While cocoa farmers are taking a major hit from the cocoa price, the Chief Executive Officer of the Ghana Association of Banks (GAB), John Awuah, is full of praise for the government for taking such a bold decision.
This signals that the decision has triggered mixed reactions across Ghana, capturing the age-old truth that economic policy often looks different depending on where one stands.
For cocoa farmers, the price cut is direct and personal because about GHC 1000 has been slashed from the price of one bag of cocoa. This affects household incomes, school fees, farm investments, and the daily cost of living in cocoa-growing communities.
At a time when many farmers are already grappling with rising input costs and unpredictable weather patterns, a reduction in producer prices feels like yet another blow.
But the narrative is different across boardrooms and offices in Accra. A section of the public is wholeheartedly embracing the move for various reasons.
For the CEO of GAB, he sees the decision through a different lens. In a statement reacting to the move, he commended President John Dramani Mahama and Finance Minister Cassiel Ato Forson for what he described as a difficult but necessary step to protect the broader economy.
According to him, fiscal discipline requires leaders to make “unpalatable decisions” when circumstances demand. With international cocoa prices declining, maintaining higher producer prices locally could further strain the already troubled Ghana Cocoa Board (COCOBOD), deepen financial losses, and create ripple effects in the banking and fiscal system.
In essence, while farmers see a cut in income, the financial and banking executive sees a move to stabilise macroeconomic fundamentals. It can be described as a classic case of farmers’ pain versus economic safety.
COCOBOD’s financial challenges have been mounting, with heavy debts and high operational costs threatening its sustainability. As the Minister for Finance confesses, paying farmers above what global market conditions justify could widen deficits and increase borrowing. This is a burden that ultimately returns to taxpayers and the financial system.
This is why John Awuah believes that the government deserves commendation for taking the bull by the horns and swallowing the bitter pill in the interest of the general economy.
However, this macroeconomic reasoning does little to soften the impact on the farmer in Enchi, Sefwi, or Assin Fosu who measures policy not in fiscal ratios, but in how much cash reaches their hands after harvest.
“Maintaining fiscal discipline means taking some difficult, sometimes costly, decisions in the name of keeping the economy in good shape,” John Awuah remarked.
He continued, “On this note, I commend His Excellency, the President, and Hon Ato Forson for putting Ghana first in taking the difficult decision of reducing the producer price for cocoa in line with world market price movement.”
The CEO of GAB further cautioned that this situation underscores a deeper lesson to politicians to resist the temptation to politicise economics. When global price mechanisms are beyond domestic control, he argues, prudence demands realism. Windfalls must be saved; downturns must be managed.
“This tells me that when they have to take unpalatable decisions to keep Ghana going, they are prepared to put the country first. The lesson here is that politicians must learn not to politicise economics; when you do not have full control of the price mechanism that determines how much you can get for your produce, keep quiet and enjoy when you have a windfall and save some for difficult seasons,” he emphasized.
For him, given that farmers are bearing the immediate cost of global price swings, there is the urgent need for long-term reforms in the areas of productivity support, cost reduction, value addition and better savings buffers during boom years.
