The International Monetary Fund (IMF) has identified 2024 as a challenging financial year for Ghana’s cocoa industry, primarily due to the Ghana Cocoa Board’s (COCOBOD) inability to capitalize on record-high global cocoa prices.
According to the IMF, weak production levels during the 2023/2024 cocoa season severely hindered COCOBOD’s capacity to meet its obligations under forward sales contracts, further exacerbating the sector’s struggles.
Sharp decline in cocoa output
The Ghana Statistical Service’s latest data paints a bleak picture of the cocoa industry’s health, revealing a dramatic 26% decline in output for the third quarter of 2024.
This marks the fifth consecutive quarter of contraction, signaling persistent challenges in the sector.
Forward sales arrangements hamper revenue potential
The IMF report noted that Ghana failed to fully reap the benefits of soaring international cocoa prices, largely due to forward sales agreements.
These contracts, which lock in prices ahead of harvests, prevented COCOBOD from taking advantage of the market’s record highs.
Govt takes measures to revive cocoa industry
In an effort to combat the crisis, the government increased the farmgate price of cocoa by 50% for the 2024/2025 cocoa season. This move aims to reduce smuggling and discourage the conversion of cocoa farmlands into illegal mining sites, a growing concern in rural communities.
New initiatives for sector stabilization
The IMF acknowledged the government’s proactive measures to stabilize the cocoa sector, including the establishment of a dedicated cocoa desk at the Ministry of Finance.
This initiative forms part of a broader strategy to restore COCOBOD’s financial sustainability and address the long-standing challenges facing Ghana’s cocoa industry.
Outlook for 2025 and beyond
While the government’s interventions show promise, experts caution that reversing the sector’s fortunes will require sustained efforts and robust policy implementation.
As Ghana continues to grapple with declining output and financial strain, the success of these initiatives will be critical in shaping the future of the country’s cocoa industry.
