Stronger Ghana Cedi hits COCOBOD export earnings, pressures cocoa payments and operations
COCOBOD warns that a stronger cedi is cutting cocoa export earnings, even as government boosts farmer support with free inputs.
GHANA – Ghana Cocoa Board (COCOBOD) has warned that the recent appreciation of the cedi, while positive for the wider economy, is negatively affecting the Board’s export earnings and its ability to meet key financial obligations.
In an interview, COCOBOD Board Chair Dr Samuel Ofosu-Ampofo explained that cocoa exports are traded in United States dollars, meaning a stronger cedi reduces the local currency value of export proceeds when converted. He said this creates financial pressure across the cocoa value chain.
“This places pressure on COCOBOD’s ability to meet its financial obligations,” Ofosu-Ampofo said, noting that reduced cedi inflows affect farmer payments, loan servicing and daily operations, including the procurement of essential inputs.
“The rising cedi has its own ramifications on COCOBOD because we sell our cocoa beans in dollars. When we convert those dollars into cedis, it is what we use to pay workers and suppliers, and to purchase insecticides, agrochemicals and fertilizers,” he stated.
To illustrate the challenge, Ofosu-Ampofo compared recent exchange rate movements. He said that in December last year, when the dollar was trading at about ¢16 to ¢17, cocoa sold at around US$2,100 generated significantly higher cedi returns.
However, with the dollar now trading between ¢10.5 and ¢11, the same cocoa sales yield far less revenue in local currency terms, despite unchanged dollar prices.
While acknowledging that the strengthening of the cedi supports macroeconomic stability, he stressed that export-oriented institutions such as COCOBOD face unique difficulties under such conditions.
To cushion cocoa farmers from the impact, Ofosu-Ampofo said the government has stepped in with direct interventions. He disclosed that President John Dramani Mahama has directed COCOBOD to supply agrochemicals and fertilizers to cocoa farmers free of charge.
“For this year alone, about ¢5.8 billion (US$525 million) has been invested in the purchase of agrochemicals for free distribution to farmers,” he revealed.
He appealed to cocoa farmers to continue supporting government initiatives aimed at transforming the sector, assuring them that measures are being implemented to sustain productivity despite currency-related challenges.
Farmers threaten demonstrations
Meanwhile, the Ghana National Cocoa Farmers Association (GNACOFA) has warned of a nationwide demonstration if long-standing farmer welfare concerns are not addressed. The association is calling for urgent reforms, including a pension scheme, improved health insurance and better access to quality healthcare.
“Cocoa farmers currently don’t have adequate social protection,” said GNACOFA National President Stephenson Anane Boateng. “We are calling on the government to establish a pension scheme, expand and strengthen health insurance coverage, and provide quality healthcare for cocoa farmers.”
Discussions on a pension scheme for cocoa farmers have been ongoing for years, with COCOBOD launching a pilot programme in three districts in 2024.
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