Ghana Food and Beverages Executive Summary SECTOR OVERVIEW IN GHANA African countries spend more than USD60bn annually importing food for their growing populations, but the continent has the potential to become a major food exporter. Agriculture remains the most significant sector of the economy, accounting for about half of GDP and a significant chunk of export inflows. Yams was the leading agricultural product in Ghana valued at USD1.8bn in 2013. Food sales over the forecast period to 2020 will grow by 17%, from GHS14bn in 2016 to GHS25bn in 2020. The largest food sales in Ghana over the five year forecast period are expected to be shell fish and preserved fish (doubling from GHS3bn in 2016 to GHS6bn in 2020). Ghana s beer sales represented the largest sales of beverages, increasing from 226 million litres in 2012 to a forecasted 327 million litres in 2020. Barring beer, red wine is expected have the largest alcoholic beverage sales in Ghana over the five-year forecast period to 2020 increasing by 6.7% TRADE Ghana is a net exporter of food and beverages. Ghana s exports of food and beverages were valued at ZAR42bn in compared to ZAR34bn in 2013, increasing by 24%. South Africa is a net exporter of food and beverages with Ghana. In, South Africa exported food and beverages valued at ZAR527m. The leading export product into Ghana was cocoa beans, valued at ZAR25bn. Cocoa paste (ZAR4.2bn) and cocoa butter (ZAR2.7bn). Except for 2004, the Western Cape also had a positive trade balance with Ghana from 2005 to. Exports were valued at around ZAR201m in. The leading export product from the Western Cape to Ghana in the food and beverages sector was fresh apples, pears and quinces, valued at ZAR50m. FDI Ghana is a net recipient of FDI in the food and beverage sector. Between January 2003 and September 2015 a total of 26 FDI projects were recorded into Ghana s food and beverage sector. These projects represent a total capital investment of ZAR20.66bn. The United States was the leading source market for Ghana s food and beverage sector investments with 7 investment projects (ZAR3.1bn) from 2003 to September 2015, followed by the United Kingdom and South Africa with 5 projects and 3 projects respectively. Between January 2003 and September 2015 a total of 3 FDI projects were recorded from South Africa to Ghana. These projects represent a total capital investment of ZAR788.56m.
Table of Contents 1. Definitions/descriptions... 3 2. Overview of food and beverage market in Ghana... 3 2.1 SWOT analysis of Ghana s food and beverage sector... 7 2.2 Companies... 8 3. Trade... 9 3.1 Ghana s Global Trade of Food and Beverages... 9 3.2 South African Trade of Food and Beverages with Ghana... 12 3.3 Western Cape Trade of Food and Beverages with Ghana... 13 3.4 Trade Regulations Markings and Standards... 14 3.4.1 Labeling Requirements and Markings... 14 3.4.2 Standards... 15 3.5 Tariffs for South African food and beverages... 15 4. FDI... 16 4.1 Inward FDI into Ghana s Food & Beverage Sector... 16 4.2 Outward FDI... 17 4.3 Bilateral FDI between South Africa and Ghana... 17 2
1. Definitions/descriptions According to FDI.net (2012), the food and beverage processing sector refers to the manufacturing, processing and preservation of meat, fish, fruit, vegetables, oils and fats; manufacture of dairy products; manufacture of grain mill products, starches and starch products and prepared animals feeds; manufacture of other food products (e.g. bread, sugar, chocolate, pasta, coffee, nuts and spices); and the manufacture of bottled and canned soft drinks, fruit juices, beer, wines, etc. This analysis includes unprocessed food and beverages such as raw fruit and vegetables, seeds and nuts. 2. Overview of food and beverage market in Ghana African countries spend more than USD60bn annually importing food for their growing populations, but the continent has the potential to become a major food exporter. Large areas of unused arable land, low fertiliser use and poor irrigation mean there is scope for improving yields in Africa, which are among the lowest in the world. A rising middle class continues to boost African demand for food products, especially for processed and packaged food, creating a continental food market that the World Bank estimates could be worth USD1trn in 2030. While exporters in Asia and Brazil stand to gain in the short term, BMI Research (2015) forecasts that food producers, processors and shippers in Kenya and South Africa, and retailers in Nigeria are all well placed to serve the growing African consumer market. Real GDP growth in Ghana is expected to accelerate in 2016 and 2017 driven by increasing oil production, improving