The Ghanaian Cabinet is set to release a comprehensive plan to improve the Ghana Cocoa Board (COCOBOD) by the end of July 2024, according to the latest International Monetary Fund (IMF) report. The initiative aims to restore COCOBOD’s financial stability through enhanced financial oversight, a review of cocoa pricing to ensure fair profit distribution to farmers, cost-cutting measures, and the phasing out of funding for cocoa roads and fertilizer programs.
The IMF report noted that while COCOBOD’s financial situation improved in 2023, the current year presents new challenges. In response to a drop in cocoa production and a rise in spot market prices, COCOBOD raised the price paid to cocoa farmers by 58% in April 2024. This decision is aimed at preventing smuggling and supporting the cocoa market in Ghana. To manage cash flow, COCOBOD plans to increase sales at the higher prices and reduce additional spending.
The IMF praised the Ministry of Finance for creating a cocoa desk to regularly review COCOBOD’s financial status and has requested assistance from the IMF to develop better oversight of state-owned enterprises.
In February 2024, COCOBOD secured a $200 million loan from the World Bank to rebuild farms damaged by disease. The cocoa swollen shoot virus and other issues have reduced Ghana’s cocoa output from over 1 million tons in the 2020/21 season to 600,000 tons last year. The low volume resulted in a shortage of cocoa beans, forcing several cocoa processing companies to shut down and leading to a shortage of processed cocoa products such as chocolate, with unprecedented price hikes as a consequence.
The upcoming improvement plan is expected to address these challenges and lay the foundation for a more resilient and financially stable cocoa industry in Ghana.
