Smuggling across the border with Ivory Coast to sell your cocoa production at a better price: this is the only solution for many Ghanaian cocoa producers whose costs are constantly increasing, particularly due to the depreciation of the currency. Ghanaian.
Despite the recent surge in global cocoa prices and efforts by the Ghanaian government to stabilize the sector, many farmers in the world’s second largest producer are turning to illegal trade to survive.
“The cedi is losing value every day, selling in Ghana is no longer enough,” explains Isaac Antwi, who lives in Suhum, in the eastern region, 74 kilometers from the capital, Accra.
Ghana is emerging from one of its worst economic crises in years, after securing a $3 billion loan from the International Monetary Fund and restructuring most of its debt. But the depreciation of the cedi, the local currency, which has lost more than 20% of its value against the US dollar this year, has seriously affected the profitability of cocoa cultivation, despite the high international prices of the bean which is used to make chocolate.
Increase in production costs
Production costs have skyrocketed, with fertilizer and other materials needed for farming becoming more and more expensive. Poor road networks have also inflated transport costs, further reducing farmers’ margins. The sector is highly regulated in Ghana, where cocoa farmers are obliged to sell their produce to the Ghana Cocoa Board (COCOBOD), a public body that sets prices to protect farmers from market volatility.
The government recently increased the purchase price of cocoa from farmers to $2,188 per tonne, a 58 percent increase, but this has not been enough to offset rising production costs and the lure of higher prices in neighboring Côte d’Ivoire and Togo. “If the government were to increase the price of cocoa to match our neighbors, smuggling would stop,” said another farmer in Suhum, Serwaa Adjei.
100,000 tonnes, the weight of contraband
The cocoa sector in Ghana, which represents around 10% of the country’s GDP, depends heavily on small farmers and supports one million inhabitants, out of the 33 million in this West African country. However, the latter find themselves in an increasingly precarious situation. Dennis Nyameke, a farmer from the Western region, explains the economic reasons for smuggling.
“A bag of cocoa sells for at least $137 in Ghana, but when we smuggle it to Ivory Coast, we can get almost $152,” says the father of four.
Industry experts estimate that more than 100,000 tonnes of cocoa beans have been smuggled into Ivory Coast since last year.
500 million dollars in losses
The cocoa sector faces many challenges: illegal gold mining, known locally as Galamsey, is widespread in rural Ghana, affecting water supplies and preventing farmers from access their land. But bad weather conditions, as well as an epidemic known as “swollen cocoa shoot”, also deteriorate the harvests.
According to COCOBOD, 500,000 hectares of cocoa cultivation have been lost in recent years, or around 29% of the country’s total land dedicated to cocoa. Cocoa revenues fell by $500 million during the first quarter of 2024, according to the Bank of Ghana. “We are fighting a difficult fight,” admits Fiifi Boafo, head of public affairs at COCOBOD, who believes he is “doing a lot to improve the situation of farmers”. Obed Owusu-Addai, an activist with EcoCare Ghana, a group that defends the rights of communities, calls for major reforms including “stabilizing the cedi” and “granting subsidies” to farmers.
Sami Nemli With Agency / ECO Inspirations
