Ghana is on its way to once again becoming the world's leading producer of cocoa, as purchases of the commodity from the start of the season to April this year reached 541,700 metric tonnes, 35.6 per cent higher than they were in the same period last year.
Economic analysts have attributed the sharp rise to good rains, fewer bushfires, greater care by agricultural extension officers, the mass spraying exercise, the increase in the producer price of cocoa and the crisis in Cote d'Ivoire.Presenting a paper at a roundtable discussion on the performance of the economy for the first quarter,a lecturer at the Economics Department of the University of Ghana, Dr Augustine Fritz Gockel, expressed optimism that cocoa production would continue to rise and make the country the leading producer in the near future.
The programme was organised by the Private Enterprises Foundation (PEF).“Cocoa production, which increased significantly over the last two years, is expected to increase further this year, with Ghana becoming the leading world producer of cocoa in the very near future,” Dr Gockel said.
The analyst, who dwelt mainly on published data by the Bank of Ghana (BoG) for his analysis, said the dollar value of farmers' price in Ghana was over a third higher this cocoa season than it was in the 2001/2002 season and that the increase had a positive impact on fertiliser usage, general farm maintenance and had reduced cocoa smuggling to neighbouring countries.
He said domestic revenue of ¢3.562 trillion for the first quarter of the year was greater than the expected ¢3.540 trillion, saying the tax component of that figure, which was ¢3.3 trillion, exceeded the budgeted level by 8.3 per cent due to impressive international trade taxes and petroleum taxes.
However, the economy recorded shortfalls in company tax, which fell by 5.7 per cent over the expected revenue with non-tax revenue also falling by 31.2 per cent against a targeted ¢120.6 billion.“Many private enterprises have to ask for waivers because of the belief that taxes on them are heavy and burdensome,” Dr Gockel pointed out.
Again, provisional fiscal expenditure for the first half of the year was within budgeted limits, although it exceeded the limit in May. In the first quarter, actuals were ¢4.616 trillion, against a budget of ¢4.681 trillion. However, in the May 2004 Statistical Release, the Bank of Ghana said “total expenditure for the first quarter of 2004 was above the programmed limit.
This was the result of a spillover of commitments amounting to about ¢669.0 billion from the last quarter of 2003, which was liquidated in the first quarter of 2004”, Dr Gockel said.Dr Gockel and some participants at the discussion were pessimistic that the economy could record a single-digit inflation as projected, saying food prices had increased and were supposed to continue rising due to the recent introduction of a 2.5 per cent National Health Insurance Levy.
“Some retailers have started increasing prices and the cascading effect could be devastating if not dealt with in time,” Dr Gockel stated, and called for more education on the implementation of the levy.He said another possible issue that could deny the economy a single-digit inflation was the adjustment of prices of petroleum products which, he said, was very imminent.