A fertilizer subsidy program can boost economic growth and employment in Ghana
Ghana’s agricultural sector has performed sluggishly in recent years, raising serious concerns about sustainability. In 2017, the Government of Ghana introduced the Planting for Food and Jobs (PFJ) program to encourage farmers to adopt new technologies. Over half the PFJ budget provides a 50% price subsidy for fertilizer, despite there not being a consensus on the impact of such schemes. A team of local PEP researchers found that the fertilizer subsidy program helps increase crop productivity, annual production, GDP, exports and household welfare in Ghana. It is also linked to reduced unemployment and enables food industry production to meet domestic demand. However, a mechanism is needed to wean beneficiaries off the program to allow new beneficiaries to enrol.
Find out more in the PEP working paper 2020-05 and policy brief 205