By Alex Ababio
Ghana’s cocoa sector — long regarded as the backbone of the rural economy and a pillar of foreign exchange earnings — is once again at the centre of a fierce political and economic debate. What began as a policy announcement by Finance Minister Dr Cassiel Ato Forson has escalated into a broader confrontation over governance, debt, farmer welfare, and currency policy.
At a press briefing following the government’s announcement of new reforms to restructure the cocoa sector, the Member of Parliament for Karaga, Dr Mohammed Amin Adam, launched a blistering critique of the National Democratic Congress (NDC) administration.
“We were told that the Minister for Finance was coming to announce what they call a restructuring of the cocoa sector. We are very surprised that the minister rather used the opportunity to shortchange cocoa farmers,” Dr Amin Adam said.
The remarks reflect growing tension over how to stabilise the Ghana Cocoa Board (COCOBOD), which is grappling with rising debt, declining output, smuggling, and volatile global prices.
A Sector Under Strain
Ghana is the world’s second-largest cocoa producer after Côte d’Ivoire. Cocoa accounts for roughly 15–20 percent of Ghana’s export earnings and directly supports more than 800,000 farm families. Yet production has fallen sharply in recent seasons due to climate variability, swollen shoot disease, illegal mining (galamsey), ageing farms, and financial constraints.
Industry data and public documents indicate that Ghana’s cocoa output dropped significantly over the past two seasons, reaching one of its lowest levels in over a decade. COCOBOD’s mounting debt — estimated in the billions of cedis — has further constrained its ability to pre-finance purchases, rehabilitate farms, and sustain mass spraying and fertiliser programmes.
Against this backdrop, the government announced what it describes as a restructuring effort aimed at restoring financial sustainability.
The Turnaround Strategy Dispute
Dr Amin Adam, who previously served as Finance Minister under the New Patriotic Party (NPP) administration, insists that the current crisis stems not from structural inevitability but from policy abandonment.
“Before we left government, we introduced a turnaround strategy for COCOBOD and we worked on this with the IMF. This strategy was intended to comprehensively restructure COCOBOD,” he stated.
“What is happening today in the cocoa sector is not surprising to us because this government has failed to implement the COCOBOD turnaround strategy. That is why COCOBOD is facing these challenges,” he argued.
According to Dr Amin Adam, the earlier strategy — developed in consultation with the International Monetary Fund under Ghana’s ongoing Extended Credit Facility programme — included cost rationalisation, procurement reforms, and clearer pricing mechanisms.
Public IMF programme documents confirm that reforms in the cocoa sector were identified as part of broader fiscal consolidation and state-owned enterprise restructuring benchmarks. However, implementation timelines and political transitions appear to have slowed progress.
Dr Amin Adam contends that some measures now being presented as fresh reforms were already embedded in the previous plan.
“I heard that the minister is directing the move of the cost of cocoa roads to the Ministry of Roads. This measure was in the strategy, the turnaround strategy that we handed over to them. It took them one year. They have not implemented it,” he said.
Roads, Pricing, and Non-Core Businesses
Cocoa roads — feeder roads built to ease the evacuation of cocoa from farms to buying centres — have long been funded through COCOBOD’s budget. Analysts say shifting that responsibility to the Ministry of Roads could ease pressure on the cocoa balance sheet.
But Dr Amin Adam insists that such proposals are not novel.
“They were also supposed to legislate a transparent pricing policy for cocoa. They have not done that. They were to remove some cost items which tend to reduce the producer price of cocoa, which we thought were unnecessary and, in some cases, duplicative. They have not done that,” he stated.
He further accused the government of failing to narrow COCOBOD’s operational focus.
“They were supposed to get COCOBOD to move away from non-core businesses and to improve efficiency and reduce cost, particularly in procurement. They have not done that,” he said.
Public financial statements from COCOBOD show rising administrative and financing costs over recent years, partly driven by syndicated loans and domestic borrowing used to finance cocoa purchases.
Independent agricultural economists argue that deeper structural reform may indeed be required, including improved yield per hectare, disease-resistant seedlings, and digital traceability systems demanded by European Union deforestation regulations.
The Producer Price Controversy
At the heart of the dispute is the producer price — the amount paid to farmers per tonne of cocoa beans.
“Given the scale of the crisis in the sector now, one expected the government to give COCOBOD a bailout as we did during the MPP time rather than reducing the producer price for cocoa. A bailout would have been necessary,” Dr Amin Adam said.