electricity generation and diminishing deficits. This will increase disposable incomes over the next decade in Ghana, consumers will have more money to spend on essentials as well as on discretionary goods. Growing opportunities across the food, drink and mass grocery retail sectors will most likely interest businesses already present in Ghana, as well as those looking to enter the market (BMI, 2016). Agriculture remains the most significant sector of the economy, accounting for about half of GDP and a significant chunk of export inflows. Yams was the leading agricultural product in Ghana valued at USD1.8bn in 2013. Cassava and cocoa beans were ranked second and third valued at USD1.7bn and USD868m respectively. Ghana is the world's second-biggest cocoa producer behind Côte d'ivoire. Other top products include plantains (USD759m), taro (USD268m), maize (USD250m) and groundnuts (USD184m) (FAO, 2016). 3 GHANA AGRICULTURAL PRODUCTION, 2013 (USDm) Yams Cassava Cocoa, beans Plantains Taro (cocoyam) Maize Groundnuts, with shell Pineapples Meat, game Rice, paddy Oranges Tomatoes Beans, dry Chillies and peppers, dry Meat indigenous, chicken Meat, nes Mangoes, mangosteens, guavas Chillies and peppers, green Oil, palm Meat indigenous, cattle 1 804 1 670 868 759 268 250 184 181 162 159 128 126 124 112 67 59 57 55 52 52 0 200 400 600 800 1 000 1 200 1 400 1 600 1 800 2 000 Source: FAOSTAT, 2016
Value (GHSm) Ghana's food processing industry is highly fragmented, with few companies counting as major producers with widespread national reach. Among the multinational contingent, fast-moving consumer goods firms Cadbury, Nestlé and Unilever are well established with strong brand heritage. On the other hand, double digit economic growth and ensuing capital market development are likely to lay the groundwork for more domestic companies to emerge over the coming years. Food sales over the forecast period to 2020 will grow by 17%, from GHS14bn in 2016 to GHS25bn in 2020, driven primarily by economic growth that will increase the country's rising disposal incomes. GHANA FOOD SALES, -2020 30 000 25% 25 000 20 000 15 000 10 000 5 000 20% 15% 10% 5% Growth 0 2015 2016f 2017f 2018f 2019f 2020f GHSm 9 715 11 559 13 609 15 965 19 030 21 994 25 183 Growth 18,20% 18,98% 17,73% 17,31% 19,20% 15,58% 14,50% 0% Source: BMI Research, 2016 Food consumption is expected to grow strongly over the next few years as incomes rise as a result of a strong economic growth. Ghana s underdevelopment of organised retail provides plentiful longer term potential. Rising health consciousness will continue to provide opportunities for food processors. Furthermore the expanding expatriate and high-income consumer base will increase demand for food. It was reported in 2015 that the government of Ghana is turning to vegetables as it makes efforts to diversify the country's economy, which is currently heavily dependent on oil, gold and cocoa (BMI, 2016). 4 The largest food sales in Ghana over the five year forecast period are expected to be shell fish and preserved fish (GHS3bn in 2016 to GHS6bn in 2020), cereal products (GHS1.5bn in 2016 to GHS3.5bn in 2020), rice (GHS1.6bn in 2016 to GHS3.2bn in 2020), and fresh vegetables (GHS1.9bn in 2016 to GHS2.6bn in 2020).
GHSm GHANA'S FOOD SALES, -2020 6 000 5 000 4 000 3 000 2 000 1 000 0 2015 2016 2017 2018 2019 2020 Shellfish and preserved fish, 2 126 2 555 3 014 3 559 4 282 4 966 5 681 Other cereal products 941 1 183 1 550 1 925 2 390 2 910 3 532 Rice 1 069 1 312 1 576 1 894 2 320 2 728 3 159 Fresh vegetables 1 604 1 771 1 920 2 080 2 265 2 414 2 571 Root vegetables and mushrooms 1 361 1 498 1 616 1 738 1 873 1 975 2 083 Bread 665 813 973 1 164 1 421 1 666 1 925 Fish 621 770 933 1 131 1 396 1 652 1 923 Packet foods 526 660 809 989 1 233 1 469 1 719 Oils and Fats 478 578 685 812 981 1 143 1 312 Cooking oils and fats 448 541 641 761 919 1 070 1 229 Edible oils and animal fats 436 527 624 740 894 1 040 1 193 Dairy 384 454 528 615 724 838 966 Sugar and sugar products 202 245 292 348 423 495 570 Canned fruit and fruit based products 389 423 450 479 510 531 549 Milk products 241 278 316 360 416 471 531 Lamb 317 352 385 420 461 495 526 Ice cream 235 270 304 343 392 436 480 Eggs 135 167 202 243 294 352 418 Sugar 129 157 187 223 271 317 366 Poultry 143 165 187 212 244 273 303 Leaf and stem vegetables 89 110 133 162 200 236 275 Chocolate, sweets and similar 68 82 98 117 142 166 191 Baked goods 53 60 67 74 83 91 98 Margarine and spreads 30 37 43 52 62 72 83 Sauces and condiments 26 32 39 46 57 67 78 5 Source: BMI Research, 2016
