Ghana to lose 1.3 trillion in cocoa revenue

Accra (Greater Accra), 1st October 99 - The Ghana Cocoa Board (COCOBOD) on Friday said the fall in the world price of cocoa is a major disaster on the economy since the country will lose about 1.3 trillion cedis in revenue this year.

Mr. John H. M Newman, Chief Executive of the Board, told the Ghana News Agency in an interview in Accra that the next two years also paint a gloomy picture since there is no indication that the price of the commodity will rise.

"The ripple effect of the disaster will be enormous given that the ancillaries in the economy hinge on cocoa".

Mr. Newman said the issue would have been more disastrous had the Board not got the foresight "to sell forward" before the world price plummeted.

"We would have lost about 350 billion cedis within the last 18 months if we had not done that", he said.

Mr. Newman attributed the falling prices to many market forces and added that recessions in South East Asia, Russia and Eastern Europe where cocoa consumption was making inroads are some of the factors.

He said "speculators are also reducing their cover" and this is affecting other cocoa producing countries as well."

Mr. Newmann denied that the COCOBOD was to be divested and explained that "it is its commercial activities that are being absorbed by the private sector.

We will still supervise the private buying agencies and give them directions and at the same time be in control of the external sales".

He said it is the Produce Buying Agency that is being divested and will soon be listed on the Ghana Stock Exchange.

Mr Newmann said 50 per cent of its shares will be floated and government will retain the rest. About 20 private companies will also be licensed to buy cocoa.

"These are fundamental structural changes in the cocoa industry to de-regulate it to a more service- providing organisation and at the same time make it responsible for purchasing about 70 to 80 per cent of the nation's cocoa"

He said the COCOBOD would lose its Cocoa Services Division to the Ministry of Food and Agriculture under the changes and added that the change would enable the Ministry to help farmers to produce food crops alongside cocoa.