Ghana’s cocoa sub-sector suffered a 26% contraction in the third quarter of 2024, marking its fifth consecutive decline. This steep downturn contrasts sharply with the broader economy, which recorded an impressive 7.2% growth during the same period.
Excluding oil’s impact, Ghana’s economy expanded in current terms to GHȼ254 billion, up from GHȼ194 billion in the corresponding quarter of 2023. Despite the broader economic growth, the cocoa sector’s challenges, which began in the third quarter of 2023, have deepened significantly in 2024.
The first quarter of the year saw the sector’s worst contraction at 20.2%, followed by further declines of 26% in both the second and third quarters. This prolonged slump has raised concerns about the future of cocoa, one of Ghana’s most critical export commodities, which supports rural livelihoods and contributes significantly to foreign exchange earnings.
Finance Lecturer at the University of Ghana Business School, Professor Lord Mensah, expressed alarm over the continued decline and its implications for the country’s foreign exchange reserves. Speaking to Citi Business News, he noted, “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.”
Professor Mensah underscored the urgency of strategic investments and policies to stabilize 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 calls for immediate policy interventions to safeguard this vital pillar of Ghana’s economy. Without decisive action, the country risks losing a key source of foreign exchange and economic stability.
