Ghana Must Pivot to Cocoa Processing Amid Crisis, Says President Mahama

Accra, Ghana – In a pivotal address at the Ghana Tree Crops Investment Summit, President John Dramani Mahama has called for an urgent and strategic shift in the nation’s economic approach to cocoa. Asserting that the current turbulence in the global cocoa market presents a critical opportunity, he advocated for a decisive move away from the volatile export of raw beans towards robust local processing and value addition. This stance, he argued, is essential for building a resilient, green economy and securing the future of Ghana’s most iconic agricultural export.

Introduction: A Crisis Demanding a Strategic Pivot

The Ghanaian cocoa sector, a cornerstone of the national economy and a primary source of livelihood for millions, is navigating one of its most severe challenges in recent history. Facing a significant liquidity crunch and global market instability, the industry’s traditional model is under intense scrutiny. Against this backdrop, President Mahama’s message is clear: the current “disaster” must catalyze a fundamental rethinking. Speaking at the opening of the Ghana Tree Crops Investment Summit & Exhibition on February 17, 2025, at the Accra International Conference Centre (AICC), he framed the moment not as a defeat, but as a necessary catalyst for transformative change. His vision centers on harnessing Ghana’s agricultural potential through domestic processing to capture greater value, create jobs, and insulate the economy from the whims of international commodity prices.

Key Points: The Core of Mahama’s Argument

President Mahama’s address distilled into several crucial, interconnected points that outline a new economic roadmap for Ghana’s tree crops, with cocoa at the heart:

• Raw Material Export Vulnerability: Over-reliance on exporting unprocessed raw materials, like cocoa beans, exposes national economies to extreme price volatility and limits wealth creation.
• Crisis as Catalyst: The current industry downturn is not merely a problem to be solved but a profound lesson that must trigger a permanent strategic pivot towards domestic value addition.
• Policy with Empathy: Effective policy must be grounded in a deep understanding of the farmer’s reality. Mahama personally connected his policy stance to his identity as a cocoa farmer, underscoring the human impact of price fluctuations.
• Summit as a Launchpad: The four-day summit, themed “Sustainable Growth Through Tree Crop Investments: Resetting and Building Ghana’s Green Economy,” is the institutional platform to attract investment for this shift, focusing on six priority crops: cashew, shea, oil palm, coconut, rubber, and mango.
• From Farm to Factory: The goal is to build a comprehensive ecosystem where Ghana not only grows but also processes, manufactures, and exports higher-value finished and semi-finished goods.

Background: The Ghanaian Cocoa Sector at a Crossroads

The Pillar of the Economy

Ghana is the world’s second-largest producer of cocoa beans, after Côte d’Ivoire. The sector contributes significantly to foreign exchange earnings, government revenue, and rural employment, supporting over 800,000 farmers and their families. For decades, the model has been straightforward: produce high-quality beans and export them primarily to international chocolate and confectionery manufacturers in Europe and North America.

The Current Liquidity Crisis

The “disaster” to which Mahama refers is a confluence of factors:

• Global Price Volatility: Cocoa prices on international exchanges have been subject to wild swings due to concerns over supply deficits from West Africa, currency fluctuations, and speculative trading.
• Domestic Financial Strain: The Ghana Cocoa Board (COCOBOD), the state regulator responsible for purchasing, financing, and exporting cocoa, has faced mounting debts and payment delays to farmers. This liquidity crunch disrupts the entire supply chain, from farmer to exporter.
• Climate & Production Challenges: Climate change impacts, including erratic rainfall and diseases, threaten long-term yields, adding another layer of risk to the raw-commodity export model.

This crisis highlights the fundamental risk of being a price-taker in a global commodity market. When prices fall or costs rise, the entire national ecosystem suffers.

Analysis: Why Local Processing is the Logical Solution

President Mahama’s advocacy for local processing is an economic strategy with multiple, synergistic benefits that address the sector’s core vulnerabilities.

1. Capturing More Value: The Math of Processing

Exporting raw cocoa beans captures a small fraction of the final retail value of a chocolate bar. The vast majority of value is added during roasting, grinding, conching, and molding processes—stages that typically occur in consumer countries. By developing local capacity for these steps, Ghana can:

• Increase export revenue per ton of cocoa beans used.
• Create new industries (cocoa butter, cocoa liquor, powder, chocolate) and related supply chains (packaging, machinery, logistics).
• Stimulate demand for other local ingredients (sugar, milk, nuts, fruits) for blended products.

2. Economic Diversification and Resilience

A thriving processing sector diversifies the economy beyond simple commodity exports. It creates a buffer against global price shocks: if bean prices dip, a domestic manufacturer can still operate on margin by selling value-added products, which have more stable pricing. This diversification is a core tenet of building a sustainable green economy.

3. Job Creation and Rural Development

Processing is far more labor-intensive than bulk commodity shipping. Establishing processing plants near production zones (in the Ashanti, Brong-Ahafo, and Western regions) would create thousands of formal jobs in manufacturing, quality control, engineering, and management. This can stem rural-urban migration and stimulate local economic development.

4. Industrial Policy and Export Strategy Alignment

The push aligns with Ghana’s broader industrial policy goals, such as One District, One Factory (1D1F). Cocoa processing plants can be anchor projects under this initiative. Furthermore, it allows Ghana to negotiate from a position of greater strength in trade agreements, moving from exporting a raw material to exporting manufactured goods, often with better tariff terms.

