Ghana’s cocoa sub-sector has experienced a 26% contraction in the third quarter of 2024, marking its fifth consecutive decline. This significant downturn contrasts sharply with the broader economy, which saw a notable 7.2% growth during the same period.
Excluding the impact of oil, Ghana’s economy grew to GH₵254 billion in current terms, up from GH₵194 billion in the same quarter of 2023.
The challenges facing the cocoa sector began in the third quarter of 2023 and worsened throughout 2024, with the first quarter seeing the worst contraction at 20.2%. Hopes for a rebound have been dampened by consecutive contractions of 26% in both the second and third quarters of 2024.
This prolonged slump raises significant concerns about the future of cocoa, one of Ghana’s most vital export commodities. Cocoa supports the rural economy and plays a crucial role in foreign exchange earnings.
Professor Lord Mensah, a Finance Lecturer at the University of Ghana Business School, expressed concern over the potential impact on the country’s foreign exchange reserves.
Speaking to Citi Business News, he called on the government to redirect focus towards stabilizing the cocoa sector.
“We have prioritized gold over cocoa. Even though both provide export earnings, cocoa gives us more liquidity. The cocoa sector has historically brought in significant inflows—about $1 billion to $2 billion annually—but we have missed out on these flows recently, and this has impacted our foreign exchange,” he explained.
Professor Mensah emphasized the need for strategic policies and investment in the sector.
“Cocoa is a liquid asset. You can borrow against unexported cocoa beans and repay once the exports are completed. It’s crucial to safeguard the sector, allocate resources effectively, and strengthen policies to ensure its performance,” he added.
The continued decline in the cocoa sub-sector demands policy interventions to protect this vital pillar of Ghana’s economy.
