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GHANA UNVEILS PLANS TO INCREASE ITS COCOA PROCESSING CAPACITYTuesday, January 08, 2019 > 09:21:51
Ghana has unveiled plans to process more of its cocoa beans in the country. According to current estimates, Ghana produced 880,000 tonnes of the beans in 2018. However, the West African nation recently achieved the capacity to process about 300,000 tonnes of that number locally; less than 50 percent of what it produces. This new processing capacity was a 19 percent increase from 252,000 tonnes previously processed locally and embodies Ghana’s recent ambitions to protect itself from price fluctuations of Cocoa worldwide through increased processing.
Ghana is the second largest producer of Cocoa worldwide, second only to Ivory Coast. Both countries produce 60 percent of the World’s supply of the beans. However, most of their exports are unprocessed beans, placing them on the lower rungs of the cocoa value chain. Cocoa, unlike other export commodities, is perishable. And with Ghana not having enough storage and processing facilities, trading companies and chocolate manufacturing companies generate the most income from the exported beans.
However, the African cocoa producers are trying to increase their capacity. Both Ghana and the Ivory Coast signed an agreement on the sidelines of the African CEO Forum in 2018 to assist each other in receiving more value from the crop. Known as the “Declaration of Abidjan”, president Allassane Ouattara of Ivory Coast and president Nana Akufo-Addo of Ghana agreed on a joint venture that would see both countries “harmonize their marketing policy “. Under the agreement, Abidjan and Accra will collaborate on research to develop better varieties of Cocoa, and also “invite the private sector, including the African private sector, to invest heavily in processing in Africa; commit to jointly promoting consumption of the crop in local, regional and emerging markets; and also decide that the consultation between the two countries on the management of their cocoa sectors will be done on a regular basis.”
As part of this, Ghana secured a $6oo million loan from the African Development Bank for its Cocoa regulator Cocobod last year, with the bulk of it expected to go towards processing. The West African country also hopes to secure a Chinese loan for the construction of a state-owned processing factory. Though many believe if countries like Ghana and the Ivory Coast can process more of their beans, they would earn more and create more jobs, analysts say these are unlikely. Many of the chocolate companies selling the processed cocoa in the developed world are also present in these countries and are mechanized.
With its current plans, Ghana hopes to process at least 50 percent of its beans in the country, in a bid to earn more, and to also be able to export chocolate products to other African countries in a bid to encourage chocolate consumption on the continent.