GHSm Litres million Beer sales are expected to experience very strong growth in Ghana over our forecast period, reflecting both the country's strong macroeconomic outlook and healthy consumer spending momentum over our forecast period. Ghana s beer sales represented the largest sales of beverages, increasing from 226 million litres in 2012 to a forecasted 327 million litres in 2020. Economic momentum and accompanying investment into beer will drive up per capita consumption (BMI, 2016). GHANA BEER SALES, -2020 350 300 250 200 150 100 50 0 2015 2016f 2017f 2018f 2019f 2020f Beer 226 244 259 276 292 309 327 Source: BMI, 2016 Barring beer, red wine is expected to be the largest alcoholic beverage sales in Ghana over the five-year forecast period to 2020 increasing by 6.7% from 16.8 million litres in 2016 to 21.8 million litres in 2020, followed by white wine growing by 6.6%. GHANA ALCOHOLIC SALES, -2020 25,0 20,0 6 15,0 10,0 5,0 Source: BMI, 2016 0,0 2015 2016f 2017f 2018f 2019f 2020f Red Wine 14,6 15,8 16,8 18,2 19,2 20,6 21,8 White Wine 11,5 12,5 13,3 14,3 15,2 16,3 17,2 Spirits 2,1 2,4 2,5 2,5 2,5 2,6 2,7 Sparkling Wine 1,1 1,2 1,3 1,4 1,4 1,6 1,6 Gin 0,8 0,9 0,9 1,0 1,0 1,0 1,0 Fermented drinks, 0,3 0,3 0,3 0,3 0,4 0,4 0,4 Liqueur 0,2 0,2 0,2 0,2 0,2 0,2 0,2 Vodka 0,2 0,2 0,2 0,2 0,2 0,2 0,2 Vermouth 0,2 0,2 0,2 0,2 0,2 0,2 0,2 Among some of the core food and drink segments, soft drinks (principally carbonates) have a uniquely strong history in Sub-Saharan Africa. With disposable incomes generally low, carbonates have been able to serve as affordable indulgences and thirst quenchers. Low-cost carbonates have grown dynamically across Africa over the past decade in particular, with strong compound annual growth being recorded across much of Sub-Saharan Africa. The bottled water industry has grown strongly over the past few years. Rising incomes and health consciousness are boosting investment into bottled water as demand growth begins to strengthen (BMI, 2016).
Litres million Non-alcoholic drinks sales in Ghana are expected to grow by an average annual growth rate of 17% over the forecast period 2016 to 2020. GHANA NON-ALCOHOLIC DRINKS SALES, -2020 900 800 700 600 Source: BMI, 2016 500 400 300 200 100 0 2015 2016f 2017f 2018f 2019f 2020f Soft Drinks 313 374 441 517 616 712 816 Carbonated Drinks 209 251 297 351 419 486 560 Coffee 205 243 286 336 402 465 532 Fruit and vegetable juices 83 99 117 138 166 193 223 Mineral or spring waters 21 24 26 29 31 33 34 Tea 3 3 4 4 5 6 7 2.1 SWOT analysis of Ghana s food and beverage sector 7 The table below shows the SWOT analysis of Ghana s food and beverage sector: STRENGTHS Food consumption is expected to grow strongly over the next few years as incomes rise as a result of a strong economy. Ghana has a large population with rapidly evolving tastes and preferences. Ghana's relatively strong business environment makes it a good base to export to the rest of West Africa. Beer and soft drinks are well established, with a strong multinational presence. The underdevelopment of organised retail provides plentiful longer-term potential. OPPORTUNITIES With per capita food consumption still so low, there is room for long-term growth. Brand awareness is expected to grow significantly over the long term as disposable incomes rise. Domestic capital market development will most likely provide a platform for greater investment into food processing. Rising health consciousness will continue to provide opportunities for food processors. There are significant opportunities for 'premiumised' growth across all beverage segments With disposable incomes set to grow considerably over the next decade, significant investment into organised retail is expected. The expanding expatriate and high-income consumer base will continue to bolster demand. The arrival of global retailers such as Carrefour and Pick n Pay will make the sector more sophisticated over the longer term. Source: BMI Research, 2015 WEAKNESSES Per capita food spending is low and does not yet distinguish Ghana from most other countries in the region. Demand for formal retail outside the capital, Accra, is particularly weak. Internal trade systems remain weak, with producers carrying much of the distributional burden. A modern grocery retail network is virtually non-existent, with only one modern supermarket currently present. THREATS Weak infrastructure and underdeveloped internal trade systems make it expensive to reach consumers, particularly outside the capital, Accra. Incomes at the low end of the population may not rise as quickly as expected. The strength of the illicit beer market will continue to pose challenges to leading beer companies. Ghana's mass grocery retail development will likely depend on foreign investment in the sector.
