Ghana’s cocoa sector is facing a rapid fiscal decline owing to what is being described as gross mismanagement in the last few years.
Known as the backbone of the Ghanaian economy, the sector is now unable to support the economy as it should, in spite of record-high world market prices, according to the Minister for Finance, Dr. Cassiel Ato Forson.
Recent reports on the sector reveal that progress has dropped significantly, with production declines nearing 50% over the past three years. According to the Finance Minister, the COCOBOD, the regulatory body for the sector has been unable to meet its full contractual obligations as a result.
In his 2025 budget presentation, the minister for finance disclosed that COCOBOD failed to meet its contractual supply demand of 330,000 tonnes of cocoa. Consequently, the under-supply has been rolled-over for subsequent supply by the new administration.
Already, a revenue loss of $840 million has been incurred. Additionally, servicing of this subsequent supply, according to the minister, will result in losses of $495 million this year.
“Mr. Speaker, cocoa production has dropped by nearly 50% over the past three years. In the 2023/2024 crop season, COCOBOD was unable to supply 330,000 tonnes of cocoa to meet its full contractual obligation. This under-supply has been rolled over for subsequent supply by the new administration.”
“Mr. Speaker, these 2023/2024 forward sales contracts locked-in at lower prices than current market rates, have resulted in revenue losses of US$840 million for both COCOBOD and impoverished the Ghanaian farmer.”
“Mr. Speaker, the rolled-over contracts will result in additional losses of US$495 million this year,” said the minister.
Each Ghanaian farmer is also projected to make a revenue loss of $4,000 for ever tonne of cocoa delivered as a result.
Meanwhile, despite the COCOBOD’s road contracts reaching 21 billion cedis (US$1.3 billion) in 2024, only 4.4 billion cedis has been accounted for in its financila statements.
The leadership of COCOBOD is under pressure to bring some semblance of growth into the sector in order for the country to sustain its position as the second largest producer of cocoa in the world.
Ghana’s recent decline in cocoa production has largely been attributed to smuggling and illegal mining. But some believe it is an issue of poor leadership. Accordind to experts, a well restructured leadership could turn the fortune around in the cocoa sector.
Source: Dehotpress
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