OIL CANNOT SIMPLY BECOME THE NEW COCOA
5/30/2012 10:04:31 PM -
Recently, Ghana was honoured with a visit from no less a person than the President of the Republic of Equatorial Guinea, His Excellency Teodoro Obiang Nguema Mbasogo. One of the statements he made was to the effect that although counted among the rich oil nations, his country has realised the need to harness its agricultural potentials in order to forestall an economic crisis when their oil reserves run dry. The President and his entourage visited various cocoa-related industries in Ghana, probably because cocoa would be the anchor for harnessing the agricultural potential of his very rich oil producing nation.
The oil-rich Republic of Equatorial Guinea in size, is smaller than the Brong-Ahafo Region of Ghana. Pre-independence Equatorial Guinea counted on cocoa production for hard currency earnings with the highest per capita income of Africa in 1959. In 1996, large oil reserves were discovered creating a dramatic increase since then in government revenue and making the country the third-largest oil producer in Sub-Saharan Africa.
As we pondered over this 'revelation' from President Teodoro Obiang Nguema Mbasogo, we also wondered about Ghana, the oil find and cocoa. Will oil become the new cocoa or will oil flow alongside cocoa?
Cocoa is Ghana's second leading foreign exchange earner, worth 30 percent of all revenue from export and responsible for about 57 percent of the overall agricultural export. The sector directly and indirectly employs about 2 million Ghanaians. The cocoa sector has over the years been responsible for a large chunk of Ghana's Gross Domestic Product (GDP), contributing about 8.1 percent of GDP in 2006. The cocoa sector on yearly basis injects more than 1 billion US Dollars into the Ghanaian economy, contributing about 1.1 billion US Dollars out of the total 4.03 billion US Dollars in export revenue for the country in 2008. But the reality is that market for Ghana's cocoa on the international market has not yet been stretched to full capacity. There is still huge demand for Ghana's cocoa because of its premium quality.
By 1936, Ghana was producing 50 percent of the world's output of cocoa beans but that has now declined to about 20 percent. Ghana used to be the lead exporter of cocoa until the 1977/78 crop season when it was overtaken by Cote D'Ivoire. The reasons for this are several but a recent research commissioned by Cadbury International and conducted by the Department of Agricultural Economics and Agribusiness of the University of Ghana and the Institute of Development Studies of the University of Sussex revealed that the future of cocoa production is threatened by the fact that the majority of the youth in cocoa growing areas across the country have migrated to big towns in search of jobs, leaving cocoa production to the aged.
Our impression is that the threat to cocoa production posed by the migration of the youth from cocoa communities, is really about to heighten, as Ghana prepares to drill oil by close of this year, 2010. The threat is more serious because it is on the offshore of the Western region, which happens to be one of the cocoa baskets of the nation where that drilling of the 'fluid gold' will be happening. Our fear is that the small number of young people still undertaking cocoa production in the cocoa growing communities may also be moving to the oil drilling areas in search of jobs there, which will further threaten the sustainability of cocoa production. If we allow the cocoa industry to decline, with its attendant decline in revenue due to the returns in oil revenue, the economy would not see any major gain and Ghana's wealth will not be increasing but rather, Ghana would experience the classical state of replacing one income source with another.
Now more than ever, there should be concerted effort by all stakeholders, and indeed in this, every Ghanaian is a stakeholder, to make cocoa production attractive to young persons. Efforts should also be made to make cocoa production less labour intensive for should the able young persons currently providing cheap labour in cocoa production migrate, children would become the sought after labour. This of course also has its negative consequences for quality but even much more international acceptance of our cocoa.
President Teodoro Obiang Nguema Mbasogo's concerns for his country's future seem to reecho what the late Kwadwo Baah Wiredu, then Minister of Finance and Economic Planning, said in 2006. He said, 'there is no doubt that cocoa occupies a center stage in our economy, and the indications are that it will continue to assume such increasing importance for a long time to come'. On August 30, 2010 when the Vice President of the Republic of Ghana met a delegation from Cadbury, Kraft Foods and Fairtrade, he also affirmed the Government's determination to maintain cocoa as number one revenue earner for the country. As young people of Ghana, we believe that the future of Ghana is holds may opportunities for us if only as a Government and as a Country we ensure that even as oil flows, we enable it to flow alongside a sustainable cocoa industry.
Written by Cadbury Cocoa Ambassadors and students of the Kwame Nkrumah University of Science and Technology Joseph Opoku Gakpo and Ebenezer Annoh
This article was first published on page 10 of Ghana's national newspaper Daily Graphic, on Friday 8th October 2012