The World Bank, as part of its mandate to restore economic stability in Ghana, has urged government to take a second look at the cocoa sector and restructure its administrative system.
Ghana’s cocoa sector is facing significant challenges, with production for the 2023/24 season dropping to its lowest level since 2016.
The Ghana Cocoa Board (COCOBOD), which oversees the industry, continues to grapple with financial instability despite posting a profit of GH¢2.3 billion for the 2022/23 season.
According to the World Bank, COCOBOD’s financial troubles are from high operational costs and expensive programs such as fertilizer subsidies, cocoa road projects, and farmer support initiatives. These expenditures have led to mounting debts, putting further pressure on the sector’s sustainability.
To address these challenges, the World Bank recommended the reductions of expenditures, eliminating inefficiencies and streamlining operations.
The bank said producer prices must be reviewed to ensure a more sustainable pricing model for farmers while maintaining financial stability.
However, the World Bank cautions that financial restructuring alone is not enough but a comprehensive governance overhaul is required to ensure long-term sustainability which includes transparency, accountability, and improved management practices within COCOBOD.
Delving deeper into the sector, the entire cocoa industry is facing many challenges, from climate change, aging cocoa farms, illegal mining (galamsey), and smuggling.
Additionally, farmers are dealing with erratic rainfall, rising temperatures, and declining soil fertility.
Global cocoa prices have surged in recent months due to supply disruptions from major producers like Ghana and Ivory Coast. However, Ghanaian farmers continue to struggle with low farm-gate prices and increasing production costs, leading many to explore alternative livelihoods.
In the view of experts, Ghana must invest in modernized farming techniques, climate-resilient cocoa varieties, and better farmer support programs to revive the sector.
It must strengthen traceability systems and sustainability initiatives to also enhance Ghana’s position in the global cocoa market.
As a major driver of foreign exchange revenue to the country, the cocoa industry must be prioritized and managed efficiently.