He questioned the government’s claims of superior economic management. “They said they are better managers of the economy. An economy that is better managed cannot pay cocoa farmers? An economy that is better managed reduces the producer price of cocoa?” he asked.
Farmer groups in the Ashanti, Western North and Bono regions have expressed concern about input costs, fertiliser access, and delayed payments. However, government officials argue that global price volatility and lower forward sales volumes have constrained fiscal space.
Public data from international commodity exchanges show that global cocoa prices have surged to historic highs due to supply shortfalls in West Africa. Yet Ghana’s forward sales arrangements — where beans are sold in advance — mean farmers do not always immediately benefit from spot price spikes.
Currency Politics and Export Competitiveness
Another flashpoint is the performance of the Ghana cedi.
Dr Amin Adam blamed what he described as the “reckless overvaluation” of the currency for weakening Ghana’s export competitiveness.
“We warned this government about the reckless overvaluation of our currency,” he said. “When you overvalue your currency, it adversely affects the export competitiveness of your country.”
He argued that the appreciation of the cedi had made Ghana’s cocoa more expensive internationally, leading to a drop in demand.
“Ghana’s cocoa is now considered more expensive. This has been confirmed by the CEO of COCOBOD. He has confirmed in an interview that Ghana’s cocoa is now more expensive and therefore consumers are turning away from Ghana’s cocoa,” he stated.
Dr Amin Adam explained that when inflation stands at 3.8 per cent, economic theory suggests that the currency should depreciate by at least the same margin to protect exports.
“When your inflation is 3.8 per cent, your currency should depreciate by at least 3.8 per cent in order to protect exports. What do we see? They are going around bragging about appreciation. That is poor economics,” he said.
Economists interviewed for this report note that exchange rate policy is complex. While a stronger cedi can reduce imported inflation and stabilise debt servicing costs, it may dampen export revenues in local currency terms. However, cocoa contracts are largely denominated in US dollars, and competitiveness depends not only on exchange rates but also on quality, reliability, and certification standards.
IMF Silence or Strategic Patience?
Perhaps most striking was Dr Amin Adam’s criticism of the IMF.
“We developed this strategy in consultation with the IMF as one of the requirements for implementing the IMF programme. I’m really surprised that the IMF has gone to sleep on this,” he said, adding that “this government is recklessly managing the cocoa sector, which has brought us to this unprecedented crisis.”
IMF country reports on Ghana acknowledge vulnerabilities in state-owned enterprises, including COCOBOD. However, the Fund typically refrains from direct operational directives, focusing instead on macro-fiscal stability.
A senior economist familiar with the programme, speaking on background, suggested that “the IMF sets broad reform targets, but implementation rests with the government. The cocoa sector challenges are structural and predate the current administration.”
Beyond Politics: Structural Realities
While political rhetoric dominates headlines, deeper structural issues persist.
• Climate shocks and erratic rainfall patterns linked to global warming are reducing yields.
• Cocoa swollen shoot virus disease continues to affect thousands of hectares.
• Illegal mining has degraded fertile cocoa lands.
• Ageing farmer demographics threaten long-term sustainability.
Industry reports indicate that average yields in Ghana remain below potential compared to improved hybrid varieties. Without large-scale rehabilitation and farm modernisation, production recovery may remain slow.
A Sector That Defines the Economy
For decades, cocoa has shaped Ghana’s economic identity. From colonial-era marketing boards to post-independence reforms, COCOBOD has played a stabilising role — but at the cost of heavy state involvement.
Today’s crisis reflects a convergence of debt, disease, climate stress, and global market volatility — layered atop partisan contestation.
Dr Amin Adam insists that the solution was already designed.
“As far as we are concerned, this NDC government did not need to announce any new strategy for restructuring COCOBOD. If they had implemented the strategy that we handed over to them, COCOBOD would not be in this mess,” he said.
“The cocoa sector has just exposed them. This government is recklessly undermining all these efforts, and it won’t be long before Ghanaians see the reality of this government,” he concluded.
Whether the reforms announced by Dr Cassiel Ato Forson will stabilise COCOBOD or deepen political fault lines remains uncertain. What is clear is that Ghana’s cocoa sector — once a symbol of resilience — now stands at a decisive crossroads.
For the hundreds of thousands of farmers whose livelihoods depend on it, the outcome will matter far beyond political press conferences.