Help tools and investment potentials of wheat business in ghana (case study: olam, ghana)

Thesis Abstract

The purpose of this study is aimed at investigating the business viability of the investment potential of wheat business in Ghana. Wheat is one of the oldest and most commonly consumed cereals in Ghana. Wheat is sold in Ghana mostly unpacked for the consumption of all. Unbranded wheat sold at the market leaves lots of doubt about its credibility and the origin of the cereal. This research presents ways in which business investors can reap the full benefit of branding and extending the market communication mix of the food and agriculture industry with the aim of attracting more locals to adopt wheat as a staple food.

The research is made on business expectations and prospects to reveal the current situation present in the industry with regards to the consumption of wheat. Help tools are given, this serves as a yardstick, which in turn aids investors towards branding the cereal by establishing a trademark among others to satisfy the consumer at a profit. This material also serves as a guide book for an entrepreneur or investor whose target is to brand the cereal and expand the market communication in other sub-Saharan regions.

1. Introduction

Wheat is considered as one of the most common cereal present in most third world countries, which Ghana is a part of. Wheat is mostly sold in Ghana unpacked to the indigenous people. This practice leaves much to be questioned. Unpacked wheat carries no identification stating for example the origin and chemical composition together with instructions on its usage. Most wheat sold in Ghana is unpacked, which opens a business opportunity for investors to penetrate into such industry. Litigations on the cereal are unfounded since the availability of brand awareness is little known with regards to sales made. Research shows that Ghanaian inhabitants brace the usage of wheat as playing a major role in the daily livelihood of an average income earner. Ghana has a rich history which is similar to other West African countries. Food, clothing and beliefs are common amongst people in the Sub Saharan region. Packed wheat is imported mainly from the Canada and U.S.A and is sold at a higher price in the region. An average bag of wheat per kilo sold in Europe e.g in Finland, (Hot Curry Market, Vaasa) costs 4.5 euros, the same product imported to Ghana costs 10 Ghana cedis. This result shows that the local inhabitants are liable to purchase the same amount of kilo per wheat equivalent to the price sold in Europe.

Andrew Washington et al of Southern University in their research “The derived demand for imported wheat in Ghana” write that economic reforms in Sub-Saharan Africa (SSA) are changing the perception international businesses have about the potential for this region to be economically profitable. This is gradually leading the continent to be more economically viable. He recognizes the removal of exchange controls, liberalization of investment regimes, and privatization of state owned industries, elimination of subsidies and price controls, and finally instituting tighter government discipline as factors that are paving way for new businesses to be established in the Sub-Saharan region. The research revealed the replacement of foreign developmental aid to direct foreign investment as one single most important factor. Nigeria is known to be the biggest importer of wheat with wheat importation from United Sates whilst Ghana with a lesser population imports wheat mainly from Canada and at times from India (source http//www.irinnews.org/report/96546/).

Wheat that is imported in the Sub Saharan region usually is not processed into its finest state and is usually packed in 30 kilogram silos. This type of wheat is mostly known to have lots of husk which makes it hard to digest. In the latter part, a research will be conducted to see the business potential of branding or importation of a more refined, and branded wheat for the acceptability and consumption of locals in Ghana and the sub-Saharan region.

Ghana has a rich agricultural land and climate but not well enough for inland cultivation of the cereal. This is because the cereal grows best in dry, mild climate, climates that are too hot or too cold ruins development of the crop. The Prairies located in North America is known to have a good climate suitable for the cultivation of wheat. Ghana`s hot climate makes it less conducive to cultivate the cereal. It has two weather climates namely the rainy season and the dry season. In the rainy season, temperature averages 18 degrees Celsius whilst temperature plunges to a record 45 degrees Celsius in some northern parts of the country. Rains are severe in the forest region and lighter in the humid parts of the country.

Ghana is the world`s third largest exporter or cocoas after Cote Devoir and Indonesia (source http//top5ofanything.com/index.php?h=c60de433). Over 60 % or its inhabitants practice agriculture as a source of livelihood of which most practices are peasant farming. Most farming activities are intended to feed individual household, this explains why there are more importation of agricultural products which in turn has affected the country`s balance of trade.

Cheap labor coupled with a rising level of literacy amongst people aged 18-45 is slowly placing the Ghanaian economy on the world radar. The recent discovery of oil in 2010, and an increasing mining of natural resources including gold, diamond, bauxite, manganese, to mention but a few is steadily raising the per capita income of the country. Ghana is a commonwealth country which was colonized by Britain. It speaks English as an official language and practices common law in the society.

Ghana has experienced periods of political instability in the past and has afterwards enjoyed democracy with a successive 5th republic government. Ghana has seen an increased advancement in technology over the past decade with introduction of more computer based education. The fifth (5th) republic government has introduced educational subsidies aimed at educating and promoting entrepreneurship, local enterprise expansion amongst other things. This offers individuals and cooperate bodies an opportunity to improve on their system of farming, capital or access to finance as entrepreneurs. Lastly the benefit of government programs of tax reliefs accompanied with various benefits. The intention of such programs is to encourage individuals or companies to invest in the country. A more liberalized government has privatized some governmental institutions with a purpose of creating a more competitive environment in the country.