The world’s second-biggest producer of Cocoa Ghana, runs the risk of irking about 800,000 cocoa farmers over its decision to end subsidy worth $450 million this season. This will be the first critical decision to be taken by the current president Nana Akufo Addo since he assumed power in 2016.
According to Bloomberg, Ghana Cocoa Board is running out of cash with few options for funding left, other than to sell short-term debt to local investors at rates as high as 22 percent.
The farmers are not happy with the government’s plan on going against its promise because during the campaign for the 2016 election, Nana Akufo Addo’s New Patriotic Party (NPP) promised to invest in farms and increase prices. Surprisingly, the campaign tactics helped NPP to win five major Cocoa producing regions which are Ashanti Region, Brong-Ahafo Region, Central Region, Eastern Region and Western Region.
However, the government decided to take this stance due to the fall in the international price of the bean by one third since mid-2016. While the World Bank forecasts that the economy will expand by 8.3 percent in 2018, the fastest rate in Africa, Ghana doesn’t have enough money to support prices.
Johnson Mensah, head of a farmer cooperative in Enchi, a town near the western border with Ivory Coast told Bloomberg that producers are not anticipating that the government will go through with the plan.
“We have only heard rumors but neither the government nor the cocoa board has said anything to us and I don’t see farmers accepting reduced rates,” Mensah said further.