Ghana, the world’s second-largest cocoa producer, faces a paradoxical situation: despite its abundant cocoa production, local processors struggle to access the very beans that fuel the industry. This ironic predicament stems from a rigid and restrictive regulatory framework that hinders domestic value addition and stifles the growth of the local cocoa processing sector. Bright Simons, Vice President of IMANI Africa, has highlighted this critical issue, lamenting the difficulties faced by local processors in sourcing cocoa beans, even to the point of potential legal consequences for purchasing them directly from farmers or open markets. This, despite the nation’s stated goal of industrializing its cocoa sector.
The core of the problem lies in the country’s cocoa licensing regime, which grants exclusive purchasing power to a select group of state-approved entities. The Ghana Cocoa Board (Cocobod) exerts tight control over the entire cocoa value chain, particularly exports, creating a bottleneck that restricts access for local processors. This system effectively places domestic processors in direct competition with international buyers, often at a disadvantage. The result is a scenario where local businesses, despite being situated at the source of the raw material, find it incredibly difficult to acquire the very cocoa beans needed for their operations, forcing them to navigate a complex and often frustrating bureaucratic labyrinth.
The struggles of the Western Africa Mills Company (WAMCO), which ultimately collapsed in 2016 due to persistent cocoa supply challenges, serve as a stark example of the systemic issues plaguing the sector. Despite having the government as a shareholder, WAMCO could not secure a consistent supply of cocoa beans, highlighting the ineffectiveness of the current system in supporting even its own invested interests. This failure underscores the depth of the problem and the urgent need for reform to ensure the viability of local processing. The situation has not improved significantly since WAMCO’s demise, further demonstrating the entrenched nature of these challenges.
Local processors, despite possessing the capacity to process the entire national cocoa output, are currently limited to accessing only 40% of the total production. This artificial constraint on supply severely hampers their ability to operate efficiently and at full capacity. The promised allocation of specific cocoa grades, crucial for certain processing operations, often fails to materialize, forcing many processing plants to endure extended periods of shutdown. This unreliable supply chain disrupts production schedules, increases operational costs, and ultimately undermines the competitiveness of Ghanaian cocoa processors in the global market.
The irony deepens as some Ghanaian cocoa processors, unable to secure sufficient local supplies, have resorted to importing cocoa beans to maintain their operations. This counterintuitive practice highlights the absurdity of the situation: a cocoa-rich nation forced to import the very commodity it produces in abundance. Such a scenario not only undermines the potential for local value addition and job creation but also exposes the inefficiencies and contradictions inherent in the current regulatory framework.
The situation underscores the urgent need for a comprehensive overhaul of Ghana’s cocoa sector regulations. The current system, characterized by restrictive licensing and centralized control, stifles local processing and hinders the development of a vibrant domestic cocoa industry. Reform efforts must focus on creating a more equitable and accessible system that enables local processors to readily source cocoa beans, fostering value addition, creating jobs, and maximizing the economic benefits of Ghana’s position as a leading cocoa producer. This requires a shift away from the current restrictive model towards a more open and competitive market that empowers local businesses and promotes sustainable growth within the cocoa sector.