2.2 Companies The table below gives the key companies in Ghana s food and beverage sector: GHANA FOOD AND BEVERAGE COMPANIES, 2016 COMPANY OWNERSHIP SUBSECTOR Guinness Ghana Breweries Limited (Diageo) SALES (USDm) Ghana Beverages - beer 160 Coca-Cola Bottling Company Ghana Ghana Beverages soft drinks 80 Fan Milk Ghana Food - dairy 95 Accra Brewery Limited (SABMiller) Ghana Beverages beer and soft drinks 25 SBC Beverages Ghana (PepsiCo) Israel Beverages soft drinks 10 Beverages soft drinks United Kingdom Food & beverage 150 Cadbury Ghana United Kingdom Food & beverage - confectionery - Cadbury Ghana Switzerland Food & beverage - Voltic Ghana Ltd (SABMiller) Ghana Beverages - bottled water - Source: BMI, 2016 8
Value (ZARm) 3. Trade 3.1 Ghana s Global Trade of Food and Beverages Ghana experienced a positive trade balance from 2004 to, making Ghana a net exporter of food and beverages. Ghana s exports of food and beverages were valued at ZAR42bn in compared to ZAR34bn in 2013, increasing by 24%, while imports were valued at ZAR24bn in decreasing by 14%. 45 000 40 000 35 000 30 000 25 000 20 000 15 000 10 000 5 000 0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports (ZARm) 9 300 8 977 12 041 15 033 21 627 21 133 23 714 32 734 31 361 33 669 42 300 Imports (ZARm) 4 774 5 490 5 905 8 543 12 657 10 085 11 328 17 257 21 855 28 042 23 503 Trade balance (ZARm) 4 526 3 488 6 137 6 491 8 970 11 047 12 385 15 477 9 506 5 627 18 798 Source: Trade Map, 2016 GHANA FOOD & BEVERAGE TRADE, 2004- Netherlands was the leading export market for food and beverages from Ghana in, valued at ZAR8bn and growing by 19% per annum over the last five years. Malaysia and France were ranked second and third, valued at ZAR4bn and ZAR3bn respectively. Other top export markets were United Kingdom (ZAR2.6bn), Belgium (ZAR2.5bn) and United States (ZAR2.3bn). The top food and beverage exports to the top three destination markets are as follows: 9 Netherlands Cocoa beans, ZAR4bn Cocoa butter, ZAR1.8bn Cocoa paste, ZAR648m Malaysia Cocoa beans, ZAR3.2bn Fixed vegetable fats & oils, ZAR180m Cocoa paste, ZAR23m France Cocoa beans, ZAR1.9bn Prepared/preserved fish & caviar, ZAR962m Carbo Dates, figs, pineapples, mangoes, avocadoes, guavas, ZAR116m
GHANA S EXPORT MARKETS OF FOOD & BEVERAGES, RANK DESTINATION MARKETS VALUE (ZARm) % GROWTH 2010-1 Netherlands 7 935 18.57% 2 Malaysia 3 654 57.37% 3 France 3 337 12.10% 4 United Kingdom 2 580-3.69% 5 Belgium 2 485 25.17% 6 United States of America 2 297 24.67% 7 Turkey 1 643 18.69% 8 Singapore 1 409 57.39% 9 Germany 1 375 19.49% 10 Brazil 1 194 83.90% 65 South Africa 10 65.10% TOTAL EXPORTS 42 300 15.81% Source: Trade Map, 2016 China was the leading source market for food and beverages to Ghana valued at ZAR2.5bn, followed by Vietnam and Thailand valued at ZAR2bn and ZAR1.9bn respectively. Other top import markets were Indonesia (ZAR1.5bn), United States (ZAR1.4bn) and Brazil (ZAR1.4bn). The top food and beverage imports from the top three source markets are as follows: China: Tomatoes prepared or preserved, ZAR1.1bn Prepared/preserved fish & caviar, ZAR335m Fish, frozen, whole, ZAR318m 10 Vietnam Rice, ZAR1.9bn Sugar confectionery, ZAR21m Fish, frozen, whole, ZAR5m Thailand Rice, ZAR786m Non-alcoholic beverages, ZAR119m Bread, biscuits, wafers, cakes and pastries, ZAR33m
