Ghana’s main upgrading strategy in the cocoa sector has been to maintain quality while struggling with cocoa processing and manufacturing of chocolate.
Previous governments of Ghana have attempted to process cocoa into various products, mainly chocolate.
In 1965, the government of Ghana established the Cocoa Processing Company (CPC) to produce semi-finished and finished products.
However, in the 1980s, following the structural adjustment program, Ghana through the Cocoa Marketing Board, now Ghana Cocoa Board (COCOBOD), eliminated a number of value chain activities such as plantation production, transportation and processing.
This saw the incorporation of the CPC as a limited liability company in 1981. At the time, many economists argued that de-regulation and cost reduction strategies are important for a country to remain competitive in the global market.
However, beginning from the 1990s, value addition to products and services has been emphasized as a key strategy by which economic actors can upgrade their market positions in Global Value Chains (GVCs) in order to compete globally.
Therefore, in the early to mid-1990s, the government of Ghana attempted to process cocoa through independent processors in Germany.
This was later abandoned by the two parties due to high losses incurred. As a current upgrading strategy, the government of Ghana attempts to increase processing in Ghana by encouraging export processing zones in the country.
With this arrangement, the increase in processing is largely a result of investments by multi-national companies.
The consequence is that Ghana is disproportionately affected with regard to economic gains along the value chain.
In recent times, the government has attempted to venture into chocolate making with various arrangements reached in 2019 and 2021.
Although making chocolate is a great move, what is more important is expanding value addition to Ghana’s cocoa beyond the idea of chocolate.
This expansion should be made through creating market niches. This can be done in three ways.
These three suggestions are not very new, though I guess they have not been executed yet or paid attention to aggressively.
It is my hope that these ideas would help support the work of a new committee set by COCOBOD to advise local processing and value addition to Ghana’s cocoa.
First, Ghana can explore other value addition by expanding existing core competencies and capabilities locally.
For almost three decades, COCOBOD through one of its subsidiaries, the Cocoa Research Institute of Ghana (CRIG) has played a major role through research to encourage farmers to process their produce and farm waste.
While most farmers lack the capacity to add value to their farm wastes (such as cocoa pods), most of the CRIG products (including animal feed, soft drinks, marmalade/jelly, pectin, alcohol, theobromine, etc.) developed remain on their shelves lacking scale-up and commercialization by the government.
We call on the government to pay attention to the marketing concept of consumable products developed by CRIG in order for such products to hit supermarket shelves.
This can be done by delivering efficient and effective products to end consumers that are desired and satisfying.
The government would have to invest into research to help commercialize and scale up these existing products developed by CRIG.
Second, Ghana can explore other value addition by building on international developed innovations.
Numerous studies and research by a number of supply chain actors in the Global North have inspired newfound use of cocoa waste including sugar from cocoa pulp, paper from cocoa husk and biofuel from cocoa husk.
For example, the cocoa pulp that is usually discarded as a waste product has been commercialized into other products by many value chain actors.
Nestlé recently launched a new chocolate produced with the cocoa fruit entirely that is sweetened with the cocoa pulp.
Similarly, a Swiss-Ghanaian startup, Koa, processes cocoa pulp into cocoa fruit juice, concentrated juice and dried cocoa fruit.
In this approach, Ghana needs to create a market niche through a build up on international product innovation and development.
Ghana must constantly build upon newfound uses of cocoa waste locally while thinking about commercializing it internationally.
Third, while COCOBOD through CRIG can learn from existing product innovations (both local and international), we should endeavour to produce something different, sustainable and suitable for Ghanaian tastes.
This can be done through investing in research to find new alternative uses of cocoa and cocoa wastes.
This attempt should focus on the learning capacity of the local environment. Ghana’s attempt to valorize cocoa by-products for food (such as candies) and non-food products (including cosmetics and fertilizers) should be done through local means and research. This would improve innovation to support cocoa processing in Ghana.
Now, the emerging threat of competition from China, large plantations being developed in Indonesia by chocolate manufacturers and climate change demands urgent action to ensure that the sustainability of Ghana’s cocoa revenue is not threatened.
Through local value addition, the country could remain competitive as she delivers value addition to end consumers both locally and internationally while reducing our over-reliance on the export of beans.
In addition, exploring other means of value addition will reduce Ghana’s vulnerability with regard to a focus on only chocolate making.
Moreover, through local means of value addition, cocoa-growing communities could participate in the global cocoa-chocolate value chain that is likely to improve the local economy.
Finally, it will create more job opportunities for the growing youth demographic in Ghana. Overall, government and COCOBOD should have an industrial policy that seeks to explore other value addition to our cocoa beyond chocolate manufacturing.
Most importantly, the implications of such value addition on smallholder cocoa producers and their growing communities deserve further attention.