Factors Influencing the Competitiveness of Cocoa Export of Ghana and Its Implication on Ghana’s Economy

Bekoe Bernard Boamah ,A Asamoah Assiamah ,Liu Shuangqin ,Jiang Cai-Lou ,Esther Adu-Gyamfi

doi:10.7176/jesd/10-6-05

Abstract

This study examines the competitiveness of Ghana’s cocoa by assessing the performance and determinants of cocoa export from Ghana. Competitiveness of the country in cocoa exports was assessed using the Pearson's Correlation model and Linear Regression model using SPSS and STATA respectively. Time series data on Ghana’s cocoa production and exports and GDP from 2000 to 2014 were collected and analyzed using Pearson Correlation Statistics that were adopted in SPSS. The first analysis was to find the relationship between total cocoa products exports in US$ (including raw cocoa beans and processed cocoa products) and factors such as the real world prices of cocoa (US$/MT) between 2000 and 2014, the gross domestic product of Ghana, the amount of Cocoa beans produced (in tonnes) and processed cocoa exports. The outcome of the analyses revealed that Ghana has comparative advantage in the exportation of cocoa, that Ghana is highly competitive in exports of cocoa beans, total cocoa products and processed cocoa exports. In spite of improvements observed in the country’s export performance over the past three decades, there is potential for further improvement, based on the SPSS and STATA results. The study proceeds to propose measures eminent in ensuring robust cocoa production and consequential exports. Keywords ： Competitiveness, cocoa export, determinants, real world price, gross domestic price. DOI : 10.7176/JESD/10-6-05 Publication date :March 31 st 2019

Highlights

Until 2018 fiscal year, the performance of cocoa export from Ghana has narrowed in recent decades with slow and uneven progress
Having observed a positive association between cocoa exports and increasing exchange rate, it is believed that devaluation or depreciation of the Ghana cedi against major currencies could further provide room for increasing www.iiste.org export
3.3 Hypothesis Two hypotheses were set, two null hypotheses and their respective alternative hypothesis as follows; 1st hypothesis Null hypothesis; H01 There is no significant relationship between real world price of cocoa, total cocoa beans produced in Ghana, processed cocoa exports and the total cocoa product exports of Ghana

Summary

Introduction

Until 2018 fiscal year, the performance of cocoa export from Ghana has narrowed in recent decades with slow and uneven progress. Nwaru and Imonikhe (2010) revealed in their study that the coefficients of total world volume, exchange rate of the Nigerian currency (Naira) against the dollar and Nigerian cocoa production (output) are statistically significant; explaining 70.3 percent of the variability in the export of cocoa from Nigeria as confirmed by the R2 estimate This means that they are the major determinants of cocoa export. Having observed a positive association between cocoa exports and increasing exchange rate, it is believed that devaluation or depreciation of the Ghana cedi against major currencies could further provide room for increasing www.iiste.org export This could have adverse effect on sectors that depend mostly on imports for operation (such measures should be meted out with caution) and implementation of such policies if recommended will improve the performance of cocoa export of Ghana. Basing our analysis on the 90% confidence interval, the Null hypothesis can only be rejected if the P-value is more than (0.10)

Pearson Correlation

Regression Analysis

Conclusions and Recommendation

Discussion