Cocoa sector value addition panacea to unemployment
A key item of discussion here in Ghana is the question of youth unemployment.
Ghana, like many sub -Saharan African (SSA) countries, is afflicted or blessed with what is described as the youth bulge.
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This means that the majority of our growing populations are children and young adults.
Ordinarily, this bulge should bear a great dividend as this segment is innately productive.
However, many African countries seem unable to leverage this and are now afflicted with the woes of unemployment.
This has changed discourse in Ghana over the last few years and this paper argues that the cocoa value chain represents a viable answer to this.
Domestic processing
Each step of the value chain creates jobs but our focus argues that domestic processing will move sustainable jobs from Europe to Africa.
Furthermore, we argue that opportunities from the Africa Continental Free Trade Area (AFCFTA) definitely will deliver a larger single market with countless opportunities for the cocoa value chain, once harnessed.
At this point, cocoa accounts for approximately 60 per cent of the agricultural workforce at average daily wage of one US dollar.
If we scaled up the value addition, the economy will retain 20 per cent more of the revenue, leading to approximate 5.2 per cent more entrants into the workforce.
Examples
For instance, at the recent cocoa awards, our bank representation chanced on a remarkedly simple but astounding innovation in cocoa. Known as the KOA Impact, an interesting industry has begun the successful production of fruit juice, using an often wasted part of cocoa – the pulp.
Their delicious nectar has all the potential of sparking a similar value chain to the grape industry in Australia or California since the scale for mass production already exists.
Imagine the revenue wallet if this juice was marketed to become the staple juice in the 300 million population in the West African sub-region.
UMB support
The Universal Merchant Bank (UMB) as a bank is clear about the potential for value-addition in cocoa.
The bank has focused on this industry since 1972 when it was established and currently finances about 35 per cent of all local buying companies (LBCs).
In the coming years, under the ambit of government policy, the bank aims to become the bank of choice to other players in this value chain.
It recently led the way to structure a multi-million-dollar facility for an indigenous company, a key fertiliser player in this industry, which lends credence to its continuous support to this sector.
Youth unemployment
In summary, we assert the argument. Theobroma (food for the gods) Cacao presents a fine opportunity to change the narrative on the ever-increasing youth unemployment with a focus on specific policy interventions.
The Ghana Cocoa Board’s (COCOBOD) aspiration of $50 billion from cocoa by 2030 is the kind of exciting policy direction in this regard.
These policy interventions must focus on value-addition at all levels of the value chain.
It is perhaps the best achieved through an execution plan following through on the next steps and setting key milestones on the COCOBOD 2030 at $50 billion aspiration.
Philemon Okyere Danquah
Mr Okyere Danquah is the General Manager, Corporate Banking, while Mr Ampadu is the Head of Research and Business Intelligence, UMB.