By Roger T.D Wills, Economist and Financial Analyst
Ghana’s cocoa sector, once the pride of the country and a major contributor to its economy, is now in rapid decline, endangering not just the livelihoods of millions of cocoa farmers but also the country’s economic stability. According to the Bank of Ghana’s Monetary Policy Report (July 2024), cocoa exports fell by an astounding 47.4% in the first half of 2024, with revenues falling from US$1.454 billion in 2023 to only US$760 million in 2024. This sharp drop indicates not only institutional flaws in the sector, but also the government’s unwillingness to address long-standing issues, particularly the devastation caused by illicit mining, or galamsey, and its direct influence on the nation’s future.
Cocoa Sector in Crisis: The Facts Behind the Decline
The Bank of Ghana links the significant reduction in cocoa exports to a number of pressing challenges, including harsh weather, pests and diseases, and cross-border cocoa smuggling. However, the study fails to highlight one of the most serious threats: galamsey. The illicit mining plague that has decimated Ghana’s agricultural land and waterways is directly related to the cocoa sector’s poor conditions.
Extreme Weather and Climate Change: Cocoa farms have experienced unpredictable rainfall and extended dry seasons, which has been exacerbated by climate change. This has made it more difficult for farmers to sustain their crops, resulting in lower yields and export volumes.
Pests and Diseases: Long-standing issues such as black pod disease and capsid infestations continue to afflict cocoa farmers. Farmers have struggled to manage due to a lack of adequate government assistance, such as pest control money and access to affordable insecticides.
Cocoa Smuggling: Smuggling remains a major issue, with cocoa being illegally smuggled to Côte d’Ivoire, where producers may earn higher rates. This reduces Ghana’s export volume and further drains money from the sector.
However, all of these issues pale in comparison to the extensive devastation wrought by galamsey, which has ruined the country’s agricultural landscape and depleted vital water resources.
Galamsey: The Silent Killer of Cocoa and Agriculture
Illegal small-scale mining (galamsey) has escalated into a national disaster, with evident consequences for Ghana’s cocoa business.
The careless activities of galamsey miners have poisoned rivers and water bodies with mercury and other hazardous compounds, rendering water supplies unfit for drinking and agriculture. Farmers in cocoa-growing regions, such as the Western and Ashanti, are now facing poisoned land and polluted water, rendering their crops and livelihoods unsustainable.
According to Ghana Water Company Limited (GWCL), galamsey operations have caused severe damage to water bodies including as the Pra, Ankobra, and Birim rivers, which are critical supplies of irrigation for cocoa crops. Without access to clean water, cocoa growing is difficult. The government’s reluctance to implement regulations and combat unlawful mining has exacerbated the environmental calamity, hastening the cocoa sector’s downfall.
The Government’s Role: A Call for Accountability
The disastrous effects of galamsey on cocoa and water bodies raise major concerns about the government’s commitment to protecting Ghana’s most valuable natural resources. Despite repeated promises and high-profile campaigns to combat illegal mining, the government’s efforts have proven largely ineffectual. Enforcement has been lax, and political will appears weak in the face of the galamsey threat.
In 2017, the government established the “Operation Vanguard” task group to tackle galamsey, however the results have been disappointing. Illegal miners continue to operate with impunity, and the long-term repercussions of their actions are growing more serious. The absence of strict policies to safeguard the environment and promote sustainable cocoa growing reveals a serious failing on the part of the authorities.
The Consequences: A Bleak Future for Ghana’s Economy
The steep decrease in cocoa exports is more than simply a temporary economic setback; it portends a future economic disaster if immediate action is not done. Cocoa has traditionally been one of Ghana’s main foreign exchange earners, and the loss of over half of the sector’s revenue in a single year foreshadows a much greater economic problem.
While the Bank of Ghana’s report notes increases in gold and oil exports, these sectors alone cannot support the economy. The value of gold exports increased by 46.4% to $5.04 billion, while crude oil earnings reached $1.98 billion. However, relying on unpredictable commodity prices is hardly a long-term economic plan, and any downturn in global gold or oil markets might put Ghana at risk. Furthermore, gold exports are inextricably linked to the galamsey disaster, as most of the illegal gold mining that damages cocoa crops also contributes to Ghana’s gold exports.
Ghana’s overall imports increased 13.5% to US$7.42 billion in the first half of 2024, boosted by both oil and non-oil imports. This increase underlines the country’s rising trade imbalance, which, if not addressed, could lead to a dangerous depletion of foreign reserves and mounting national debt.
What Must Be Done: Urgent and Decisive Action Required
The government cannot continue to overlook the twin concerns of galamsey and the cocoa industry’s demise. Immediate and immediate action is required to prevent a full-blown economic disaster. Here are the main steps that need to be taken:
Strengthen Enforcement Against Galamsey: The government must go beyond surface-level crackdowns and show genuine political resolve to eradicate illegal mining. This entails stronger enforcement of current laws, harsher fines for violators, and greater transparency in combating corruption within enforcement organisations.
Restore Water Bodies: Urgent investment in water restoration projects is necessary to undo the harm done to Ghana’s rivers and water systems. Without access to clean water, cocoa farming will continue to diminish, causing harm to the agricultural industry as a whole.
Support Cocoa Farmers: The government should provide direct assistance to cocoa farmers in the form of pest control subsidies, access to drought-resistant cocoa cultivars, and instruction on sustainable agricultural practices. Financial assistance should also be provided to people who have lost their land as a result of galamsey.
Promote Diversification and Value Addition: To minimise its reliance on primary exports such as cocoa, Ghana needs diversify its economy by developing agro-processing industries, value-added exports, and other sectors such as technology and services.
Secure Competitive Cocoa pricing: By collaborating with the Ghana Cocoa Board (COCOBOD) to offer farmers competitive pricing, the government can prevent cocoa smuggling into neighbouring nations while keeping money inside legitimate trading channels.
In Concluding I would say Time is Running Out!
The cocoa sector’s downfall, compounded by the unregulated spread of galamsey, poses a serious threat to Ghana’s economy. The government’s failure to solve these issues jeopardises not only the livelihoods of millions of farmers, but also the country’s long-term stability. Immediate, bold, and immediate action is required to reverse these trends and safeguard the nation’s most valuable resources. If the government does not act immediately, Ghana risks facing an economic disaster that would take decades to recover from.
References
Bank of Ghana. (2024). Monetary Policy Report – July 2024. Retrieved from Bank of Ghana Official Website
Ghana Water Company Limited (GWCL). (2023). Annual Report on Water Bodies Affected by Illegal Mining.
Ministry of Food and Agriculture. (2024). Agricultural Outlook Report.
Ghana Cocoa Board (COCOBOD). (2023). Cocoa Sector Annual Report.
