Ghana's Currency Slump Spurs Increase in Cocoa Smuggling

By Zlatica Hoke

Washington — Cocoa beans have been smuggled between Ivory Coast and neighboring Ghana for years. Until recently, Ivorian growers most often illegally sent their cocoa beans into Ghana where the prices were higher and more stable. A recent slump in the Ghanaian currency and political stabilization in Ivory Coast, however, have tipped the balance. Ghanaian farmers are now the ones who smuggle their beans into Ivory Coast, where they get more money for them.

During recent political turmoil in Ivory Coast, Ghana's stability and fixed cocoa prices made it an attractive market to Ivorian growers. But the situation in Ivory Coast is now settled and the government has established a minimum price to be paid to cocoa farmers to keep Ivorian cocoa beans at home. Meanwhile, Ghana's currency, the cedi, has declined by more than 40 percent against the dollar this year. For the cocoa growers, this means a loss of income. They can make a bigger profit by smuggling their output to Ivory Coast and selling it at a higher price.

"The farmers are compelled to give most of their produce to the buyers from Ivory Coast so they can get enough money for their children; it is not that they are willing. It is the situation that is compelling them to do so," said Alfred Allotey, a cocoa depot manager.

Ghanaian farmers who do not send their cocoa beans to Ivory Coast are urging the government to stop the practice.

"Ghana is our country. We use the cocoa to pay our men, to build our hospitals and all kinds of roads. If we don't stop them, our country is going to go down," said one Ghanaian farmer.

One way to discourage the smuggling would be to increase the price of cocoa in Ghana, but the government has accumulated a budget deficit and can hardly afford that. As long as there are buyers in Ivory Coast who will pay more for Ghana's better quality beans, the smuggling is likely to continue. And some Ivorians see nothing wrong with that.

"It's not the cooperatives who will help them out, because they are the ones who will be paying for their own fuel in order to sell their cocoa and I for one will buy it from them. That's the way it is," said Adoni Nkanza, a member of a cooperative.

Ivory Coast is the world's largest producer and exporter of the cocoa bean, an essential ingredient in producing chocolate. Ivory Coast, Ghana and other West African countries together produce two-thirds of the world's cocoa crop. Industry sources estimate that since last October, up to 100,000 tons of beans have been trafficked across the border into Ivory Coast. Industry officials say they will open discussions on how the two countries can work together to combat the smuggling.