Abstract
Ghana in the year 1911 became the world’s largest exporter of cocoa. However, cocoa export in Ghana nearly came to standstill in the 1970s as a result of the outbreak of swollen shoot disease of cocoa. Ghana since then has not been able to rejuvenate its cocoa export as expected. The years 1999 to 2018 have witnessed a downward trend in the export of cocoa in Ghana. This raises questions of whether the phrase “Ghana is cocoa, and cocoa is Ghana” is still valid. The study attempts to analyze the competitiveness of Ghana’s cocoa sector vis-à-vis its neighbors. In doing so, the authors calculate the Revealed Comparative Advantage (RCA) and Revealed Symmetric Comparative Advantage (RSCA) for Ghana to compare with other West African exporters of cocoa and assess the determinants of Ghana’s cocoa exports. The authors adopt a regression framework to explore the determinants of cocoa exports. The results revealed that Ghana is highly competitive in the export of cocoa beans. The study attributed this advantage to the quality of the cocoa beans Ghana exports. The results further showed that Ghana’s cocoa production volumes and the World consumer price of cocoa beans were the major determinants of the volume of cocoa beans exported in Ghana. The study concluded that although Ghana enjoys a comparative advantage in the export of cocoa beans, Ghana’s cocoa production volumes fluctuate thus affecting the volume of cocoa exported. Ghana, therefore, needs to invest in new hybrid climate-smart cocoa cultivation to boost production and export.
Highlights
The Theobromine bean (Cocoa) is alien to the West African sub-region, the sub-region has assumed the lead role in the production of Cocoa
The bases for which the study employed these indexes is that a greater number of researchers working on competitiveness sees the Revealed Comparative Advantage (RCA) and Revealed Symmetric Comparative Advantage (RSCA) indexes as appropriate and widely used (Hinloopen & Van Marrewijk, 2001), which has always given good results compared with other measures of competitiveness as seen in the works of Balassa (1977), Fertő and Hubbard (2002), Utkulu and Seymen (2004), Batra and Khan (2005), Nwachukwu et al (2010), Jackman et al (2011), Boansi (2013), Jafta (2014), Emilija (2018), etc
From 1999 to 2003, the export volume of cocoa beans from Ghana remained less than 500,000 metric tonnes
Summary
The Theobromine bean (Cocoa) is alien to the West African sub-region, the sub-region has assumed the lead role in the production of Cocoa. 70% of the world production of cocoa comes from Cote d’Ivoire, Ghana, Nigeria, Cameroon, and Guinea. The International Cocoa Organization (ICCO, 2012) report noted that the West African sub-region accounted for about 80% of the world cocoa export trade between the period of 2007 and 2017, with Cote d’Ivoire, Ghana, Nigeria, and Cameroon as the major export source points. The export of the cocoa bean remains the readily available means of foreign exchange for Cote d’Ivoire and Ghana in particular (Kolavalli & Vigneri, 2018). The cocoa industry in the West African sub-region is highly competitive. This is because these countries seek to enhance food security, mitigate the harm of poverty, and boost their export-based crop cultivation to earn optimum foreign exchange to support growth and development (David, 2013)
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