Cocoa Sector Crisis Threatens Ghana’s Economy – IERPP Warns
The Institute of Economic Research and Public Policy (IERPP) has raised alarm over what it describes as a looming crisis in Ghana’s cocoa sector, warning that recent developments could escalate into a national security concern and undermine the country’s economic stability.
In a statement signed by its Executive Director, Isaac Boadi, the institute criticised the government’s decision to reduce the cocoa producer price from GH₵3,625 to GH₵2,587, noting that the move has been strongly rejected by cocoa farmers across the country.
According to IERPP, the price cut risks triggering far-reaching consequences if not urgently addressed. The institute emphasised that Ghana’s cocoa sector supports the livelihoods of over one million people, making it one of the most critical components of the national economy.
It warned that the reduction in producer price could discourage farmers from continuing cocoa cultivation, while also deterring potential new entrants into the sector. This, it said, could lead to a decline in production levels, job losses, and increased economic hardship in cocoa-growing communities.
Beyond the economic implications, IERPP highlighted potential social and environmental risks associated with the development. The institute cautioned that declining profitability in cocoa farming may push some farmers toward illegal mining activities, commonly referred to as galamsey or compel them to sell their lands to illegal miners.
Such a shift, it noted, could worsen environmental degradation, particularly at a time when Ghana continues to grapple with the destructive effects of illegal mining on water bodies and forest reserves.
Describing cocoa as a historic pillar of Ghana’s economy, IERPP stressed that any sustained disruption in the sector could weaken export earnings and destabilise broader macroeconomic conditions. Cocoa remains one of Ghana’s top foreign exchange earners, alongside gold and crude oil.
The institute further warned that rising dissatisfaction among cocoa farmers could heighten tensions in rural communities, potentially creating broader security concerns if grievances are not addressed promptly.
IERPP has therefore called on the government to take immediate steps to ease tensions within the sector. It specifically urged authorities to reconsider the downward revision of the producer price and restore it to GH₵3,625 to safeguard farmer livelihoods and sustain production.
The think tank concluded that proactive policy intervention is critical to preserving the long-term viability of Ghana’s cocoa industry and preventing avoidable economic and security risks.
