Ghana plans to grow domestic chocolate industry in West African nation
There is a lot of money in processing cocoa to chocolate, but producers of the raw material earn very little profit, including the West African nation of in Ghana.
Last year the global retail industry was worth $107 billion, according to one estimate, but Ghana - the world's second largest cocoa producer - earned just around $2 billion.
This is a familiar pattern for many African countries where the economy is still shaped by a colonial relationship in which they export commodities to be processed elsewhere.
In 2019, over 75% of cocoa grown worldwide came from West Africa, specifically Ivory Coast, Ghana, Cameroon and Nigeria. The world’s largest chocolate producers were the US, Germany, Switzerland and Belguim.
Ghana's President, Nana Akufo-Addo, warned an audience in Switzerland last year that "there can be no future prosperity for the Ghanaian people" if this way of doing things continues.
The country currently processes about 30% of its cocoa crop, but despite plans for growing the domestic chocolate industry there are still many obstacles in the way.
A number of Ghanaian entrepreneurs are keen to seize the opportunity to process cocoa in Ghana itself, before exporting a more lucrative finished product.
"The equipment to make chocolate is very expensive," says Nana Aduna, an ambitious cocoa farmer. "Plus we don't have a local sugar industry and we don't have a local dairy industry."
Making chocolate requires importing milk and sugar, which would drive up the cost of production.
Producing the confectionary also requires consistent refrigeration, but the high cost of the equipment to achieve that is a major obstacle for entrepreneurs without substantial funds.
Access to funds is a big problem and Nana Aduna says that high interest rates on bank loans are an issue for fledgling businesses and at the moment he cannot afford to borrow money.
"You cannot grow a business when you have to service interest rates of 18-20% or even more," he says.
But the government has pledged to address these structural issues.
Echoing the president's words, Ghana’s Trade and Industry Minister Alan Kyerematen says that industrialization is a major tenet of government policy.
"It only makes sense that the most important commodity in our country, which is cocoa… should become the target for a major programme of industrialization."
"If you look at all the most powerful nations globally they also happen to be the most industrialised economies."
There are some local brands, like Golden Tree and artisanal label '57 Chocolate, but President Akufo-Addo's government still needs to do a lot of work to overcome production issues.
His One District One Factory programme aims to kickstart industrialisation by providing the infrastructure for agribusiness.
The establishment of processing plants in some of the big cocoa-growing areas is a key goal.