A study by Public Interest Law (CEPIL) has brought to light the potential of raising up to US$517 million annually by combatting Ghana’s cocoa smuggling issue.
The report underlines that this sum could effectively fund the construction of 20 units of 80-bed capacity hospitals.
Despite government interventions to boost cocoa production, the study reveals that these efforts are falling short, with an alarming annual loss of 200,000 metric tonnes to smuggling.
Cocoa smuggling poses a significant obstacle to enhancing the sector’s contribution to Ghana’s economy, despite its standing as the second-largest global cocoa producer, following Côte d’Ivoire, with a market share of around 20 percent. In 2021, cocoa contributed approximately US$533 million to the country’s GDP and played a vital role in foreign exchange earnings, ranking second only to mineral exports.
These findings were presented at a workshop in Accra, organized by CEPIL in collaboration with Oxfam-Ghana. The workshop unveiled a study titled ‘Addressing Policy Gaps in the Cocoa and Mining Sector Value Chains.’
Key Findings:
Cocoa Smuggling Impact: The study identifies smuggling as a major factor impeding sector growth, estimating an annual loss of 200,000 metric tonnes.
Contributions to GDP: In 2021, cocoa contributed approximately US$533 million to Ghana’s GDP.
Challenges Faced by Cocoa Sector: Low prices, inadequate labor, illegal mining (galamsey), low soil fertility, pest and diseases were identified as challenges faced by the cocoa sector.
Input Subsidy Programs: The study revealed that 97 percent of cocoa farmers were aware of ongoing input subsidy programs but expressed difficulty accessing subsidized fertilizer.
Recommendations:
Addressing Subsidy Issues: The study recommended measures to address subsidy challenges, enhance access to farm inputs, and reassess the government’s purchase price of cocoa from farmers to increase benefits to the state.
Gender Equity: Emphasizing gender inequity, the study urged stakeholders to address unequal opportunities for men and women in cocoa farming, including access to land, credit, and farm inputs.
Insights into the Mining Sector:
Tax Contributions: The study highlighted that the extractives sector remains the largest tax-paying sector in Ghana, significantly contributing to GDP and gross merchandise exports.
Employment: The artisanal and small-scale mining sector alone employs around 1 million people, with an additional 5 million livelihoods depending on its proceeds.
Tax Evasion and Smuggling: The report noted tax evasion and smuggling as major factors affecting the Ghana Revenue Authority’s ability to meet tax targets in the mining sector.
Local Content Policy: The study recommended amending provisions in the mining sector’s local content policy to include specific benefits for women and persons with disabilities.
The study aimed to identify inherent issues affecting cocoa and mining value chains while addressing inequities and improving access to opportunities, especially for women and persons with disabilities in the extractives sector.