Ghana risks losing its major foreign exchange earner Cocoa, due to a combination of factors such as illegal mining, accumulated losses, and major developments by some advanced countries to aggressively grow and export the crop.

“The Ghana Cocoa Board had accumulated annual losses for many years… high rollover cost of outstanding cocoa bills, high purchase price to cocoa producers compared to its operational costs, and elevated quasi-fiscal operations… have also been a burden on the board's administrative expenses,” stated the International Monetary Fund (IMF) in its report on Ghana's extended credit facility program.

“COCOBOD in January this year defaulted on payments for maturities of its 182-day bill, rolling over outstanding securities with face value of GH¢ 940.42 million,” the IMF report further revealed.

The sector has also not been spared the harsh realities of illegal miners whose activities have affected cocoa production.

“In February this year, the Graphic Online reported that National Cocoa Rehabilitation Programme… faces threats from illegal miners who have taken over cocoa farms across the country, including farms which were recently rehabilitated,” highlighted the report.

“Foreign nationals have also taken advantage of the lapsed security issues at the district levels to perpetuate huge devastation of cocoa farms in favor of mining gold. Government efforts at fighting these menace have so far proved futile,” it further emphasized.

These challenges, coupled with some non-producing countries in Europe and Asia venturing into the production and export of cocoa poses a huge risk to the country's cocoa sector.

“Ghana earns over $ 3 billion in forex alone for the raw exports of the cocoa beans. Ghana's cocoa commands a premium on the international market,” the report emphasized the significance of cocoa for Ghana's economy.

The decision of the top two cocoa-producing countries, Ghana and Cote d'Ivoire, to institute some aggressive measures aimed at safeguarding its cocoa industry appears not to sit well with global players, some of whom are now exploring the possibility of producing their own cocoa beans.

“In 2018, Ghana and Cote d'Ivoire agreed to set a floor price for cocoa on the global commodity market, below which none of the two countries would sell its produce. Another key action point was the adoption of a concurrent opening season and announcement of producer prices to be paid to farmers in the two countries,” the report highlighted.

“In addition to this, the two countries, in 2019, also introduced the Living Income Differential (LID), which set a standard of $400 per tonne and charged on top of world prices… to guarantee cocoa farmers a minimum price that would improve the income of farmers, many of whom live in poverty,” it further explained.

However, the resistance from multinational chocolate companies and traders led to tensions and boycotts of meetings in Brussels for the World Cocoa Foundation on cocoa sustainability.

“Although China currently does not appear in the 45 top cocoa-producing countries in the world, many experts opined that its full entry into the cocoa export space was a potential threat to the fortunes of the two biggest cocoa-producing countries, Cote d'Ivoire and Ghana,” the report stated.

“We are concerned, but it is too early for anyone to start panicking because if you look at the quantity of cocoa that has been exported by China, it is quite small and less than one tonne… We are concerned due to the fact that if production is increasing at a time when consumption in the world is not increasing, then obviously it will have an effect on the price,” commented the Senior Public Relations Officer (PRO) of COCOBOD, Mr. Fiifi Boafo.