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0 The Member of Parliament for Karaga, Dr Mohammed Amin Adam, has criticised the government’s newly announced reforms in the cocoa sector, accusing Finance Minister Dr Cassiel Ato Forson of using the opportunity to “short-change cocoa farmers”.
Speaking at a press briefing after the finance minister outlined plans to restructure the cocoa sector, Dr Amin Adam said he and his colleagues had expected a comprehensive reform plan.
“We were told that the Minister for Finance was coming to announce what they call a restructuring of the cocoa sector. We are very surprised that the minister rather used the opportunity to shortchange cocoa farmers,” he said.
Dr Amin Adam, who previously served as finance minister under the New Patriotic Party (NPP) administration, said his government had already developed a turnaround strategy for COCOBOD in consultation with the International Monetary Fund (IMF).
“Before we left government, we introduced a turnaround strategy for COCOBOD and we worked on this with the IMF. This strategy was intended to comprehensively restructure COCOBOD,” he stated.
“What is happening today in the cocoa sector is not surprising to us because this government has failed to implement the COCOBOD turnaround strategy. That is why COCOBOD is facing these challenges,” he argued.
Dr Amin Adam noted that some of the measures recently announced by the finance minister were already contained in the earlier strategy.
“I heard that the minister is directing the move of the cost of cocoa roads to the Ministry of Roads. This measure was in the strategy, the turnaround strategy that we handed over to them. It took them one year. They have not implemented it,” he said.
He added that the previous strategy also proposed a transparent pricing policy and cancellation of certain cost items.
“They were also supposed to legislate a transparent pricing policy for cocoa. They have not done that. They were to remove some cost items which tend to reduce the producer price of cocoa, which we thought were unnecessary and, in some cases, duplicative. They have not done that,” he stated.
He further accused the government of failing to ensure that COCOBOD focused on its core mandate.
“They were supposed to get COCOBOD to move away from non-core businesses and to improve efficiency and reduce cost, particularly in procurement. They have not done that,” he said.
Dr Amin Adam insisted that there was no need for a new restructuring plan if the earlier strategy had been properly implemented.
“As far as we are concerned, this NDC government did not need to announce any new strategy for restructuring COCOBOD. If they had implemented the strategy that we handed over to them, COCOBOD would not be in this mess,” he said.
He also expressed surprise at what he described as the IMF’s silence on the matter.
“We developed this strategy in consultation with the IMF as one of the requirements for implementing the IMF programme. I’m really surprised that the IMF has gone to sleep on this,” he said, adding that “this government is recklessly managing the cocoa sector, which has brought us to this unprecedented crisis.”
On the issue of producer prices, Dr Amin Adam argued that instead of reducing the price paid to farmers, the government should have provided financial support to COCOBOD.
“Given the scale of the crisis in the sector now, one expected the government to give COCOBOD a bailout as we did during the MPP time rather than reducing the producer price for cocoa. A bailout would have been necessary,” he said.
He questioned the government’s claims of strong economic management. “They said they are better managers of the economy. An economy that is better managed cannot pay cocoa farmers? An economy that is better managed reduces the producer price of cocoa?” he asked.
Dr Amin Adam also blamed what he described as the “reckless overvaluation” of the Ghana cedi for weakening the competitiveness of Ghana’s cocoa on the global market.
“We warned this government about the reckless overvaluation of our currency,” he said. “When you overvalue your currency, it adversely affects the export competitiveness of your country.”
He argued that the appreciation of the cedi had made Ghana’s cocoa more expensive internationally, leading to a drop in demand.
“Ghana’s cocoa is now considered more expensive. This has been confirmed by the CEO of COCOBOD. He has confirmed in an interview that Ghana’s cocoa is now more expensive and therefore consumers are turning away from Ghana’s cocoa,” he stated.
Dr Amin Adam explained that when inflation stands at 3.8 per cent, economic theory suggests that the currency should depreciate by at least the same margin to protect exports.
“When your inflation is 3.8 per cent, your currency should depreciate by at least 3.8 per cent in order to protect exports. What do we see? They are going around bragging about appreciation. That is poor economics,” he said.
He said that the cocoa sector crisis had exposed weaknesses in the government’s economic management.
“The cocoa sector has just exposed them. This government is recklessly undermining all these efforts, and it won’t be long before Ghanaians see the reality of this government,” he said.
