increasing public expenditures, increasing business and investment opportunities, expanding credit usage opportunities and supporting private sector. Besides, subjects such as prioritizing infrastructure investments, eliminating poverty, oil production and increasing exportation are what Ghana government overemphasized.
THE PLACE AND IMPORTANCE OF AGRICULTURE
As well as oil industry, agricultural sector which has been traditional to a great extent forms the main sources for export revenues of the country from 1960 to 1970 when the country achieved independence and shared more than 60 percent of GDP. Although Nigeria was mostly an agricultural product exporter when it achieved independence in 1960 became an important agricultural importer as a result that contribution of agriculture to economy has decreased in years. Since 1970, various attempts having been made in order to revive agriculture again since 1970; however these attempts were not successful due to applied policies and deficiencies in investments. Agricultural sector sharing 70 percent of employment today also shares 20,6 percent of GDP. Development of agriculture in the country remained limited. Creating the main national food production program at the end of 1970s, President Olusegun Obasanjo strived to put a spotlight on agricultural improvements after he came to power in 1999. Primary reasons having significant roles in agriculture’s being falling behind are that many agricultural lands are small, agricultural mechanization is inadequate, agricultural input supply is highly insufficient and reaching modern technology is limited.
Significant investments are required for modernization of agricultural industry in Nigeria. Desertification in the North, erosion in middle and South of the country are counted as the most significant threads for agricultural lands. Besides, due to insufficient policies and investments, expected results weren’t obtained and Nigeria became an agricultural products importer. Primary agricultural products in the country are pulses, sesame, cashew nut, cassava, cacao, peanut, corn, millet, watermelon, rice, sorghum, soy bean and sweet potato.
Domestic economy is still based on agriculture in Ghana and agriculture shares 40 percent of GDP and 55 percent of employment. Agricultural industry is run by small family businesses in Ghana. Growth in the sector is behind the other industries and the sector face various risks as it depends mostly on climate conditions. Only 1 percent of cultivated land is irrigated.
The most important agricultural product in the country is cacao. Cacao is also the most important import good together with gold. Forestry products, vegetables, seafood and pineapple follow cacao as agricultural products. Agricultural sector is open to fluctuations of prices in international markets. Studies to increase product range in agriculture remains limited.
In the recent years, growth in cacao industry developed along with extension in forestry sub-sectors and this growth was realized above 5 percent per annum. After the expand of 0,8 percent in agricultural sector in 2011, an expand over 3 percent was realized in 2012. Developments about cacao production have significant impact on agricultural sector. Recently, growth in agricultural sector was reasoned from the growth in cacao sector. Positive developments in agricultural sector are reasoned from long term positive impact of public policies as well as good weather conditions. In the frame of economic reforms, the government abandoned food price controls and increased the payments to producers for cacao and other products, and also increased the supports to agriculture through various services. According to the Africa Human Development Index, continuously cultivated lands in Ghana have increased gradually and cultivated lands which were 2,8 million hectares in 1995 reached to 4 million hectares. Together with this, sufficient development is not obtained in food products in Ghana. In the last 10 years, positive increase has seen in cacao, cassava and rice production. But increase in production of other products stayed limited. This resulted from insufficient investments, weak technology and recently cultivated lands’ being poor quality.
GRAIN PRODUCTION AND CONSUMPTION IN NIGERIA
According to the data of US Department of Agriculture, Foreign Agricultural Service (USDA FAS), corn ranks highest in grain production in Nigeria. İncreasing to 6,5 million tons in 2004/05 season, corn production exceeded over 7 million tons and reached to 8,9 million tons in 2009/10 season. Reaching the highest production level of the last 11 season with a production amount of 9,2 million ton in 2011/12 season, Nigeria produced more than 7,6 million tons of corn in 2012/13 and 2013/14 seasons and 7,5 million tons in 2014/15 season. In 2015/16 season, corn consumption is expected to be 7 million. Having nearly the same consumption amounts like in production, Nigeria reached the highest consumption amount with 9,2 million tons in 2011/12 season. Nigeria consumed 7,8 million tons of corn in 2012/13 and 2013/14 seasons and 7,6 million tons in 2014/15.
