Ghana’s President John Dramani Mahama on Thursday defended his government’s decision to reduce producer prices for cocoa, saying the move was necessary to prevent renewed economic instability and address liquidity challenges within the sector.
The decision has drawn criticism from farmers in the world’s second-largest cocoa producer, but Mahama told parliament the adjustment was unavoidable following years of financial strain in the cocoa industry.
“We have had to take the painful but necessary decision to revise the producer price of cocoa,” he said during his State of the Nation Address.
According to the president, maintaining previous pricing levels would have required billions of dollars in additional borrowing at a time when Ghana was emerging from a severe debt crisis.
Failure to act, he warned, would have pushed the country back into the same fiscal difficulties that culminated in the 2022 debt default.
“This unplanned expenditure would have taken us right back to the devastating economic problems we have only recently begun to escape,” Mahama said.
He argued that earlier policy decisions left behind large financial obligations within the cocoa sector, contributing to liquidity shortages that threatened sustainability.
The reforms, he said, aim to stabilise financing while ensuring farmers ultimately receive fair and transparent compensation aligned with production costs.
Mahama acknowledged farmer protests but insisted the restructuring would modernise the industry and secure long-term profitability.
The government plans broader reforms targeting productivity improvements, financing efficiency and value addition within the cocoa value chain.
Ghana’s cocoa industry remains a critical source of foreign exchange earnings alongside gold exports and remittances.
Mahama said sound economic judgment sometimes required politically difficult choices to safeguard national stability.
“These are difficult decisions to take, but I had to take them,” he said.
Analysts say the government faces the delicate task of balancing farmer welfare with fiscal sustainability as global cocoa price volatility continues.
