Ghana’s Citrus Sector Faces Challenges from Payment Delays and Funding Gaps

Ghana’s citrus industry faces challenges from payment delays and funding gaps, affecting liquidity and production utilization. Stakeholders have called for a government-supported financial mechanism to assist farmers, as current structures hinder timely payments. The government recognizes this issue and commits to improving support for the citrus sector.

The citrus sector in Ghana is confronting obstacles related to liquidity issues and delayed payments. Expected production in 2024 is estimated at 440,000 tons; however, only 40 percent of this is effectively utilized, leading to significant waste or loss for producers. Stakeholders assert that a lack of funding is crippling farmers’ ability to remain operational while awaiting payment from juice processors.

Representatives gathered during a meeting between the Orange Growers Association (OGA) and the Ministry of Food and Agriculture (MoFA) in Accra, discussing the structural weaknesses within the supply chain. They urged the creation of a government-backed financial mechanism to alleviate these challenges. Theodore Tsidi Kloba, the OGA’s Business Development Manager, noted, “We are talking about a sector with immense potential… By volume, citrus production now exceeds cocoa, yet we have only tapped into 40 percent of its economic value.”

The global citrus industry reached a value exceeding US$17 billion in 2023, as reported by the Observatory of Economic Complexity (OEC). However, limited financial mechanisms hinder processors’ capacity to purchase raw materials, consequently straining farmers. Mr. Kloba remarked, “By the time payments are made, farmers are already in financial distress, unable to reinvest in their farms.”

Payment delays for processors are compounded by extended export procedures and the terms set by international buyers. Ben Brown, Managing Director at SONO Ghana, described the payment timeline: “When I buy the fruit, it takes one day to process, another five days to store, three weeks to ship, and 45 days for my customer to pay.”

The Ministry of Food and Agriculture acknowledged the current financing challenges and committed to providing structured support. Minister Eric Opoku stated, “The citrus sector represents one of our most promising agricultural frontiers… We will work on a comprehensive support package that will bridge the payment gap currently crippling the industry.”

Participants have advocated for direct financial intervention to resolve the liquidity crisis, emphasizing the need for a revolving working capital fund to enable prompt payments to farmers. Concerns were also raised regarding the abandonment of farms and the aging farmer population. Mr. Kloba warned, “Without immediate financial support, we risk losing a significant portion of our production base.”

In summary, Ghana’s citrus sector is experiencing significant strain due to payment delays and funding gaps, impacting both farmers and processors significantly. Stakeholders call for a structured financial mechanism to support the industry while the government acknowledges the need for strategic intervention. With proper funding and support, there is potential to transform this sector into a vital economic contributor.

Original Source: www.freshplaza.com