GHANA S SOURCE MARKETS OF FOOD & BEVERAGES, RANK SOURCE MARKETS VALUE (ZARm) % GROWTH 2010-1 China 2 534 30.86% 2 Viet Nam 1 949 36.64% 3 Thailand 1 936 22.60% 4 Indonesia 1 469 50.03% 5 United States of America 1 367 31.46% 6 Brazil 1 352 5.88% 7 Malaysia 1 047 14.05% 8 Netherlands 1 016 17.84% 9 Nigeria 974 209.41% 10 Canada 826 6.68% 15 South Africa 547 17.04% TOTAL IMPORTS 23 503 20.69% Source: Trade Map, 2015 The leading export product into Ghana was cocoa beans, valued at ZAR25bn. Cocoa paste (ZAR4.2bn) and cocoa butter (ZAR2.7bn) were the second and third largest exported products in the sector. Rice was the largest import from Ghana into South Africa in valued at ZAR3.6bn. RANK GHANA S GLOBAL EXPORTS OF FOOD & BEVERAGES, GHANA S GLOBAL IMPORTS OF FOOD & BEVERAGES, PRODUCT VALUE (ZARm) % GROWTH 2010- RANK PRODUCT VALUE (ZARm) % GROWTH 2010-1 Cocoa beans, whole or broken, raw or roasted 25 369 38.27% 1 Rice 3 559 20.14% 2 Cocoa paste, whether or not defatted 4 187 20843.75% 2 Palm oil & its fraction 2 204 51.46% 3 Cocoa butter, fat and oil 2 735 78.14% 3 Cane or beet sugar 2 116 20.77% 4 Brazil nuts, cashew nuts & coconuts 1 707 657.47% 4 Meat and edible offal, of the poultry 1 682 24.63% 5 Prepared/preserved fish & caviar 1 621 212801.91% 5 Wheat and meslin 1 333 10.33% 6 Cocoa powder, without added sugar 903 7907.07% 6 Tomatoes prepared or preserved 1 242 33.13% 7 Dates, figs,pineapples, mangoes, avocadoes, guavas 776 308.96% 7 Fish, frozen, whole 1 193 17.88% 8 Fixed vegetable fats&oils & their fractions 759 171.05% 8 Non-alcoholic beverages 874 43.51% 9 Palm oil & its fraction 589 72.06% 9 10 Bananas and plantains, fresh or dried Milk and cream, concentrated or sweetened 810 31.98% 542 701.56% 10 Ethyl alcohol & other spirits 719 36.71% TOTAL EXPORTS 42 300 55.45% TOTAL IMPORTS 23 499 22.77% Source: TradeMap, 2016 11
Value (ZARm) 3.2 South African Trade of Food and Beverages with Ghana South Africa has a positive trade balance with Ghana and is a net exporter of food and beverage products from the country. In, South Africa exported food and beverages valued at ZAR527m compared to ZAR536m in 2013, representing a decrease of 1.7%. South Africa imported food and beverages from Ghana valued at ZAR11m in compared to ZAR3m in 2013, representing an increase of 267%. SOUTH AFRICA'S OF FOOD & BEVERAGES WITH GHANA, 2004-600,0 500,0 400,0 300,0 200,0 Source: Quantec, 2016 100,0 0,0 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports (ZARm) 124,6 200,1 174,8 197,3 276,5 283,2 279,4 366,7 403,8 536,0 527,4 Imports (ZARm) 16,6 9,9 11,8 6,7 6,3 11,9 19,5 45,0 4,2 3,0 10,5 Trade balance (ZARm) 108,0 190,2 163,0 190,6 270,2 271,3 259,9 321,7 399,6 532,9 516,9 The leading export product to Ghana was apples, pears and quinces, valued at ZAR62m, followed by food preparations (ZAR53m) and fruit juices (ZAR51m). The largest growing export to Ghana per annum from 2010 to was wine (306%), followed by cane or beet sugar (159%). The leading import product into South Africa from Ghana was fermented beverages valued at ZAR3m. Cocoa powder (ZAR0.5m) was the third largest import in value terms and was the largest growing import into South Africa growing at 1317% per annum over the last five years. 12 SOUTH AFRICA S EXPORTS OF FOOD & BEVERAGES TO GHANA, VALUE RANK PRODUCT (ZARm) 1 Apples, pears and quinces, fresh 61.8 78.87% 1 2 3 4 5 Food preparations not elsewhere specified or included Fruit juices (including grape must) and vegetable juices Waters, including mineral waters and aerated waters Cane or beet sugar and chemically pure sucrose, in solid form SOUTH AFRICA S IMPORTS OF FOOD & BEVERAGES FROM GHANA, VALUE GROWTH 2010- (ZAR) GROWTH 2010- RANK PRODUCT 53.1 10.49% 2 Other fermented beverages (for example, cider, perry, mead) Manioc, arrowroot, salep, jerusalem artichokes, sweet potatoes 2 981 155 78.70% 1 542 158-51.3 35.59% 3 Cocoa powder 535 477 1317.06% 50.5 60.70% 4 40.1 158.73% 5 Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry Undenatured ethyl alcohol; spirits, liqueurs 465 045 309.79% 237 620 277.36% 6 Sauces and preparations therefor 34.3-7.48% 6 Cocoa butter, fat and oil 190 403 337.13% 7 Undenatured ethyl alcohol 24.7 41.66% 7 8 Preparations of a kind used in animal feeding 16.2 11.01% 8 Malt extract; food preparations of flour, groats Flour, meal and powder of the dried leguminous vegetables 176 553 46.39% 153 246 57.36% 9 Wine of fresh grapes 15.0 305.66% 9 Dried vegetables, whole, cut, sliced 128 680-10 Maize (corn) 12.8 30.79% 10 Bread, pastry, cakes, biscuits 118 216 42.52% TOTAL EXPORTS 72.2 23.11% TOTAL IMPORTS 3 290 106 3333.46% Source: Quantec, 2016
