News out of Accra is that Ghana's cocoa exports are declining due to a combination of challenges, including a surge in global market prices and domestic issues like smuggling.
Consequently, the West African nation’s trade surplus is contracting, posing economic concerns for the world’s second-biggest exporter of the chocolate ingredient.
According to news agency Reuters, falling cocoa production has had a significant impact on Ghana's trade surplus, which plummeted by 54% to $392.8 million in the first two months of the year, primarily attributed to a substantial drop in cocoa crop yields and export revenue.
A smaller cocoa harvest has not made matters any easier.
The decline in cocoa export revenue, which fell by almost a third to $508.4m, has exacerbated the situation.
The adverse effects of reduced cocoa exports are reflected in the depreciation of Ghana's currency, the cedi, which has tumbled by 8.3% against the dollar this year, making it one of the worst-performing African currencies.
This depreciation is a direct consequence of the diminished trade surplus and the challenges faced by the cocoa sector, which include an increase in illicit trade of cocoa because of spiking price pressures.
Despite efforts to mitigate market impacts, such as a surge in New York cocoa futures prices, which have more than doubled this year, Ghana continues to grapple with the repercussions of decreased cocoa production.
However, the country's economic indicators, as reported by the Bank of Ghana, show a slight increase in total exports, with imports rising significantly.
Ghana's cocoa crisis and the subsequent decline in trade surplus underscore the vulnerability of the country's economy to shifts in key export markets and internal challenges like smuggling.
The government faces the task of addressing these issues to stabilise the economy and safeguard its position as a major cocoa producer in the global market.
