Cocoa has been the backbone of the Ghanaian economy for more than a century. The produce is exported and processed overseas. But citizens are barred by law from processing cocoa from their farms, they are required to sell to the Licensed Buying Companies designated by law that in turn sell to the Ghana Cocoa Marketing Board (COCOBOD). If a farmer wants to process the beans, they’d have to buy back from the COCOBOD.
By the mid-1920s the colonialists invested in constructing rail lines which covered large areas of the country and some 80 per cent of cocoa exports were transported by rail during the period, making Ghana the leading exporter of cocoa in the world.
The COCOBOD Law
Meanwhile, there is a law that forbids citizens who grow and harvest cocoa to process the beans. The Ghana Cocoa Board Law 1984 (PNDC Law 81) makes it an offence, and if anyone did and they were found guilty, they’ll go to jail for 10 years.
The Law was primarily passed to empower the Ghana Cocoa Board (COCOBOD) as the sole state agency to manage the cocoa sector.
The law stipulates among other things the Board is to encourage the production of cocoa, coffee and sheanuts; (b) to undertake the cultivation of cocoa, coffee and shea nuts; (c) to initiate programmes aimed at controlling pests and diseases of cocoa, coffee and sheanuts; (d) to purchase, import, undertake and encourage the manufacture in Ghana of, and distribute and market inputs used in the production of cocoa, coffee and sheanuts; (e) to undertake, promote and encourage scientific research aimed at improving the quality and yield of cocoa, coffee, sheanuts and other tropical crops; (f) to regulate the marketing and export of cocoa, coffee and sheanuts; (g) to secure the most favourable arrangements for the purchase, inspection, grading, sealing and certification, export, and sale of cocoa, coffee, and sheanuts; (h) to purchase, market and export cocoa produced in Ghana which is graded under the Cocoa Industry (Regulation) (Consolidation) Decree, 1968 (N.L.C.D. 278) or any other enactment as suitable for export.
The Ghana cocoa story
A report in 2017 by the rating agency Moody’s stated that the prices of cocoa at a 10-year low was expected to put pressure on the economies of the two leading producers of cocoa in the world, Ghana and Côte d’Ivoire.
According to the report, in the 2015/2016 production year, Ivory Coast produced a total of 1.7 million metric tonnes of cocoa and Ghana produced some 840,000 tonnes.
The Ghana cocoa story has been a bitter-sweet one. Despite being at one point the largest exporter of cocoa in the world, the country has been overtaken by Cote d’Ivoire to second position.
Moody’s noted in that report that, while cocoa prices at a 10-year low was going to put pressure on the economies and fiscal position of Côte d’Ivoire and Ghana, both countries will be able to withstand short-term price fluctuations. The average cocoa prices at that time reflected a drop of around 30 per cent compared to mid-2016.
The Ghana cocoa story has been a bitter-sweet one. Despite being at one point the largest exporter of cocoa in the world, the country has been overtaken by Cote d’Ivoire to second position. And in recent years, cocoa production in Ghana has declined drastically.
In his Budget Statement to Parliament this year, the Minister of Finance, Dr Cassiel Ato Forson said Ghana’s cocoa production had dropped by nearly 50 per cent in the past three years.
“Cocoa, once the main stay of the economy, was now “unable” to support the economy despite increase in world market prices,” he said.
He added that the COCOBOD was unable to supply 330,000 tonnes of cocoa in the 2023/2024 crop season, and that some supply contracts had been rolled over to 2025.
During his vetting the Minister of Food and Agriculture, Eric Opoku, said the country’s cocoa production has plummeted to its lowest point in two decades, with production levels at a low 530,000 metric tonnes.
Mr Opoku cited recent reports from the COCOBOD), indicating that regardless of whether the figure was 430,000 or 530,000 metric tonnes, both numbers reflected a worrying decline.
“… Mr Chairman, just recently during the transition engagement, COCOBOD submitted a list to us. In that document, they indicated that their production was 530 metric tonnes… But production has declined and that is the lowest in the last two decades,” he told the Vetting Committee.
He explained further that the decline in production had had severe financial consequences, particularly regarding Ghana’s cocoa loan commitments.