Value (ZARm) 3.3 Western Cape Trade of Food and Beverages with Ghana Except for 2004, the Western Cape also had a positive trade balance with Ghana from 2005 to. Exports were valued at around ZAR201m in compared to ZAR255m in 2013, decreasing by 22%, while imports were valued at ZAR0.2m in compared to ZAR0.4m in 2013, decreasing by 50%. WESTERN CAPE FOOD & BEVERAGE TRADE WITH GHANA, 2004-300 250 200 Source: Quantec, 2016 150 100 50 0-50 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Exports (ZARm) 0,8 51,3 40,9 65,3 116,9 109,7 123,3 162,4 215,7 254,5 201,1 Imports (ZARm) 1,7 8,0 9,4 5,2 3,0 2,7 10,7 2,2 0,6 0,4 0,2 Trade balance (ZARm) -0,8 43,4 31,4 60,0 113,9 107,0 112,6 160,2 215,0 254,2 200,9 The leading export product from the Western Cape to Ghana in the food and beverages sector was fresh apples, pears and quinces, valued at ZAR50m. The second largest export to Ghana was fruit juices (ZAR16m) followed by wine (ZAR8m). Ghana is South Africa s 8 th largest African export market for wine, accounting for 3.3% (red wine makes up 52%, white wine 42%, Rose 3% and sparkling wine 2.7%). 13 Cocoa butter was the leading import product into the Western Cape from Ghana valued at ZAR0.1m. WESTERN CAPE S EXPORTS OF FOOD & BEVERAGES TO GHANA, VALUE GROWTH RANK PRODUCT 2010- (ZARm) WESTERN CAPE S IMPORTS OF FOOD & BEVERAGES FROM GHANA, VALUE GROWTH RANK PRODUCT 2010- (ZARm) 1 Apples, pears and quinces, fresh 50.3 12.89% 1 Cocoa butter, fat and oil 134 833-2 Fruit juices (including grape must) and vegetable juices 15.8 11.33% 2 3 Wine of fresh grapes 7.5 28.50% 3 4 Other fermented beverages (for example, cider, perry, mead) 5 Grapes, fresh or dried 3.3 22.78% 5 6 Prepared foods obtained by the swelling or roasting of cereals 7 Sauces and preparations therefor 3.0 18.05% 7 8 9 10 Bread, pastry, cakes, biscuits and other bakers' wares Malt extract; food preparations of flour, groats, meal, starch Chocolate and other food preparations containing cocoa Manioc, arrowroot, salep, jerusalem artichokes, sweet potatoes Ginger, saffron, turmeric (curcuma), thyme, bay leaves, curry 45 468-20 721-6.0 19.27% 4 Beer made from malt 1 081 - Flour, meal, powder, flakes, granules and pellets of potatoes 3.3 22.01% 6 Peel of citrus fruit or melons 2.9 35.57% 8 2.6 14.33% 9 2.4 36.69% 10 Sausages and similar products, of meat, meat offal Other prepared or preserved meat, offal or blood Extracts and juices of meat, fish or crustaceans, molluscs Prepared or preserved fish; caviar TOTAL EXPORTS 66.6 23.80% TOTAL IMPORTS 202 965 10.55% Source: Quantec, 2016
Butter milk, curdled milk and cream was the fastest growing export products in the short term (2013 to ), growing at 739% followed by cucumbers and gherkins and industrial monocarboxylic fatty acids growing at 406% and 128% respectively. In the medium term (2010-), the fastest growing export product category was also butter milk, curdled milk and cream. TOP 10 GROWTH OF WESTERN CAPE EXPORTS OF FOOD & BEVERAGE WITH GHANA, 2010- Buttermilk, curdled milk and cream, yoghurt, kephir 738,6% 2193,2% Cucumbers and gherkins 405,5% 1214,9% Industrial monocarboxylic fatty acids, acid oils 128,2% 450,0% Fruit juices and vegetable juices 140,9% 400,4% Dried leguminous vegetables, shelled Cocoa butter, fat and oil 66,0% 268,2% 54,0% 172,3% 2010-2013- Lard