The Effect of ICT-Based Market Information Services on the Performance of Agricultural Markets: Experiences from Ghana

The Effect of ICT-Based Market Information Services on the Performance of Agricultural Markets: Experiences from Ghana

Irene S. Egyir (University of Ghana, Legon, Ghana), Ramatu M. Al-Hassan (University of Ghana, Legon, Ghana) and James K. Abakah (University of Ghana, Legon, Ghana)
Copyright: © 2013 |Pages: 13
DOI: 10.4018/978-1-4666-3607-1.ch005
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Abstract

This study is concerned with how markets of agricultural commodities have responded to the improved ICT-based market information services in Ghana since 2005. The data employed are monthly prices wholesale from 2001-2010, covering four markets in the Northern and Greater Accra regions. The data was used to estimate a threshold autoregressive model to measure the level of spatial price integration between the four markets, and focusing on maize. In addition, data on market structure and conduct was collected from 486 marketers to explain performance indicators. The study finds that, the speed of price transmission in maize markets increased by 6 percent after 2005, however there has not been marked reduction in transactions costs. Despite increased use of the mobile phone, market-based exchanges still rely heavily on visual inspection. The implication is that more should be done to improve transport infrastructure and to ensure enforcement of standardization rules.
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1. Introduction

In the last decade, policies of food and agriculture and information communication technology (ICT) in developing economies have recognized the central role of market information. Without market information markets do not function well. Small traders in particular suffer opportunistic behaviour by other service providers in the market. Market-based exchanges that rely on visual inspection result in high transaction costs which impede access to better paying markets and entrenched poverty (Fafchamps & Hill, 2005; Fafchamps & Gabre-Madhin, 2006). In Ghana, the government has demonstrated its concern for the development of market information through the agricultural and ICT policies (Ghana, 2003, p. 24). There has been marked improvement in the ICT industry; the infrastructure, network coverage and user charges have improved tremendously in the last five years (Table 1). The sector is completely liberalized, resulting in improved penetration and broad band width supply. The national optic fiber bone infrastructure is critical in enabling rural areas to access the cheaper and faster undersea cable bandwidth.

Table 1.
Characteristics of Ghana’s ICT industry in 2010
ElementGhanaKenyaNigeriaSouth Africa
Governmental AgencyNational Communications authority
Number of Telecom Service Providers54
Number of Internet Service Providers100
% Mobile Penetration745141100
Ghana's Broadband Bandwidth SupplySTM-16 nationwide

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