NCF discusses the smuggling crisis that has overrun Ghana and speaks to the government corruption that facilitates this.

What is happening?

Smuggling has been around in Ghana for a long time. But when Ghana faced an economic and currency crisis in 2022, this smuggling quickly grew out of control.

The Ghanaian government, through the Cocoa Board, sets a minimum price for which farmers are paid for their beans at the start of each season in September, theoretically to protect farmers income from price fluctuations within the global market. This price point is usually reviewed and adjusted in April and October so farmers can benefit from increased global demand for cocoa and receive increased profits.

However, the 2022 economic crisis meant the production costs for farmers increased, the Cocoa Board increased the price point of cocoa in April 2024 to compensate for these rising costs but not by enough to see farmers break even. This in addition to the fact that some farmers reported delays in their payment for their cocoa beans of up to a month, left them susceptible to the higher price point offered by smuggling rings.

One farmer, Isaac Antwi, stated that he was forced to turn to smuggling because, ‘Selling in Ghana just does not cut it, due to the weak Cedi and high production costs.’ He says, ‘I earn more money smuggling my beans, so I can feed my family and pay off my debts.’

In comparison to the weakened Cedi, the stronger currencies of neighbouring countries and the increased international demand of cocoa, makes smuggling the most viable option for farmers drowning in debt to be able to sell their beans for more money.

In the 2023-2024 period, over 160,000 tonnes of cocoa was smuggled out of Ghana. This equates to over one third of Ghana’s total cocoa output being lost to smuggling and in terms of value it is approximately £1.28 billion.

The Ghanaian election in December 2024 allowed smuggling to worsen, slowing investment into the cocoa industry and again stalling payments to cocoa farmers (because of election-related payment delays from the state marketing board).

Cocoa is Ghana’s largest agricultural export and accounts for 15% of overall GDP for the economy. This smuggling crisis is contributing to the weak growth of the Ghanaian economy.

Smuggling in Ghana is not just limited to cocoa, there has also been an increase in the illegal smuggling of petrol and diesel.

Government Corruption

In 2010, an investigation revealed that political officials at all levels of Ghana’s government were implicated in cocoa smuggling. Nine government officials were seen colluding with cocoa smugglers, assisting with the illegally smuggling of cocoa to the Ivory Coast and Togo.

These officials would provide smugglers with falsified documentation to cross the border and avoid incurring additional charges at customs.

More recently, in September 2024, Ghana’s government through the Cocoa Board, created an anti-smuggling task force to combat this issue that is quickly growing out of control.

With the assistance of Ghana’s military, the task force intercepted 1400 bags of cocoa headed for the Ivory Coast and has arrested over 20 people in connection with smuggling.

Ghana’s President John Mahama stated during his election campaign that he wants to implement wider reforms the cocoa industry due to increased smuggling activity. He has since suggested new legislation that looks to criminalise the cutting down of cocoa crops to clear land for mining purposes.

How is this impacting Ghana’s community?

The majority of the profits generated from cocoa smuggling are enjoyed by the smugglers themselves. The farmers selling their beans only receive a small share of this profit, but this is still more than the price point set for them by the government; which continues to incentivise this illegal trade.

Additionally, this smuggling makes conditions for farmers that chose not to smuggle their beans more difficult as the government is more reluctant to invest in the cocoa industry, undermining farmers source of income and plunging them into debt.

Ordinary Ghanaians have suffered the most at the hands of cocoa smugglers. As profits made by illegal smuggling are not shared, this widens the gap between the elites and the poor in Ghana. Furthermore, the lack of revenue the Ghanaian government receives from cocoa exports is profit that is taken away from unprivileged Ghanaians. This is less money that can be reinvested into education, housing, healthcare and other public sector services that are critical to those communities living on or below the poverty line.

Smuggling undermines the Ghanaian government’s ability to reinvest and further develop the country and its citizens. As the smuggling crisis continues to weaken Ghana’s economy, it is the ordinary people who are being hit the hardest.