About two-thirds of all Ghana cocoa are exported. The ups and downs of the Cedi, therefore, cause headaches for Cocobod and cocoa growers. To avoid these problems, some cocoa growers at Sampa decides to concentrate on domestic sales. Do these growers bear any exchange risk? Why and How?
About two-thirds of all Ghana cocoa are exported. The ups and downs of the Cedi, therefore, cause headaches for Cocobod and cocoa growers. To avoid these problems, some cocoa growers at Sampa decides to concentrate on domestic sales. Do these growers bear any exchange risk? Why and How?
Ghana's main source of foreign exchange is exports of raw cocoa beans. Ghana's cocoa sector is managed by Cocobod, the state owned marketing board. Cocobod gets cheap loans in US dollar via its marketing company. The country needs these US dollars to maintain its foreign reserve. Cocoa processing companies operate from Ghana Free Zones . Such companies are given incentives if they export minimum of 70% of their production and are also given tax exemption on imports of raw material and machinery. There is no incentive for companies involved in domestic sales, rather domestic companies are levied with hefty tax on such domestic sales.
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