The challenges in the cocoa sector caused by the reduced price of the golden beans remain a major issue in the country and are likely to haunt the government until the end of its tenure.
This is particularly significant because cocoa pricing was a cornerstone of the NDC campaign in the producing areas of the country. Many farmers affected by the price “haircut” are recalling the broken promises contained in the party’s campaign package as they move from one farming area to another.
There are important lessons in the evolving cocoa story for politicians: when campaigning, avoiding excessive propaganda is advised. Today, the government finds itself in a quandary as farmers demand what is rightfully theirs.
The NDC’s aggressive campaign strategy worked effectively to their advantage, presenting the Akufo-Addo administration as uncaring about the interests and welfare of cocoa farmers. This reflected in the votes they secured in cocoa-producing areas. However, the situation is changing as cocoa farmers wake up from their Rip Van Winkle slumber. They now realise they were misled.
Regardless of conditions under the previous administration, there was never a time when cocoa prices were arbitrarily reduced. Even when negative market figures on the international stage suggested a cut, the government intervened to prevent the negative impact on farmers.
No development this year has exposed the NDC propaganda more starkly than the unfolding cocoa politics. There are many moving parts in the story. Dr. Mohammed Amin Adam, former Finance Minister, highlighted the incompetency of today’s economic managers during a recent party engagement.
Buffering and hedging when prices are rising, as was done previous years, should have been the approach of any serious finance managers. However, the NDC chose otherwise. Whether due to a lack of knowledge or an obsession with ending existing contracts to rush to the spot market, they ignored prudence. The market has collapsed, and the consequences are now visible.
The government’s claim of being “better managers of the economy” does not hold up when, as observed by the former Finance Minister, cocoa farmers are being denied timely payments. Better economic managers do not confuse priorities this way.
It is also instructive to challenge Randy Abbey’s comments on cocoa pricing. He claimed that Ghanaian cocoa is overpriced, seemingly unaware of the causes behind this reality. Has he overlooked the reasons for the high cocoa price, or does he simply not know?
Our currency has been overvalued through excessive pumping of dollars into the system to support the narrative of a stable economy. The result is overpriced cocoa and the attendant negative consequences.
Ghana’s international competitiveness is declining and will continue to do so if this lazy approach to economic management – thus excessive dollar injections to prop up the economy – persists. How long can this continue?