stearin, lard oil, oleostearin, oleo-oil and tallow oil 0,0% 98,2% Crustaceans, molluscs and other aquatic invertebrates 12,7% 97,8% Dried vegetables, whole, cut, sliced 13,5% 87,2% Fats and oils and their fractions, of fish or marine mammals 0,0% 45,7% Live fish Rye 45,4% 0,0% 33,3% 412,6% 14 Other animal fats and oils and their fractions Milk and cream 0,0% 10,5% -20,8% 10,3% -500% 0% 500% 1000% 1500% 2000% 2500% Source: Quantec, 2016 3.4 Trade Regulations Markings and Standards 3.4.1 Labelling Requirements and Markings Under Ghana s General Labelling Rule, all products imported or produced locally should bear the following, in English: Name of product; Net mass or weight or net volume of content; Composition of content of product; Date of manufacture of product; Date of expiry of product (or best before date); Batch or lot number of product; Name and address of manufacturer or agent; Directions for use, if relevant; Any special instructions for storage, handling; etc. and Any pertinent warnings.
3.4.2 Standards Overview Ghana generally follows British or European standards. Ghana uses 220V, 50 cycles for electricity and the metric system of measurement. Standards Organizations The Ghana Standards Authority (GSA), formerly known as the Ghana Standards Board is the authority responsible for developing and promulgating standards as well as ensuring that the quality of goods imported into Ghana meets acceptable standards. The Food and Drug Board (FDB) also regulates and certifies food, drugs, cosmetics and other products that have health implications for consumers. This situation does involve some overlap between the two bodies, a situation which the government of Ghana (Ministry of Trade and Industry) is attempting to resolve requirements. 3.5 Tariffs for South African food and beverages Ghana imposes the highest tariffs on the import of beverages, spirits and vinegar from South Africa at 19.7%. TARIFFS IMPOSED BY GHANA TO SOUTH AFRICAN FOOD AND BEVERAGE IMPORTS, HS CODE PRODUCT EQUIVALENT AD VALOREM TARIFF 02 Meat and edible meat offal 20 03 Fish, crustaceans, molluscs, aquatic invertebrates nes 5 04 Dairy products, eggs, honey, edible animal product nes 20 07 Edible vegetables and certain roots and tubers 17.5 08 Edible fruit, nuts, peel of citrus fruit, melons 20 09 Coffee, tea, mate and spices 20 10 Cereals 15.7 11 Milling products, malt, starches, inulin, wheat gluten 17.6 15 Animal,vegetable fats and oils, cleavage products, etc 18.7 16 Meat, fish and seafood food preparations nes 20 17 Sugars and sugar confectionery 11 18 Cocoa and cocoa preparations 20 19 Cereal, flour, starch, milk preparations and products 16.5 20 Vegetable, fruit, nut, etc food preparations 20 21 Miscellaneous edible preparations 20 22 Beverages, spirits and vinegar 19.7 Source: TradeMap, 2016 15
Capex (ZARm) 4. FDI 4.1 Inward FDI into Ghana s Food & Beverage Sector Between January 2003 and September 2015 a total of 26 FDI projects were recorded into Ghana s food and beverage sector. These projects represent a total capital investment of ZAR20.66bn which is an average investment of ZAR794.42m per project. During the period, a total of 13,806 jobs were created. Ghana is a net recipient of investment in this sector. INWARD FDI INTO GHANA'S FOOD & BEVERAGE SECTOR, 2003-SEP 2015 12 000 7 10 000 6 8 000 6 000 4 000 5 4 3 2 Projects 2 000 1 0 2003 2005 2006 2008 2009 2010 2011 2013 2015 Capex (ZARm) 10 440 207 1 172 794 965 793 1 016 682 4 194 397 Projects 2 3 1 2 2 2 4 3 6 1 Source: FDI Intelligence, 2016 The United States was the leading source market for Ghana s food and beverage sector investments with 7 investment projects representing a capital investment of ZAR3.1bn from 2003 to September 2015, followed by the United Kingdom and South Africa with 5 projects and 3 projects respectively. 