Cocoa Production in Ghana Declines by 50% Amid Financial Challenges

Cocoa production in Ghana has fallen by nearly 50% over three years, as stated by the Finance Minister. The Ghana Cocoa Board is struggling with debts and rolled-over contracts, resulting in significant financial losses. The government aims to address these challenges through economic initiatives and policy reforms.

Cocoa production in Ghana has experienced a significant decline, dropping by nearly 50 percent over the past three years, as reported by Dr. Cassiel Ato Forson, the Minister of Finance. During the presentation of the 2025 Budget and Economic Policy Statement in Parliament, he stated that cocoa, which was once a cornerstone of the nation’s economy, is now struggling to provide the necessary support despite the increase in global market prices.

Dr. Forson highlighted the challenges faced by the Ghana Cocoa Board (COCOBOD), which could not supply 330,000 tonnes of cocoa for the 2023/2024 crop season, leading to the rollover of some supply contracts to 2025. He noted the serious decline in the sector’s viability, attributing it to poor management over the recent years. Moreover, he stressed that the rollover of contracts is projected to inflict additional losses of $495 million in revenue in 2025.

For each tonne of cocoa delivered under these contracts, COCOBOD and local farmers stand to lose $4,000 in revenue. Additionally, Dr. Forson reported that COCOBOD’s outstanding debt had surged to GH¢32 billion, with GH¢11.92 billion due in 2025. Outstanding cocoa road contracts have reached GH¢21 billion, where only GH¢4.4 billion has been accounted for in financial statements.

Furthermore, low prices locked in from forward sales contracts have resulted in $840 million in revenue losses, exacerbating hardship for many farmers. There are also significant concerns regarding market price differentials which lead to smuggling, posing threats to the long-term sustainability of the cocoa sector.

Despite these issues, Dr. Forson assured that the government is dedicated to addressing the challenges within the cocoa sector. He confirmed plans to implement the 24-Hour Economy policy to stimulate economic growth and job creation, with further details to be presented in Parliament soon.

In summary, Ghana’s cocoa industry faces a critical downturn with a drastic production decline and substantial financial losses. The Minister of Finance emphasized the severe impact of poor management and highlighted significant debts within COCOBOD. The government is, however, committed to reforming the sector and introducing policies aimed at revitalizing the economy, demonstrating a proactive approach to overcoming these challenges.

Original Source: www.ghanabusinessnews.com