When the Ghana Statistical Service (GSS) released its 2024 trade data, it showed that three key commodities accounted for a significant portion of the country’s export earnings, and cocoa was one of them, but not the leading export anymore.
According to Mr Opoku, a syndicated loan of $800 million was taken to purchase an alleged 850,000 tonnes of cocoa. However, he said, Ghana was unable to meet the target by the end of the season, leading to a default on the loan.
“On the issues of default, Ghana went to the syndicated market and took a loan of $800 million to purchase 850,000 tonnes of cocoa. At the end of the season, we were unable to produce 850,000 tonnes. We defaulted on the loans,” he said.
When the Ghana Statistical Service (GSS) released its 2024 trade data, it showed that three key commodities accounted for a significant portion of the country’s export earnings, and cocoa was one of them, but not the leading export anymore.
The GSS stated that gold, mineral fuels and oils, cocoa beans and products collectively made-up 83.4 per cent of all exports, demonstrating their continued importance to Ghana’s economy.
The report noted that gold exports reached GH¢163.0 billion. Mineral fuels and oils brought in GH¢54.2 billion, while cocoa beans and products contributed GH¢28.6 billion to the country. A clear indication that cocoa has ceased to be the leading foreign exchange earner for Ghana.
In addition to decline in production, the cocoa sector has also been plagued by smuggling.
The global chocolate industry is $100 billion
According to the Moody’s report, although Africa produces close to 74 per cent of global cocoa, the continent accounts for only around 20 per cent of the grinding process. It has also been stated elsewhere that, while the global chocolate industry is worth $100 billion a year, only 2 per cent gets to Africa. That market share is reported elsewhere to have increased because Cote d’Ivoire entered the cocoa value chain by processing its cocoa.
The Moody’s report also said unlike manufacturers and traders that are concentrated in a small number of companies and enjoy higher bargaining power, cocoa farmers receive a very small share (6-7 per cent) of the value distribution in the supply chain.
The cocoa value chain
The argument has been made that for Ghana to make more from its cocoa, the country ought to add value to the produce. Compelling arguments have been made for Ghana to develop its cocoa value chain.
Research was done in 2006 for a pilot project in Ghana on cocoa by-products.
The research conducted by the Cocoa Research Institute of Ghana (CRIG) from 1970 to 1983 demonstrated that the wastes from the processing of cocoa pods and cocoa beans could be processed into commercially useful by-products.
For example, animal feed and potash can be produced from cocoa pod husks. Alcohol, pectin, jelly, soft drinks, wine, and vinegar can be produced from sweatings or bean pulp juice, while cocoa butter soap and cosmetics can be produced from sub-standard beans.
Based on these findings, an ICCO/CFC/CRIG project on “Pilot Plants to Process Cocoa By-products in Ghana” was implemented from September 1993 to July 2003 to carry out pilot-scale production and commercialization of the above mentioned by-products. It is however unclear, if this project was continued.
At a workshop organised in February 2025 by the Economic Commission for Africa (ECA) and partners, the need to developof cross-border/Regional Agricultural Value Chains (RAVCs) was discussed.
Participants at the workshop in Accra, stated that the RAVCs is regarded as essential for an effective implementation of the African Continental Free Trade Area (AfCFTA) agreement by Africa Union (AU) member countries.
They argued that the development of regional or cross-border AVCs forms part of the measures that are being championed under AfCFTA, towards the achievement of full regional integration.
More specifically, the organisers said, the development of RAVCs or cross-border AVCs will enhance intra-Africa trade by making it possible for African countries to reach efficiency gains in production, but also to encourage the private sector businesses or establishments to get integrated into the global value chains.
Other anticipated benefits to participating actors or operators participating in the cross-border (or internationalization of) agricultural value chains include the capture of an important share of the value-added along the chain system and positive spill-overs such as skills and technologies transfers, as well as job creation opportunities and wage increases in participating countries.
Additional benefits include enhanced trade and increased exports earnings through value additions to products, among participating countries, improved food security, development of local agro-industries, and significant efficiency gains in the region, they said.
By Emmanuel K Dogbevi
Copyright ©2025 by Creative Imaginations Publicity
All rights reserved. This article or any portion thereof may not be reproduced or used in any manner whatsoever without the express written permission of the publisher except for the use of brief quotations in reviews.
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