How Ghana’s Cocoa Industry Is Threatened by Smuggling

The nation’s biggest industry, Ghana’s cocoa sector, is in grave danger due to widespread smuggling.

Hundreds of thousands of metric tonnes of cocoa are being diverted by the illegal trade, which is having a disastrous effect on farmers, the national economy, and the nation’s standing as a top cocoa producer.

Ghana, the second-largest cocoa producer in the world, is up against a formidable foe that threatens to jeopardise its coveted standing in the international cocoa market.

Millions of cocoa farmers and their families are at risk of losing their livelihoods as a result of this illegal trade, which also threatens the nation’s economy.

Up to 30% of Ghana’s cocoa beans are reportedly trafficked out of the nation, with the main destination being the neighbouring countries of Côte d’Ivoire and Togo.

This results in a startling yearly revenue loss for Ghana, amounting to millions of dollars.

The smuggling of cocoa beans in Ghana results in staggering financial losses, with
an estimated USD 400 million lost annually due to the smuggling of 100,000 metric
tonnes of cocoa, valued at a weighted average price of USD 4,000 per tonne.

If smuggling increases to 200,000 metric tonnes, potential losses could skyrocket to USD 800
million.

The consequences of this smuggling are far-reaching, with farmers bearing the brunt of the impact, suffering from lower wages and insecure livelihoods.

Furthermore, the decline in national revenue has a ripple effect, impacting public
services and development initiatives, ultimately hindering the country’s progress and
development.

Implications of Smuggling Cocoa

Revenue Loss

Cocoa smuggling in Ghana results in a significant loss of revenue that could be used
to fund critical public infrastructure and social services.

The estimated USD 400-800 million lost annually to smuggling could be allocated towards constructing roads, building hospitals, and establishing schools, thereby improving the country’s
development outcomes.

Instead, the revenue shortfall forces the government to divert funds from other essential public services or seek alternative funding sources, hindering progress in these critical areas.

By depriving the government of much-needed revenue, cocoa smuggling ultimately undermines Ghana’s ability to invest in its citizens’ well-being and prosperity, perpetuating a cycle of underdevelopment and limiting opportunities for future generations.

Cocoa Traceability

Traceability is significantly hampered by Ghanaian cocoa smuggling, making it difficult to determine the origin, ownership, and movement of cocoa beans.

The supply chain is obscured and it becomes challenging to pinpoint the source of illegal
cocoa since it is sometimes mixed in with beans that are obtained lawfully.

Due to the lack of transparency, it is difficult to monitor and manage problems like child
labour, deforestation, and unsustainable agricultural methods, which undermines
attempts to guarantee that cocoa is produced and handled responsibly.

Initiatives for sustainable and ethical sourcing in the cocoa sector are eventually undermined by
the inability to hold producers and merchants accountable for their actions in the absence of reliable tracking.

Threat to Employment

The cocoa industry in Ghana faces a serious threat to both current and future employment opportunities due to the smuggling of cocoa.

The illicit trade jeopardises the sustainability of authorised purchasing firms, causing some to shut down and creating job losses among purchase clerks, depot managers, and other
employees.

The livelihoods of millions of smallholder farmers and their dependents are also put in jeopardy since smuggling lowers government revenue and limits its ability to fund programmes that assist cocoa producers and their communities.

Furthermore, the collapse of the official cocoa industry prevents new jobs from being created in the cocoa processing, transportation, and marketing sectors, which stunts economic progress and keeps people in poverty.

Impact on Agric Input

In Ghana, the purchase and delivery of agricultural inputs to cocoa farmers are disrupted by cocoa smuggling, which makes it more difficult for them to grow premium cocoa.

Funds that would normally be utilised to provide farmers with necessary supplies like seedlings, fertilizers, fungicides, and insecticides are diverted by the illegal trade.

Furthermore, smuggling makes it more difficult for the government to carry out subsidy programmes and other measures to assist farmers by denying them access to necessary farm inputs at reasonable costs.

Consequently, farmers might have to depend on fake inputs, which would lower their
harvests and revenue. This could result in a decrease in cocoa production.

Sustainability of the Cocoa sector

The sustainability of Ghana’s cocoa industry is threatened by cocoa smuggling, which encourages unsustainable farming methods like deforestation and child labour.

Farmers are encouraged by smuggling to put short-term profits ahead of long-term
sustainability, which results in social exploitation and environmental deterioration.

Moreover, attempts to enhance soil fertility, use integrated pest management techniques, and encourage the production of cocoa that is climate resilient are hampered by the illicit trade.

Smuggling also limits the industry’s capacity to fund R&D, farmer education, and certification initiatives, which makes it more difficult to sustain high-quality output and adjust to shifting consumer needs.

In the end, cocoa smuggling imperils the livelihoods of millions of smallholder farmers and their communities by undermining the industry’s capacity to guarantee a steady and
sustainable cocoa supply.

Quality Control

Cocoa smuggling in Ghana compromises the quality control of cocoa beans as smuggled
cocoa is often harvested, fermented, and dried under unregulated conditions, leading
to inconsistent quality and potential contamination.

Without proper quality control measures, smuggled cocoa may be mixed with inferior beans, affecting flavour, aroma, and texture.

Furthermore, smuggled cocoa may not meet international standards, damaging Ghana’s reputation as a producer of high-quality cocoa.

The lack of quality control also makes it challenging to trace the origin of smuggled cocoa, making it difficult to identify and address quality issues.

Overall, cocoa smuggling undermines Ghana’s efforts to maintain high-quality cocoa production,
potentially impacting the country’s market share and revenue.

Environmental Degradation

Cocoa smuggling in Ghana contributes to environmental degradation as smugglers
often engage in unsustainable farming practices, such as deforestation, to increase
production and evade detection.

This leads to habitat loss, soil degradation, and water pollution, threatening biodiversity and ecosystem balance.

Additionally, smuggled cocoa is often dried and processed in unauthorised areas, resulting in
waste and pollution.

The lack of regulation and oversight also encourages the use of harmful chemicals and pesticides, further degrading the environment.

As a result, cocoa smuggling not only harms the cocoa industry but also poses a significant threat
to Ghana’s environmental sustainability and natural resources.

Strategies to Stop the Smuggling of Cocoa

1. Government Intervention: To monitor the movements of cocoa, bolster border
controls, step up monitoring, and use technology as competitive prices, bonuses,
and support services to encourage farmers to sell cocoa legally.

2. Farmer Empowerment: To lessen their susceptibility to smugglers, offer
farmers competitive cocoa producer prices, assistance, and training.

3. Quality Control: To stop inferior beans from reaching the market, improve
quality inspection procedures.

4. Collaboration: To address the underlying causes of smuggling, promote
regional collaboration with neighbouring countries by fostering cooperation
between security agencies, farmers, and industry stakeholders to share intelligence
and best practices.

5. Raising Public Awareness: Inform growers, merchants, and buyers about the
negative impacts of smuggling cocoa.

6. Enforce Regulations: Strictly apply laws and penalties against smuggling,
ensuring prosecution and punishment for offenders.

Call for Action

To prevent cocoa smuggling, safeguard the nation’s economic interests, and
guarantee the long-term viability of its cocoa industry, the Ghanaian government
needs to act decisively.

By tackling this problem, Ghana can continue to lead the world’s chocolate market, enhance the standard of living for its farmers, and protect the environment for coming generations.

It is time to take action!

 

The writer is Ofosu Darkwa
Concerned Citizen
Sefwi Wiawso, Ghana