An African Success Story: Ghana's Cocoa Marketing System

Abstract

Ghana's cocoa marketing system has performed impressively over the past decade. Cocoa production has reached record high levels. Farmers receive a relatively large share of export earnings. Product quality is world renowned, and it regularly exceeds the most stringent international standards. Exports are handled professionally and efficiently. International loans are repaid reliably. Internal marketing is relatively uncorrupt and effective. This is a home-grown success story, under the stewardship of a state-run marketing board – the Cocobod – which manages almost all aspects of the internal cocoa marketing process and maintains a monopoly on cocoa exports. Given the dismal history of African commodity marketing boards in general, and of Ghana's cocoa marketing board in particular, this success demands explanation. It was not the result of radical transformation but of relatively subtle changes in the system that maintained the undoubted benefits of a centralised monopoly while minimising its damaging consequences. Success resulted from (1) building on the underlying strength of certain elements in the system, notably quality control and export management, (2) an episode of well-directed reform, and (3) effective policies and organisational structures that protected the farmers' share of the cocoa revenues over time and inhibited the Cocobod returned to the politicisation it suffered in the past. The case accords with the much-touted but oft-neglected lesson that both context and institutions matter for organisational performance. In particular, complementary contexts and institutions can produce valuable synergies. More substantively, it suggests that poorly performing organisations in Africa may be turned around without radical measures. To access a two-page summary of this paper, click this link