Written by: Harvin Bhathal, Peak Associate
Ghana is the world’s second-largest producer of cocoa. During a state visit to Switzerland, one of Ghana’s most important trading partners, Ghana informed Switzerland they would no longer export cocoa to them. Instead, Ghana plans on expanding its domestic chocolate-exporting industry to further industrialize the country.
“There can be no future prosperity for the Ghanain people in the short, medium, or long term if we continue to maintain economic structures that are dependent on the production and export of raw materials,” President Nana Akufo-Addo stated.
“We intend to process more and more of our cocoa in our country with the aim of producing more chocolate ourselves.”
In an interview with the BBC, Alan Kyeremeatan, Ghana’s Trade and Industry Minister said, “It only makes sense that the most important commodity in our country [ . . . ] should become the target for a major programme of industrialization.”
The global chocolate industry is worth nearly $140 billion US — yet many Ghanaian cocoa farmers make less than $1 a day. As stakeholders, cocoa farmers generally only have a share of less than 7% of the global supply chain for chocolate.
General Secretary of Ghana’s Agricultural Workers Union (GAWU) added, “The government of Ghana must transform [the] cultivation of cocoa, its harvesting, and processing to generate more revenue from cocoa production.”
Former Swiss president Simonetta Sommatuga said, “It is obvious that Ghana is increasingly striving to process raw materials in addition to extraction of them; that way, more added value remains in the country, which is a very understandable desire.”
Sommaruga noted that “relations between Switzerland and Ghana have for decades been characterized by mutual respect.”
Switzerland’s two main objectives for Ghana are: “building strong and accountable institutions that deliver effective public services,” and “improving the competitiveness and diversification of the economy.” These objectives have the goal of making Ghana more noteworthy in the global chocolate industry.
In 2019, Ghana said they would process 50% of their cocoa crop locally in partnership with China, who established a $60 million processing facility. This was to “boost the country’s exports, improve value addition, and cocoa consumption locally.”
Ghana processes roughly 30% of its cocoa crop and plans to expand its growing domestic chocolate industry. However, this does not come without its structural challenges — which Akufo-Addo pledged to address.
In an interview with the BBC, Nana Aduna II, a Ghanaian cocoa farmer said, “The equipment to make chocolate is very expensive.” This includes refrigeration systems as chocolate melts easily due to Ghana’s tropical climate.
“Plus, we don’t have a local sugar industry and we don’t have a local dairy industry,” so these resources must be imported from elsewhere, driving up the cost of production.
In addition, high interest rates on bank loans are another obstacle for non-commercial chocolate producers, as it hinders business growth.
However, there are factors positioning Ghana to expand its chocolate-exporting industry.
Akufo-Adda plans for Ghana’s chocolate-exporting industry to be kickstarted through his One District One Factory programme that aims to provide the necessary infrastructure for agribusiness, including processing plants in some of the country’s more prominent cocoa-growing regions.
Ekow Dontoh, a commodities expert said, “It has become easier for the private sector to invest in food processing, [which] is a welcome move.” In addition, big tax rebates are available for processing companies that will set up in Ghana’s free zones, “designated areas to encourage economic activity.”
Currently, there are several domestic chocolate-exporting companies in Ghana, including artisanal companies such as ‘57 Chocolate and Golden Tree, as well as larger exporting companies such as Fairafric.
“We are determined in Ghana to ensure the succeeding generations of Ghanains do not become victims or pawns of the international economic order, but her beneficiaries,” Akufo-Addo said. He envisions “a Ghana which has discarded a mindset of dependency, aid, charity, and hand-downs — and is charting down a path of self-reliance.”