Director of the Economic Strategy and Research Division at the Ministry of Finance, Dr. Alhassan Iddrisu, reported positive developments in the domestic cocoa industry due to ongoing reforms aimed at improving efficiency and financial sustainability.
Addressing the Inaugural Quarterly Economic Roundtable, Dr. Iddrisu underscored the cooperative initiatives between the Ministry of Finance and Ministry of Food and Agriculture to rejuvenate the Ghana Cocoa Board (COCOBOD).
“We are working together to ensure that COCOBOD is put on the radar and being monitored to be certain we improve its operational efficiency and financial viability,” he stated.
One of the key reforms showing positive outcomes is COCOBOD’s phasing out of road construction activities. Dr. Iddrisu explained, “COCOBOD is phasing out its road construction. The consensus is that there’s a Ministry of Roads and the ministry is a better place to do some roads than COCOBOD itself”.
This shift has already led to significant cost reductions, with Dr. Iddrisu noting: “The huge COCOBOD Roads expenditures that were hitting the books of COCOBOD have been rationalised and reduced significantly”.
Another promising reform involves changes to the producer price determination mechanism. The new system, based on FOB prices, aims to reduce shocks to COCOBOD’s finances by reflecting global price volatilities more accurately. “That’s the way to go, so when there are volatilities in the prices they are reflected immediately into the pricing regime – reducing any shock to the books of COCOBOD,” Dr. Iddrisu explained.
Dr. Iddrisu also emphasized that the Ministry of Finance is enhancing its supervision of COCOBOD, which he believes will enhance the organization’s financial stewardship.
These advancements are consistent with Ghana’s implementation of reforms in the cocoa sector under the International Monetary Fund’s (IMF) US$3 billion Extended Credit Facility program. Stéphane Roudet, the IMF Mission Chief for Ghana, recently commended the nation’s progress in this regard.
“We understand that government and COCOBOD are committed to ensuring their activities, such as quasi-fiscal activities, are being curtailed and kept within an envelope which ensures their finances are sustainable,” Mr. Roudet stated.
As Ghana, the world’s second-largest cocoa producer, presses on with these reforms, initial signs of progress are promising. Streamlined spending, enhanced pricing strategies, and strengthened financial supervision all point to COCOBOD moving in the right direction towards increased efficiency and financial resilience.
These reforms are anticipated to profoundly influence Ghana’s cocoa sector, potentially transforming cocoa production across West Africa.