Being the second-largest producer of cocoa globally, Ghana is looking to earn more from its products by way of value addition. To achieve this, the country’s regulator for the industry has reached an agreement with China General Technology Holding (Genertec) to set up a cocoa processing factory.
The factory will be operated by the Ghana Cocoa Board (COCOBOD) and Genertec in a Public-Private Partnership (PPP). The construction will also involve the China International Development Operating Agency, with funding from the China Development Bank (CDB) and the Sino-African Fund.
According to the Chief Executive of COCOBOD, Joseph Aidoo, the project holds great potential to contribute significantly to the improvement of the Ghanaian economy, and particularly, for the local economy of the Sefwi-Wiawso area (where the plant will be located).
With the project comes the potential to grant Ghana access to the huge Chinese market of well over a billion people, Aidoo said in his address to the Chinese delegation led by the country’s Ambassador to Ghana, Shi Ting Wang.
More importantly, the project supports COCOBOD’s drive towards increasing local consumption, which fits into the agenda of the present government, that Ghana should increase its share of the $100 billion global cocoa industry through value addition to cocoa beans.
In January, the government unveiled plans to process more of its cocoa beans in the country. Ghana produced 880,000 tonnes of the beans in 2018 but achieved the capacity to process about 300,000 tonnes of that number locally – less than 50 percent of what it produces.
“It is a matter of taking a bigger part of the global value chain, worth over USD$100 billion annually,” Aidoo said. Through increased processing, Ghana can also protect itself from fluctuations of cocoa prices worldwide.
This is not the first partnership between Chinese-based establishments and COCOBOD, which only recently completed a $1.3 billion cocoa syndicated loan agreement to buy cocoa beans from local farmers during the 2019/2020 crop season.
Last year, Aidoo said that the board was seeking $1.5 billion from China’s Export and Import Bank (Eximbank) to improve its cocoa farms and fix irrigation systems as well as to fund other projects aimed at improving cocoa production.
But the establishment of the new cocoa processing plant commences a new model of corporation between Ghana and China, said Zhou Mingchun, Vice President of Genertec which has a foothold in the Ghanaian cocoa sector spanning some 15 years.
“We regard Ghana as the regional hub”, Mingchun added. “We believe that our portfolio in Ghana is not yet enough, so, basically we are looking forward to expanding our investment here in Ghana and that is why we are here today.”
Without giving a timeline or the expected processing capacity of the new factory, the COCOBOD chief executive said the project will commence “once the comprehensive feasibility studies are completed.”