Ghana is the second-largest cocoa producer in the world after Côte d’Ivoire, accounting for a global market share of 20%. The crop, which grows primarily in the Ashanti, Brong-Ahafo, Eastern, Western, Western North and Western South regions, is cultivated by families, communities and cooperatives. The cocoa grown in Ghana is mostly processed for export, as the local market for finished cocoa products is relatively limited. Nestlé Ghana, Cargill and Unilever Ghana are the primary suppliers of cocoa products to the domestic market.
Production
The Ghana Cocoa Board ( COCOBOD) oversees and regulates the cocoa segment, establishing the domestic price for buying cocoa beans and the length of the purchasing season. The segment contributes substantially to the Ghanaian economy, bringing in an estimated $2.3bn in export revenue in 2022. That same year cocoa beans were Ghana’s third-most exported product.
COCOBOD purchases cocoa from farmers in Ghanaian cedis and sells it in US dollars, and it uses cocoa contracts as collateral to receive inexpensive US dollar-denominated loans. In the preceding three decades COCOBOD has secured over $25bn in this way, which the Bank of Ghana uses to help maintain a foreign currency reserve and mitigate depreciation of the local currency (see Economy chapter).
In September 2023 Ghana raised the government-guaranteed price per tonne of cocoa from GHS12,800 ($1160) in the 2022/23 season to more than GHS20,900 ($1900) per tonne for the 2023/24 season. The decision was seen as a response to farmers bringing their cocoa crop to neighbouring countries to sell for higher prices during the 2022/23 season because of the weaker local currency and the lower farmgate prices paid in Ghana, which forced the government to end the 2022/23 season a month early, according to Reuters. The International Cocoa Organisation (ICO) noted in its September 2023 market report that Ghana’s cocoa season had opened a month earlier than usual, due in part to local farmers hoarding beans in anticipation of higher farmgate prices.
COCOBOD targets an output of 820,000 tonnes of cocoa for the 2023/24 season, and the higher prices offered in Ghana are expected to offset the estimated 150,000 tonnes that were either brought to neighbouring countries for sale or damaged by small-scale gold-mining operations during the previous season. According to the ICO, the average price in September 2023 was $3739 per tonne, nearly double the September 2022 figure of $2083 per tonne.
Infrastructure
In June 2022 Nestlé Ghana announced that it would expand its infant cereals plant in the city of Tema on the Bay of Benin, making the factory the primary centre for producing and distributing infant cereals in Ghana and 24 other countries in Central and West Africa. The expansion, which is set to cost GHS175.4m ($15.9m), will increase the production capacity of Nestlé Ghana’s Cerelac infant cereal by 6700 tonnes once completed in 2024. In November 2021 US agricultural giant Cargill completed a $13m expansion of its cocoa-processing facility in Tema, increasing the company’s cocoa-grinding capacity from 75,000 tonnes annually to 90,000 tonnes.
The government has also implemented several initiatives to support the domestic cocoa industry, including the Cocoa Farmer Pension Scheme that was rolled out in October 2022. COCOBOD’s productivity-enhancement programmes are also expected to increase cocoa yields to more than 1m tonnes annually by improving plant health and fertility, developing irrigation systems, and rehabilitating ageing and diseased crops. Increased yields should in turn boost the volume and quality of local processing, presenting an opportunity for enhanced value addition for players in the domestic industry.
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