Second highest produced grain in Nigeria is sorghum. Producing 9 million tons of sorghum in 2003/04 season increased this amount above 10 million tons in 2004/05 and 2008/09 season. Although it increased a little in 2010/11 and 2011/12 seasons, sorghum production amount which decreased to 6,6 million tons in 2009/10 season decreased below 6 million tons in 2012/13 season and was realized as 6,7 million tons in 2014/15 season. Sorghum consumption in Nigeria is parallel to production amount. In 2015/16 season, it is estimated to be around 6,1 million tons. Sorghum consumption amount which is 8,9 tons in 2003/04 season increased over 10 million tons in 2005/06 season. Consumption amount falling back to 6,5 million tons in 2009/10 season decreased to 6,5 million tons in 2013/14 and 6,6 in 2014/15 season.
The most produced grain after sorghum is rice. Rice production in Nigeria which was 1,8 million tons in 2003/04 season increased to 2 million tons and reached the highest production amount of the last 11 years with 2,877 million tons in 2011/12 season. Rice production which was realized as 2,3 million tons in 2012/13 season increased to 2,7 million tons in 2013/14 and recorded as 2,5 million tons in 2014/15 season. It is estimated that rice production will reach 2,7 million tons in 2015/16 season. It is seen that rice production is insufficient for meeting the consumption amount. Rice consumption amount which was 3,6 million tons in 2003/04 season increased continuously and reached to 5,6 million tons in 2011/12 season. Although consumption amount fell back to 5,3 million tons in 2012/13 season reached to 5,8 million tons in 2013/14 and 6,4 million tons in 2014/15 season.
Wheat production of Nigeria is very low in comparison to its consumption amount. It reached to 100 thousand tons between 2006/07 and 2011/12 seasons and it remained below 100 thousand tons. Wheat production of Nigeria in 2014/15 season is 70 thousand tons. Despite low amounts in production, and small scale fluctuations happened sometimes, wheat consumption in Nigeria increases gradually. According to the data of USDA, wheat consumption of Nigeria which was 2,4 million tons in 2003/04 season exceeded 3 million tons between 2004/05 and 2012/13 seasons.
Wheat consumption which was realized as 4,1 million tons in 2013/14 season stayed at 3,8 million tons in 2014/15 season. However new estimates point that consumption will be above 4 million tons in 2015/16 season.
GRAIN PRODUCTION AND CONSUMPTION IN GHANA
Ghana is very limited country in terms of grain production. According to the data of US Department of Agriculture, Foreign Agricultural Service (USDA FAS), it is seen that corn has the highest production amount in Ghana. However this is around 1 or 2 million tons. producing 1,2 million tons corn in 2003/04 season, Ghana produced 1,1 million tons of corn in 2004/05, 2005/06 and 2006/07 seasons. Production which was 1,2 million tons in 2007/08 season continued to increase in the following seasons and reached 1,872 million tons in 2010/11 season.
The highest corn production amount of the last 11 season was reached with 1,950 million tons in 2012/13 season. Corn production which was 8 million tons in 2014/15 season is estimated to stay in this level again. Corn consumption amount is nearly the same with production. Corn consumption which was realized as 1,2 million tons in 2003/04 season reached to 1,5 million tons in 2008/09 season. Continuing to increase in the following seasons, corn consumption rose to 1,9 million tons in 2013/14 season. Corn consumption in Ghana was realized as 1,8 million tons in 2014/15 season.
Production and consumption amount of other grains as well as corn in Ghana stayed below 1 million tons. The highest production of rice, one of these products, is 300 thousand tons. Producing rice below 200 thousand tons between 2003/04 and 2008/09 seasons, Ghana produced 235 thousand tons of rice in 2009/10 seasons and this amount increased to 300 thousand tons in 2014/15 season. It is seen that rice production is insufficient for meeting the rice consumption in Ghana. From 2003/04 to 2010/11 seasons, between 463 thousand tons and 608 thousand tons of rice were consumed. Exceeding over 700 thousand tons since 2010/11 season reached to 960 thousand tons in 2014715 seasons, namely the highest amount of the last 11 years.
Production amount of sorghum is a little more than rice. Being realized above 300 thousand tons between 2003/04 and 2010/11 seasons (decreased only between these two seasons), sorghum production declined below to 300 thousand tons and recorded as 251 thousand tons in 2013/14 and 293 thousand tons in 2014/15 season. ıt is estimated that production will be above 300 thousand tons again in 2015/16 season.