16 GLOBAL FDI INTO KENYA S FOOD, BEVERAGE & TOBACCO SECTORS, 2003- SEPTEMBER 2015 RANK SOURCE COUNTRY PROJECTS % PROJECTS CAPEX (ZARm) % CAPEX COMPANIES 1 United States 7 26.92% 3 089 14.95% 6 2 UK 5 19.23% 11 376 55.06% 3 3 South Africa 3 11.54% 789 3.82% 3 4 Switzerland 3 11.54% 621 3.01% 3 5 Brazil 1 3.85% 293 1.42% 1 6 France 1 3.85% 397 1.92% 1 7 Italy 1 3.85% 397 1.92% 1 8 Japan 1 3.85% 195 0.94% 1 9 Mauritius 1 3.85% 2 929 14.18% 1 10 Singapore 1 3.85% 369 1.79% 1 TOTAL 26 100.0 20 661 100.0 23 Source: FDI Intelligence, 2016 Guinness Ghana from the United Kingdom was the largest investor into Ghana s beverage, food and tobacco sector, with 3 projects worth ZAR10.5bn, followed by Archer Daniels Midland from the United States with 2 projects valued at ZAR476m.
COMPANIES INVESTING INTO GHANA S FOOD & BEVERAGE SECTOR, 2003-SEPTEMBER 2015 INVESTING COMPANY ACTIVITY PROJECTS CAPEX (ZARbn) Guinness Ghana United Kingdom 3 10 510 Archer Daniels Midland United States 2 476 Angel Lopez Soto (ALFRIO) Spain 1 12 Barry Callebaut Switzerland 1 117 Cargill United States 1 1 172 CFAO Group Japan 1 195 Cobega United States 1 568 Cocoa Touton Processing France 1 397 Distell Group South Africa 1 400 DOS Palm Oil Production Limited United Kingdom 1 397 TOTAL FROM TOP 10 INVESTORS 26 20 661 Source: FDI Intelligence, 2016 4.2 Outward FDI Between January 2003 and September 2015 a total of 2 FDI projects were recorded from Ghana into the food and beverage sector. These projects represent a total capital investment of ZAR119.51m which is an average investment of ZAR59.76m per project. During the period, a total of 43 jobs were created. DATE OUTWARD FDI FROM GHANA FOOD & BEVERAGES SECTOR, 2003- SEP 2015 INVESTING COMPANY DESTINATION COUNTRY SUB-SECTOR BUSINESS ACTIVITY VALUE (ZARm) Apr 2010 Kasapreko Nigeria Breweries & distilleries Manufacturing 117.2 Feb 2004 Lartey Associates Germany Source: FDI Intelligence, 2016 Fruits & vegetables & specialist foods Sales, Marketing & Support 2.3 17 4.3 Bilateral FDI between South Africa and Ghana Between January 2003 and September 2015 a total of 3 FDI projects were recorded from South Africa to Ghana. These projects represent a total capital investment of ZAR788.56m which is an average investment of ZAR262.46m per project. During the period, a total of 576 jobs were created. Highlights of the investments (from the Financial Times) are below as follows: In, Pick n Pay, a food and general merchandise retailer, investing in Ghana in the food & tobacco sector in a Retail project. The company sees potential in the country s growing economy and has begun to sign leases and develop its locations in preparation for a launch. In, Distell Group, investing in the city of Accra (Greater Accra Region), Ghana in the beverages sector in a manufacturing project by establishing a new bottling plant in Accra, Ghana. The plant aims to produce a range of beverages for distribution in Ghana and neighbouring countries. In, Shoprite invested in the city of Accra in the food & tobacco sector in a retail project. The planned outlet will serve as the anchor tenant for the planned Mallam Junction Mall which is being developed by US-based BG International. The mall is scheduled for completion in 2016. There was no FDI from Ghana into the South African food and beverages sector. There was no inward investment into the food and beverage sector from Ghana into the Western Cape, nor was there outward investment from the Western Cape to Ghana. For more information on this publication and other Wesgro publications please contact research@wesgro.co.za or for more publications visit the Wesgro publications portal on our website at http://wesgro.co.za/publications