Accra, Ghana, June 4
In bustling markets and trading halls across Ghana, there is an obvious economic resurgence. The country, the world’s second-largest cocoa producer, has seen its cocoa earnings triple in a matter of months, jumping from $579 million to $1.8 billion. Widely circulated reports capture a sentiment rippling across the continent.
President John Dramani Mahama, sworn in on January 7, now faces a critical task, turning Ghana’s recent economic upturn into lasting recovery. The former leader, who held office from 2012 to 2017, returns to power at a precarious moment, inheriting a nation still reeling from its worst financial collapse in decades. His administration took charge amid a perfect storm, defaulted Eurobond payments, a free-falling cedi, and inflation so severe it gutted household incomes overnight.
Cocoa production, a cornerstone of the economy, had hit its lowest level in decades, battered by climate change, tree diseases, and illegal gold mining, as noted in a Reuters report from 16 December 2024. Yet, in just five months, Mahama’s government appears to have turned the tide, not only in cocoa but across other sectors, while also stabilising the cedi.
The cocoa boom is the most striking success. The global cocoa price surge, driven by supply shortages, prompted COCOBOD, Ghana’s cocoa regulator, to raise producer prices by 45% to $3,104 per tonne in September 2024, according to industry reports.
Mahama’s government capitalised on this, ensuring that farmers felt the benefit directly. But the president’s strategy goes beyond higher prices. On 27 May, Mahama, during a panel discussion at the 60th Annual General Meeting of the African Development Bank (AfDB) in Abidjan, said that Ghana is on track to match or surpass Côte d’Ivoire’s benchmark of processing 50 per cent of its cocoa locally within the next four to five years.
This push for local processing is critical. Ghana and Côte d’Ivoire supply nearly two-thirds of the world’s cocoa, yet reap only a sliver of the chocolate industry’s profits.
Fairtrade figures reveal a stark imbalance. Raw beans account for a mere 6 to 7% of a chocolate bar’s final price, while Western manufacturers and retailers pocket the rest. By expanding domestic processing, Accra could claw back more value from the $100 billion global chocolate market, a market that currently pays the two African producers just $6 billion combined for their dominant share of supply.
Mahama’s government has also committed to expanding cocoa farmland, a promise reiterated during a visit to Goaso on 31 May, aiming to add 200,000 hectares to production. This, alongside plans to restructure COCOBOD, has sparked hope. “We are willing to work with anybody if it will make the cocoa sector more efficient and bring back our cocoa production to what it was before,” Mahama told Reuters on 13 December 2024, after the elections, hinting at potential private sector partnerships to streamline the regulator’s operations.
Beyond cocoa, Mahama’s government has made strides in other areas, notably in the cashew sector. On 30 May, the Ghana Broadcasting Corporation (GBC) Online reported Mahama’s pledge to build a cashew processing factory in the Bono Region, a move intended to add value to another key export. “The cashew industry has lacked proper support and a clear development plan for many years,” Mahama said, announcing the creation of a Cashew Development Board to oversee the sector’s growth. For local farmers, this is a lifeline. As one farmer put it, “If we process our cashews here, my children might not have to leave the village to find work.”
Perhaps most striking of all Mahama’s recent successes is the stabilisation of the cedi, a currency that had been in freefall since 2022, exacerbating Ghana’s debt crisis. On May 27, the Importers and Exporters Association of Ghana praised the Ghana Gold Board’s efforts to strengthen the cedi, a policy Mahama has supported through reforms in the gold sector.
The Atlantic Council noted on 14 December 2024 that Mahama’s administration would need to focus on “increasing transparency” in key industries like gold, oil, and cocoa to maximise government revenues.
Pundits say by curbing wasteful spending, such as COCOBOD’s administrative costs, which tripled between 2018 and 2023, and prioritising household subsidies over corporate handouts, Mahama’s policies, as described in recent reports, focus on stabilising the Ghanaian cedi, reducing government expenditure, and addressing corruption, which he claims have led to economic gains in the first five months of his administration. For example, he attributed the cedi’s appreciation to a balanced import-export ratio and effective leadership, not trickle-down policies.
The road ahead is still fraught with challenges. Many warn of potential Western pushback. Mahama clearly appears to support the sentiment that the world economic order is rigged against Africa. His push aligns squarely with his long-standing campaign for industrialisation and his drive to dismantle trade obstacles under AfCFTA. His administration is now asserting greater control over Ghana’s vital economic pillars, gold, oil, and cocoa, while consolidating political support around national resource ownership.
The strategy includes leveraging domestic capital markets through the Ghana Stock Exchange to shift control of extractive industries from foreign operators to local investors. This dual push for supply chain control and Ghanaian ownership marks a deliberate break from decades of concession-dominated resource governance. This strategy could insulate Ghana from external pressures.
Mahama’s achievements, economic watchers say, are the result of a blend of strategies that include listening to farmers, seizing global opportunities, and pursuing value addition while stabilising the currency.
Mahama’s government has tripled cocoa revenues, steadied the cedi, and begun building domestic processing capacity, early but tangible signs of an economic overhaul. Still, analysts caution that favourable global prices and frozen debt repayments have artificially buoyed these gains.
The recovery remains shaky. Without structural reforms, these gains could fade away as suddenly as they appeared. Economists warn that sustaining momentum requires immediate action on multiple fronts: expanding domestic manufacturing, opening new export markets, enforcing stricter budget controls, building robust foreign exchange reserves, and confronting entrenched economic weaknesses.
For the cocoa sector, the path forward demands concrete steps, such as increased local processing, aggressive anti-smuggling operations, full utilisation of AfCFTA trade benefits, and the creation of price stabilisation instruments. Economists say these measures would help Ghana capture more value from its dominant position in the global cocoa market while insulating farmers from volatile price swings.