Wheat is another grain which is not produced in Ghana. However wheat is the third-most consumed grain among other grain products. From 2003/04 to 2008/09, 306 thousand tons and 426 thousand tons of wheat consumption were realized. This increased over 415 thousand tons since 2009/10 season. Continuously increasing in the following seasons, wheat consumption reached to 535 thousand tons in 2012/13 season and 550 thousand tons in 2013/14 season. It reached to the highest production level with 560 thousand tons in 2014/15 season.
GRAIN TRADE IN NIGERIA
According to the data of USDA, wheat is the most imported grain product in Nigeria. Wheat production is insufficient for meeting wheat consumption and it is imported to meet the demand. Mostly over 3 million tons of wheat was traded in Nigeria between 2003/04 and 2009/10 seasons. Import amount decreased below 3 million tons only in 2003/04 and 2007/08 seasons. Wheat import which was realized as 4 million tons in 2010/11 season was recorded as 4,1 million tons in 2012/13 season, 4,5 million tons in 2013/14 season although it decreased to 3,9 million tons in 2011/12 season. Lastly, wheat import of Nigeria which was recorded as 4,2 million tons is estimated to be 4,4 million tons in 2015/16 season. It is seen that Nigeria do not produce considerable amount of wheat and uses some of wheat it imported for export activities. While any export activities seem between 2003/04 and 2008/09 seasons, it is seen that in 2008/09, 2009/10 and 2010/11 seasons around 500 thousand tons of wheat is exported. Although export amount decreased a little in 2011/12 and 2012/13 seasons it increased to 500 thousand tons in 2013/14 season and 400 thousand tons in 2014/15 season.
The second most traded grain product which Nigeria imported is rice. Nigeria produces above 2 million tons of rice. However this is insufficient for meeting consumption amount. For this reason, Nigeria imports rice. It is seen that rice import has been increasing gradually since 2003/04 and reached 2,4 million tons in 2010/11, 3,2 million tons in 2013/14 season and 4 million tons in 2014/15 season. Estimate for 2015/16 season is around 3 million tons.
Corn import amount of Nigeria seems low. While any considerable import amount was recorded from 2003/04 season to 2009/10 season, it is observed that only 100 thousand tons of corn was imported between 2009/10 and 2011/12 season. Rising to 200 thousand tons since 2012/13 season, import amount was recorded as 300 thousand tons in 2014/15 season. Corn export, however, seems to be realized as 100 thousand tons from 2006/07 to 2014/15 season. It has also reached to 200 thousand tons in 2014/15 season.
GRAIN TRADE IN GHANA
The primary imported grain products in Ghana are rice and wheat. Rice import is realized in order to meet consumption amount, so there is no export activity recorded. Importing around 400 thousand tons of rice between 2003/04 and 2006/07 seasons, Ghana decreased its imports below 400 thousand tons between 2006/07 and 2010/11 seasons. Rica import which started to increase again by 2010/11 season rose to 530 thousand tons in 2013/14 and 650 thousand tons in 2014/15 season.
In Ghana where wheat is not produced but consumed increasingly, wheat import is realized in order to meet increasing wheat consumption. In Ghana, around 300 thousand tons of wheat was imported between 2003/04 and 2009/10 seasons and this increased to 430 thousand tons in 2009/10, 571 thousand tons in 2011/12 and 579 thousand tons in 2013/14 season. Wheat import of Ghana which stayed around 550 thousand tons is estimated to reach 575 thousand tons in 2015/16 season.
FLOUR INDUSTRY IN NIGERIA AND GHANA
It is observed that the demand for bakery products such as bread, noodle, bread and biscuits is high in Nigeria which is a large market for wheat and rice. Flour industry in the country is controlled by a small producer group. It is known that there are 9 flour mills in Nigeria by 2014. While there are 23 flour mills in 2000, this decreased to 10 in 2013 and 9 in 2014. 5 of them dominate 90 percent of the flour industry in the country. Most of the flour mills which operate below their installed capacity locate on the port so that their storage facilities are very limited.
In Ghana, it is known that there are 3 flour mills. Producing 270 thousand tons of flour per annum, imports all of the flour to use in bread production. 80 percent of wheat flour produced in the country is used to produce bread. Remaining 20 percent is also used for cake and other bakery product. Ghanaian consumers prefer high quality hard wheat flour.