5. The Tree Crops Holistic Approach

Mahama’s focus on six tree crops is strategic. It mitigates risk by not putting all eggs in the cocoa basket. For instance, developing a shea butter processing industry taps into the global cosmetics market, while cashew nut processing caters to the healthy snack trend. This portfolio approach makes the agricultural export sector more robust.

Practical Advice: Pathways to Implementation

For the vision of a processing-led cocoa economy to materialize, coordinated action from multiple stakeholders is required.

For Government and Policymakers:

• Stable and Transparent Pricing: Ensure COCOBOD is financially sound and can pay farmers a reliable, fair price. This is the foundational trust required for any long-term investment.
• Incentive Regimes: Offer tax holidays, duty exemptions on processing machinery, and subsidized credit to local processing companies to make investments viable.
• Infrastructure Development: Invest in reliable power supply, road networks to farm gates, and port facilities optimized for handling processed goods.
• Research & Development: Strengthen institutions like the Cocoa Research Institute of Ghana (CRIG) to develop higher-yielding, disease-resistant varieties and improve processing technology.

For Farmers and Farmer Cooperatives:

• Quality Upgrading: Adopt improved post-harvest practices (proper fermentation, drying) to produce premium beans that command higher prices and are suitable for fine chocolate processing.
• Organizational Strength: Form robust cooperatives that can collectively negotiate with processors, access financing, and ensure consistent supply volumes.
• Diversification: Integrate other tree crops (like plantains, timber trees) into cocoa farms for additional income and ecological benefits, aligning with the summit’s multi-crop focus.

For Private Sector and Investors:

• Public-Private Partnerships (PPPs): Engage with the government on PPP models for building medium-scale processing clusters in key cocoa-growing regions.
• Focus on Niche Markets: Explore opportunities in organic, fair-trade, single-origin, and premium chocolate manufacturing, where Ghana can build a global reputation.
• Vertical Integration: Large agribusinesses can consider models that control more of the chain, from farming to processing to branded export.

For Development Partners and Financial Institutions:

• Blended Finance: Provide concessional loans and guarantees to de-risk private investment in cocoa processing infrastructure.
• Technical Assistance: Support capacity building in business management, export compliance, and food safety standards (e.g., HACCP, ISO) for Ghanaian processors.

FAQ: Addressing Common Questions

Q1: Isn’t Ghana already processing some cocoa?

A: Yes, but at a limited scale. Ghana has a few large processing plants (e.g., by Cargill, Barry Callebaut) that produce mainly cocoa butter and liquor for export. The vast majority of beans—over 80%—are still shipped raw. Mahama’s call is for a massive scale-up and diversification into more finished products like chocolate, powder, and confectionery made in Ghana for global markets.

Q2: Won’t this alienate Ghana’s traditional buyers in Europe?

A: Not necessarily. Many major chocolate manufacturers are themselves vertically integrating and sourcing directly from origin countries. They may welcome reliable, high-quality partners who can provide semi-finished or even finished products. The strategy is about moving up the value chain, not necessarily cutting out existing partners, but renegotiating the terms of trade to capture more value domestically.

Q3: What about the cost and expertise required for processing?

A: These are valid challenges. That is why the government’s role in providing incentives, building infrastructure, and facilitating technology transfer is crucial. The summit itself aims to attract the foreign direct investment and joint ventures that bring capital and expertise. Training a local workforce in food technology and manufacturing is a parallel priority.

Q4: How does this connect to climate change and the “green economy”?

A: A diversified, locally-rooted processing sector shortens supply chains, potentially reducing the carbon footprint of cocoa products. Furthermore, promoting sustainable agroforestry practices (growing cocoa under shade trees) is better for soil health and biodiversity. The “green economy” theme ties sustainable production with sustainable industrial development.

Conclusion: From Crisis to Catalyst

President Mahama’s message is a defining one for Ghana’s economic future. He has moved beyond diagnosing the symptoms of the cocoa crisis—liquidity problems and price instability—to prescribing a structural cure: domestic value addition. By urging the nation to “use this disaster to pivot,” he is advocating for a long-term strategic reorientation. The transformation from a raw commodity exporter to a competitive processor of world-class cocoa and tree crop products will require immense political will, strategic investment, and farmer inclusion. However, the potential rewards—economic resilience, job creation, and true ownership of the cocoa value chain—are too significant to ignore. The Ghana Tree Crops Investment Summit serves as the critical forum to mobilize the partnerships and capital necessary to begin this essential pivot. The journey from farm to factory, from bean to bar, must now be completed within Ghana’s borders.

Sources

• Presidential Address, Ghana Tree Crops Investment Summit & Exhibition, Accra, February 17, 2025. (Official transcript/release from the Presidency of Ghana).
• Ghana Cocoa Board (COCOBOD). Annual Reports and Statistical Data on Production, Exports, and Farmer Payments.
• World Bank. (2023). Ghana Economic Update: Navigating Global Headwinds. (Sections on agriculture and commodity dependence).
• Food and Agriculture Organization (FAO). FAOSTAT Database. Commodities: Cocoa beans, production and trade data for Ghana.
• Ministry of Food and Agriculture, Republic of Ghana. “Tree Crop Development Policy Framework.”
• International Cocoa Organization (ICCO). Quarterly Bulletin of Cocoa Statistics.
• Ghana Investment Promotion Centre (GIPC). Guidelines and incentives for agribusiness and manufacturing investments.