Former Finance Minister and Member of Parliament for Karaga, Dr Mohammed Amin Adam, has criticised the government’s decision to cut the producer price of cocoa, arguing that a bailout for COCOBOD would have been a more appropriate response to the sector’s crisis.
Dr Amin Adam made the remarks at a press briefing shortly after the Finance Minister, Dr Cassiel Ato Forson, announced the new cocoa price. He described the move as misguided and accused the government of mismanaging one of Ghana’s most critical economic pillars.
Expressing concern over the role of the International Monetary Fund, he said he was “really surprised that the IMF has gone to sleep on this,” noting that the cocoa sector recovery strategy had been developed in consultation with the Fund as part of the requirements for implementing Ghana’s IMF programme. According to him, the current developments contradict earlier commitments made under that framework.
Dr Amin Adam argued that, given the scale of the challenges facing the cocoa sector, the government should have prioritised financial support for COCOBOD rather than passing the burden onto farmers. “Given the scale of the crisis in the sector now, one expected the government to give Cocoa Board a bailout, as we did during the NPP time, rather than reducing the producer price for cocoa,” he stated.
He repeated his position emphatically: “A bailout would have been necessary, rather than reducing the producer price for cocoa. A bailout would have been necessary, particularly at the time we are told that the economy is strong and resilient.”
The Karaga MP further questioned the government’s claims of prudent economic management. “An economy that is better managed cannot pay cocoa farmers. An economy that is better managed reduces the producer price of cocoa,” he remarked, suggesting that the price cut undermines assertions that the economy is on a stable footing.
Dr Amin Adam also criticised what he described as the “reckless overvaluation” of the Ghanaian currency, warning that excessive foreign exchange interventions could hurt export competitiveness. “We warned this government about the reckless overvaluation of our currency,” he said, alleging that about $10 billion was injected into the economy last year alone to prop up the cedi.
He cautioned that artificially strengthening the currency could have unintended consequences. “When you overvalue your currency, it adversely affects the export competitiveness of your country,” he explained, adding that economic policymaking always involves trade-offs.
According to him, responsible governance requires what he termed “policy equilibrium”, a careful balancing of competing interests to prevent one sector from suffering at the expense of another. “Anytime you are implementing a policy, there are trade-offs… by overvaluing the currency as a policy, they should know that other sectors will suffer,” he said.