Why doesn’t Ghana have sovereign wealth fund for cocoa? – Consultant asks

A consultant has questioned why Ghana doesn’t have a sovereign wealth fund for cocoa, the export product the country is the second largest producer of?

David Ofosu-Dorte, who is a legal practitioner and economic consultant, has therefore urged Ghana to consider creating many sovereign wealth funds from its pool of resources to provide the needed buffers against economic shocks that can lead to disruptions.

He observed that though uncapping of the statutory funds was not a bad policy, it could be better managed to ensure that excess funds are redirected towards building economic buffers for emergencies.

He questioned why Ghana did not have a sovereign wealth fund for cocoa, a commodity the country is a second highest global producer of.

“If we had a sovereign wealth fund for cocoa, then we would realise that we could have tapped in the fund either to add value or withstand some of the shocks that occur as a producer price pressures or fluctuations in the world price of cocoa,” he said.

During a Joy Business forum, on the topic, “Ghana at Risks: the economic fallout of distant conflicts,” Mr Ofosu-Dorte said the long- term nature of creating buffers demanded caution against prioritising short-term policies over long-term goals of building a resilient nation.

A sovereign wealth fund is a state-owned investment fund that governments use to invest surplus revenues and other financial reserves.

Countries establish these funds to stabilise their economies, grow national wealth, and generate long-term financial returns.

These returns create a critical aspect of the country’s ability to withstand economic shocks either man-made or natural.

Those attitudes, Mr Ofosu-Dorte said, included prioritising election spending over achieving economic targets, prioritising party objectives over longterm national policies and discontinuation of economic policies of previous political office holders.

“If every topic is a matter of NDC versus NPP, then we lose the effect of what it is that we can do as a nation. There are some policies we should be able to unite around and that will determine how much fuel we keep in our reserve or how much money we keep in our buffer,” he said.

Professor Godfred Bokpin, an economist, advised governments to consider economic disruptions as the “new normal” and factor it into the planning of economic policies.

He observed that since 2012, the country had undergone series of shocks that affected how it performed economically, adding: “If you look at our growth pattern, it has been quite erratic.”

These shocks he mentioned included the energy crisis, financial sector clean up, covid-19 pandemic, Russia-Ukraine war and the Iran-Israel war, respectively.

Source: GNA

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