Ghana’s cocoa sector recorded a 26.0% year-on-year contraction in the third quarter of 2024, mirroring the 26.2% decline observed in the second quarter in its revenue, according to data from the Ghana Statistical Service.
This marks the fifth consecutive quarter of contraction in the sector. In contrast to 2013 prices, the real GDP for cocoa stood at 466.2 in Q3, compared to 236.3 in Q2, showing limited recovery even during the harvest season.
Seasonally adjusted data shows the sector contracted by 5.8% quarter-on-quarter in Q3, a steeper decline than the 2.9% contraction recorded in Q2. The inability to capitalize on seasonal gains during the peak harvest period indicates significant challenges within the sector.
Unfavorable weather conditions, including irregular rainfall and prolonged droughts, have negatively affected cocoa production. In several regions, drought-stricken farms have reduced yields, while heavy rains in other areas have caused soil erosion, further diminishing productivity. The cocoa swollen shoot virus continues to spread across farming regions, weakening trees and reducing output despite ongoing efforts by the Ghana Cocoa Board (COCOBOD) to combat the disease.
Illegal mining, commonly referred to as galamsey, has severely impacted cocoa farming areas. Cocoa farms have been converted into mining fields, with degraded soil and polluted water sources making these lands unsuitable for agriculture.
The smuggling of cocoa beans to neighboring countries has also emerged as a critical issue. Ghana lost an estimated 160,000 tons of cocoa to smuggling during the 2023/24 crop season. Farmers, seeking higher prices offered in neighboring countries, have resorted to illegal trade, which has reduced Ghana’s official export volumes and affected the financial stability of COCOBOD.
Farmers are also facing rising input costs, particularly for fertilizers and pesticides, which have become increasingly unaffordable. Access to credit remains limited, constraining farmers’ ability to reinvest in their farms and improve productivity.
The contraction in the cocoa sector carries significant economic implications. Cocoa contributes substantially to Ghana’s foreign exchange earnings, and its declining performance has the potential to widen the trade deficit and reduce foreign reserves.
