The IMANI Center for Policy and Education has questioned the poor performance of Ghana’s Cocoa Processing Company (CPC), given continued operational losses and major production bottlenecks.
In its latest “Critical Analysis of Governance and Economic Issues” report, IMANI stated that the Cocoa Processing Company has continued in operational losses, citing its numerous challenges within the Ghanaian cocoa production environment.
Noting these challenges of the company, IMANI therefore raised the question of whether cocoa processing is a business that will inure to Ghana’s benefit.
“Cocoa processing, in principle, should be one of Ghana’s most promising industries. The country remains the world’s second-largest producer of cocoa beans, and processing locally should add value, create jobs, and retain export earnings. However, the realities on the ground tell a different story.”
IMANI Center for Policy and Education
The report stated the factors that underpin the profitability of cocoa processing, including “reliable and steady raw material supply, access to finance, affordable energy, competitive tariffs, infrastructure, and market access for semi-finished and finished products,” emphasizing that in Ghana, almost all these underpinning factors are weak.
IMANI noted that the major underlying factor, the supply of raw materials, remains a major problem, stating that the Cocoa Processing Company and other processing companies struggle to get enough of the light beans required for production.
“Ghana sells the bulk of its cocoa forward on international contracts, leaving processors with limited access to quality beans. As a result, some processors have had to import beans from neighboring countries to sustain production, a costly and inefficient alternative.”
IMANI Center for Policy and Education
The second challenge IMANI identified was high operational cost, which is due to underlying factors such as energy tariffs and financing costs, including import duties on essential inputs like sugar and milk for finished cocoa products.
All these underlying factors contribute to making local processing of cocoa very expensive. The report further noted that “For many firms, the cost of production outweighs revenue, leaving them to operate at break-even or losses.”
Another underlying factor for the profitability of cocoa processing identified was limited value addition, whereby many Ghanaian producers mostly end up producing semi-finished products such as cocoa liquor and butter, rather than finished consumer products like chocolate.
IMANI further noted that due to this practice, local producers often do not get the higher profits from global value chains, which still end up being captured abroad.
Also, the report stated that access to financing is a major problem, whereby difficulty in accessing loans often forces local producers to rely on self-financing.
“Access to finance is a structural bottleneck. The absence of syndicated loans or flexible credit facilities forces processors to self-finance their operations, which limits expansion and working capital.”
IMANI Center for Policy and Education
The report draws a comparative analysis between the Ghanaian situation and that of Côte d’Ivoire, taking into consideration government policies in terms of support, the availability of raw materials, market structures, and the predictability of access to raw materials.
“Comparatively, Côte d’Ivoire’s processors operate under a more supportive structure: access to beans is more predictable, energy tariffs are lower, and government policies deliberately link local processors to global buyers. Ghana’s processors, by contrast, operate under uncertainty and high-cost conditions.”
IMANI Center for Policy and Education
IMANI further gave an assessment of the situation of Ghana’s Cocoa Processing Company on the back of this comparison, emphasizing that given how the Ghanaian production environment is barely sustainable for the private processor, then “for a state-owned enterprise like CPC, the challenge is even greater.”
“Beyond operational constraints, CPC suffers from political interference, inefficient management, and delayed decision-making. Unlike private processors that mostly focus on semi-finished products, CPC produces finished goods, which require importing additional inputs like sugar and milk, all at a high cost. This means CPC’s operations carry heavier expenses but compete in the same weak market.”
IMANI Center for Policy and Education
IMANI therefore made the conclusion that the cocoa processing companies’ problem has to do with both internal challenges and operating in a system that does not reward processing, further emphasizing that “the broader environment, high costs, bean shortages, and weak financing make the entire sector unprofitable. But CPC’s politicized management makes its struggle even deeper.”
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