Ghana’s Cocoa Sub-Sector Contracts by 26% in Q3 2024, Marking Fifth Consecutive Decline
Ghana’s cocoa sub-sector has recorded a 26% contraction in the third quarter of 2024, marking its fifth consecutive decline.
This sharp downturn contrasts significantly with the broader economy, which experienced robust growth of 7.2% during the same period.
Excluding oil, Ghana’s economy expanded in nominal terms to GHS 254 billion, compared to GHS 194 billion in the corresponding quarter of 2023.
However, the continued contraction in the cocoa sub-sector poses a significant challenge to one of Ghana’s key export industries.
Prolonged Challenges in the Cocoa Sector
The sector’s struggles began in the third quarter of 2023 and worsened throughout 2024. The first quarter of the year saw a contraction of 20.2%, followed by further declines of 26% in both the second and third quarters.
This prolonged downturn raises serious concerns about the future of Ghana’s cocoa industry, which is a major contributor to rural livelihoods and foreign exchange earnings.
Expert Calls for Strategic Focus on Cocoa
Speaking in an interview, Professor Lord Mensah, a Finance Lecturer at the University of Ghana Business School, underscored the importance of cocoa to the country’s foreign exchange reserves.
“We have prioritized gold over cocoa. Even though both provide export earnings, cocoa offers greater liquidity. Historically, the sector has brought in significant inflows—about $1 billion to $2 billion annually—but recent declines have reduced these critical flows, impacting our reserves,” Professor Mensah said.
“Cocoa is a liquid asset. You can borrow against unexported cocoa beans and repay once exports are completed. It’s crucial to safeguard the sector, allocate resources effectively, and strengthen policies to ensure its performance,” he added.
Call for Policy Interventions
The ongoing decline in the cocoa sub-sector demands urgent government intervention. Strategic policies and investments are essential to revitalize the sector, which remains a vital pillar of Ghana’s economy and a significant contributor to its foreign exchange earnings.
