Ghana’s cocoa sector is facing severe challenges, with substantial debt and a nearly 50% decline in production over three years. Finance Minister Dr. Cassiel Ato Forson highlighted these issues during the 2025 Budget presentation, noting significant financial losses and the need for urgent reforms to ensure the sector’s sustainability amid current market disparities and operational mismanagement.
On March 11, 2023, Ghana’s Finance Minister, Dr. Cassiel Ato Forson, presented the 2025 Budget and Economic Policy to Parliament, under the theme “Resetting Ghana for the economy we want.” He emphasized critical fiscal risks in Ghana’s cocoa sector, revealing that COCOBOD, the country’s cocoa board, has debts totaling 32 billion Cedis.
Dr. Forson articulated the cocoa sector’s distress, noting that it is in a precarious situation due to mismanagement, which has hindered its ability to support the economy effectively despite elevated global market prices. He reported a nearly 50% decline in cocoa production over the past three years, with COCOBOD failing to fulfill its contractual commitments for the 2023/2024 season, leading to a shortfall of 330,000 tonnes.
As a result of these under-supplied contracts, locked in at lower prices compared to current market rates, COCOBOD has faced revenue losses of approximately USD 840 million, negatively impacting Ghanaian farmers. The Finance Minister highlighted various financial difficulties, including unsustainable debt levels and quasi-fiscal expenditures concerning cocoa roads, which do not fall under core operational functions.
Further elaborating on COCOBOD’s financial strain, he noted that 11.92 billion Cedis of its total debt is due for payment in 2025. In 2024, cocoa road contracts are projected at 21 billion Cedis (USD 1.3 billion), yet only 4.4 billion Cedis is documented in COCOBOD’s financial statements.
The dire situation in Ghana’s cocoa sector calls for urgent reforms to mitigate fiscal risks and enhance the sector’s viability. The significant decline in production, the burden of debt, and mounting operational challenges necessitate a strategic approach to restore the cocoa industry’s critical role in Ghana’s economy. Immediate corrective measures will be pivotal in reviving this cornerstone of the agricultural sector.
Original Source: www.gbcghanaonline.com
